Money Matters - Simplified

With 118 mpg, Honda electric car intimidates competitors

Though promising a great mileage, the new Fit will cost twice as much as gas-powered version. At 118 miles per gallon, the 2013 Honda Fit electric vehicle is the most fuel-efficient in the United States.

The car goes on the market this summer in Oregon and California. Honda announced the whopping figure Wednesday, making the small, four-door hatchback more efficient than electric rivals like the Ford Focus, Nissan Leaf, and Mitsubishi i-MiEV. At first, Honda will only be leasing Fit EVs in Oregon and California, for $389 per month. The subcompact seats up to five people and can be recharged in three hours with a 240-volt charging station. A fully charged Fit EV can go 82 miles, meaning a daily commute could cost nothing for gasoline.

The electric Fit has been approximately priced nearly twice as high as its gasoline-powered version.
The sales of electrics has been dipping owing to the fact that the gas prices are falling. The high sticker price for electric vehicles is becoming more of a barrier for American buyers, even though the vehicles are far more efficient than their gas-powered counterparts.

Through May, car-makers sold just over 10,000 electric vehicles, less than 0.2 percent of US car and truck sales. That’s because the numbers don’t add up for the average consumer. The electric Fit needs 28.6 kilowatt hours of electricity to go 100 miles. At the national average price of 11.6 cents per kilowatt hour, that costs $3.30.

A gas-powered automatic-transmission Fit, which gets 31 miles per gallon, needs to burn 3.2 gallons to travel 100 miles. At the national average price of $3.57 per gallon of gasoline, that’s $11.52.People drive an average of almost 13,500 miles a year, so a typical driver would spend $445 on electricity for an electric Fit over a year, and $1,552 on gasoline for a regular Fit.

Honda has put the price of the electric Fit at $29,125 after a $7,500 federal tax credit. That’s $12,210 more than the gas-powered Fit; a savings of $1,107 per year to make up the difference between the electric and the gas-powered version.

“Customers don’t want to spend the extra money up front and wait for years for payback”, said Geoff Pohanka, who runs 13 auto dealerships in Virginia and Maryland, including three that sell the Nissan Leaf and Chevrolet Volt electric cars.

"People are smart. They’re looking for the deal," he said. "Is somebody going to fork out $15,000 more for something that gets them less range than their car now? It’s not happening."

Car-makers can lower rates and subsidize deals in order to make a car, especially one with new, expensive technology more attractive to buyers. Consumers also has the option for taking the car on lease.