Don’t Buy a Car Until 2017

What if you could drive from Seattle to San Francisco on just four gallons of gas?

Or cross the country from San Francisco to New York without ever having to stop for fuel, a trip of nearly 3,000 miles on a 10- or 12-gallon tank?

We’re at a tipping point between high-efficiency gasoline autos, all-electric autos and fuel cell electric autos.

European auto manufacturers are on the verge of a breakthrough that gives us cars reaching 200-300 miles per gallon, and the cars aren’t the size of motorcycles or midget Japanese city cars.

It won’t be too long before you see cars like these on the highway getting well over 100 mpg, if not 200 mpg or 300 mpg.

In fact, those autos already exist, though they’re mostly prototypes at the moment.

But hybrids — part gasoline and part electric — are an interim technology.

The real revolution that’s coming in cars is about two years away.

The Problem With Fuel-Efficient Autos

If you’ve been in the market for a truly fuel-efficient automobile recently, you’ve noticed a few Catch-22s.

You can find cars like VW’s Passat TDI diesel that gets well over 50 mpg on

the highway (full disclosure: I have one, and it’s easy to get 53 mpg on the interstate) or a Honda Insight hybrid or Toyota Camry Hybrid that gets well over 40 mpg.

In fact, high-mileage hybrids and diesels are so common they’re becoming

the norm. But you’ll pay far more for them compared with conventional models, so the real savings in the end aren’t that great.

For example, if fuel were to cost $3.50 a gallon for the next few years, you’d have to drive a Hyundai Sonata Hybrid or Honda Civic Hybrid nearly 150,000 miles before they’d be worth the high price of a hybrid car.

And diesel fuel remains at least 20% higher than regular gasoline, so diesel cars start with a handicap. Catch-22.

Sure, you can drive a Tesla for free (their supercharging stations are free, or you can charge up at the free stations at shopping malls). But a new Tesla Model S is the price of two Toyota hybrids. Catch-22.

Renault

Renault’s spiffy, roomy and fast Eolab. Tests show it can exceed 200 mpg.

Renault and Peugeot recently introduced two vehicles that get well over 100 mpg, still have lots of zip and are family-sized. The Renault is a true breakthrough vehicle, completely re-engineered from the ground up to be light but stiff. It has low fuel consumption but plenty of pickup.

Let me rephrase the fuel consumption part — it’s staggering. The Eolab, as Renault has dubbed the new hybrid demo, gets an honest 235 mpg. So with 10 gallons in the tank, you could drive one from Portland, Maine, to Miami and still have enough gas to get to New Orleans, 850 miles away.

You Can’t Buy the Renault

OK, OK, I know — you can’t buy a Renault or a Peugeot in the United States anymore. But Renault and Nissan have a cross-ownership structure that gives Renault a 43% voting stake in Nissan. The two companies try to act in the best interest of each other worldwide, and have done so since 1999. Bottom line: Renault technology ends up in Nissan cars and vice versa.

Because Nissan and Renault have sold more plug-in electric vehicles than any other manufacturers, including the Nissan Leaf that is the second best-selling electric car in the United States, you are likely to see that 200-plus mpg vehicle from Nissan before long.

And it has competition.

Volkswagen recently introduced the XL1, a sleek sporty turbo diesel car that gets a whopping 300 mpg. They’ve only made 250 of them so far, but watch out. VW could once again regain the leadership status it once had worldwide for selling the highest-gas-mileage cars.

But now is not the time to buy any of these cars.

The real revolution that’s coming in cars is about two years away.

Companies like Ford and Tesla are doing work with fuel cells and battery plants we couldn’t have dreamed of a few years back.

If you need a new car now, do a two-year lease on a Chevy Volt.

The Chevy Volt gets about 40 miles as an all-electric. It’s not a hybrid: It’s a generator-electric you can drive coast to coast without stopping to recharge.

Of all the choices on the road now, it’s the most practical combination of commuter electric and long-distance.

Regards,

Stephen Petranek
for The Daily Reckoning