The 2014 Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267) Accord Plug-in Hybrid shows how much progress has been made with electrification, rated as 115 MPGe (miles per gallon equivalent) for short trips and 46 MPGe for longer trips that also use gas, according to the US Department of Energy’s fuel economy website. But the slightly odd MPGe measure doesn’t tell drivers what they really want to know, which is that many of them will almost never have to refill the tank if they buy the new Honda Accord Plug-in hybrid.
Honda Accord Plug-in Hybrid saves drivers $7,000 over five years
Since miles per gallon is familiar, the DOJ continues to use a similar measure when ranking electric vehicles and hybrids (the Tesla Motors Inc (NASDAQ:TSLA) Model S is rated at 95 MPGe) by treating one gallon of gas as 33.7kWh of energy, regardless of the source. From a pure engineering perspective this does tell you how efficiently the car converts potential energy, but drivers want to know how much they will have to spend on fuel (or electricity), how often they’ll have to wait in line at the gas station, and maybe that their new car is better for the environment.
In the case of the Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267) Accord Plug-in Hybrid, drivers can go 13 miles on a full charge without using any gasoline and even after that the engine and brakes recharge the battery so that it still improves fuel efficiency. The DOE estimates that drivers will save $7,000 over five years assuming 45% highway driving and 55% city driving, clocking 15,000 miles per year.
MPGe doesn’t tell drivers what they want to know
Even with the $7000 in savings, the Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267) Accord Plug-in Hybrid costs about $40,000, so people on a budget will have plenty of more affordable options. But as fuel efficiency standards become stricter and battery technology improves, electrification will become a lot more common. Miles per gallon was always a rough estimate that changed based on everything from the weather outside to the amount of air in your tires, but at least it had the benefit of being intuitive. When the latest hybrid is judged to be more fuel efficient than all-electric cars, the conversation has split.
The DOE also estimates that the annual fuel cost for the new Honda Motor Co Ltd (ADR) (NYSE:HMC) (TYO:7267) is about $950, versus $650 for a Tesla Motors Inc (NASDAQ:TSLA) Model S with the same driving patterns, even though the Honda has the better MPGe.