Which fuel-efficient vehicle is right for you? That depends on how and where you drive. By Jessica L. Anderson, Associate Editor August 23, 2010 Not long ago, carmakers were touting hydrogen as the silver bullet for energy independence and environmental redemption. But massive roadblocks to building the hydrogen highway forced automakers to follow detours to other green technologies. Just as no single solution will make manufacturers' fleets green, no single environmentally friendly car will work for everyone. Clean diesels are great for long-distance highway driving, but if you have a long commute in bumper-to-bumper traffic, hybrids get the nod. Electric cars (such as the Nissan Leaf, debuting in December) boast zero-emissions driving; but if you plan to travel more than 100 miles in a single stretch, you may end up stranded with a dead battery. Meanwhile, carmakers are tweaking gasoline engines to achieve better and better fuel economy.This kind of decision-making isn't new to Americans, notes John Voelcker, editor of the Green Car Reports. "We're the home of multicar households," says Voelcker. "We have bought different types of cars based on different uses for years. People will start to do that with powertrains -- they'll pick among the green cars based on what they're doing." In addition to how you'll use your car, there's a financial angle. Cost is the biggest constraint for buyers considering a green car. For 2010, the premium over a comparable gas-engine car ranges from $690 to $34,350 for hybrids, and from $1,500 to $4,525 for diesels. Over five years, you'll recoup a portion of the premium with savings at the pump. Tax incentives also help ease the sting of a higher price, but credits begin to phase out after an automaker sells 60,000 green vehicles. (Tax credits are no longer available for Ford, Honda, Lexus, Mercury and Toyota hybrids, and as of July, buyers of Audi and Volkswagen diesels are eligible for half of the tax credit.) To compare the cost of a hybrid or diesel with its gas-engine counterpart (or with each other), use our calculator. New government mandates are pushing automakers further on fuel economy. The rules will require all the noncommercial vehicles they sell to average 34.1 miles per gallon by 2016. Cars will have to average 37.8 mpg, and light trucks and SUVs 28.8 mpg, versus 27.5 mpg and 23.5 mpg currently. As automakers scramble to meet the stricter standards, they'll pass much of the extra cost to you. According to the National Research Council, the latest fuel-economy measures will raise the average retail cost of midsize and large cars by $2,220 for gas-engine vehicles. Each vehicle's footprint (the area contained by its wheels) will determine its fuel-economy requirement, so U.S. highways won't be flooded with econoboxes. Advertisement Hybrids: Best for gridlock Hybrids have come a long way since Honda introduced the original, two-seat Insight to the U.S. in 1999. Hybrids started out as rolling science projects that appealed solely to committed environmentalists and early adopters. "They were fighting against the tide of the SUV phenomenon, when cupholders were considered more important than fuel efficiency," says Bradley Berman, editor of HybridCars.com. Like automotive jewelry, early hybrids were worn proudly by their owners, who smugly breezed past the gas station. After a decade of advances in batteries, hybrids are no longer considered experimental -- although their fuel efficiency is still a badge of honor for owners. They are available in every size and vehicle type and, because they use a gasoline engine as well as an electric motor, you can take them on long road trips and not worry about running out of fuel. But the best use of the technology is city driving: Hybrids capture energy when braking, which recharges the battery and allows you to use more electricity, less gas. For the 2010 model year, 23 hybrids are available. For 2011, six new hybrids join the lineup. Honda's CR-Z will now be the smallest model, at 161 inches long -- 15 inches shorter than the Toyota Prius. This baby 'brid has seating for only two (much like the original Insight hybrid) and aims for performance, not all-out mileage numbers. Three driving modes -- Econ, Normal and Sport -- maximize fuel efficiency or performance, as you wish. And it's the first hybrid to come with a six-speed manual (and an optional automatic). Powerwise, it's about on par with Honda's gas-engine Civic, but it gets 31 mpg in the city and 37 on the highway with the manual (35 city/39 highway with the automatic). Pricing starts at $19,950 and tops out at $23,960. Among midsize sedans, the new Hyundai Sonata hybrid's unique front end helps distinguish it from the gas-engine Sonata, and it will be among the first hybrids to use a lithium-ion battery -- the same technology used in cell phones and laptops -- instead of the standard nickel-metal hydride battery. Lincoln is also introducing a hybrid version of its MKZ. (Pricing for both has yet to be announced.) Advertisement To compete with the Mercedes-Benz S400 luxury hybrid, BMW adds the ActiveHybrid to its top-of-the-line 7 series. Its V8 engine and electric motor combine to deliver 455 horsepower. It rockets from zero to 60 miles per hour in 4.7 seconds -- while getting about 15% better fuel economy than the conventional 750i. Like the S400, this haute hybrid is barely distinguishable from the gas-engine model, whether you're standing in the driveway or sitting behind the wheel. Starting price: $103,175. In the crossover market, the Volkswagen Touareg Hybrid (pricing not yet announced) and Porsche's Cayenne S Hybrid ($68,675) bring more utility to the hybrid stable. They join last year's late arrival, the Mercedes ML450H ($55,875), and are among the first German hybrids on U.S. soil. The price premium. When Kiplinger's compared five-year ownership costs of green vehicles with conventional gas-engine vehicles (see The Price of Saving Fuel), only three hybrids had a cost advantage over their gas-engine counterparts: the Mercedes S400, the Lexus HS 250h (compared with the IS 250) and the Honda Insight (compared with Honda's Fit). In general, the more expensive a hybrid, the less likely it will save money over its conventional sibling because savings at the pump won't offset the premium (with gas at about $3 a gallon). Fewer than half of the 2010 hybrids still have federal tax incentives on the hood. Credits are still available on hybrids from BMW, General Motors, Mercedes-Benz and Nissan, ranging from $900 (for the BMW ActiveHybrid 750i) to $2,350 (for the Nissan Altima Hybrid). Diesels: Torqued up As Japanese and U.S. carmakers bet on hybrids, European carmakers put their marketing muscle behind diesel vehicles. No longer the smoky noisemakers you may remember from the 1970s and '80s, a new wave of diesels -- every bit as clean as gasoline engines, but with 30% better fuel economy and 20% fewer greenhouse-gas emissions -- was introduced a couple of years ago. New clean-air standards that took effect in 2007 forced automakers to reduce particulates, or soot, and nitrous oxides, which contribute to smog. Because the new crop of diesels meet California's strict emissions standards, they can be sold in all 50 states. Advertisement If you like the idea of getting better mileage but don't want to sacrifice power, diesel is for you. These engines have plenty of torque, and that's the number you should pay attention to if you're looking for good acceleration. You will have to get used to pumping diesel at the gas station, but more than 40% of stations now sell diesel fuel. Among the 2010 models, 11 diesels were available, two of them new: The redesigned Volkswagen Golf TDI (turbocharged direct injection) hatchback, starting at $22,905, shares the 2.0-liter turbocharged engine that powers the Jetta TDI sedan and wagon. Audi's A3 got a diesel option as well, and it features precise handling, stop-on-a-dime braking and luxury appointments. The A3 TDI ($30,775) has the same engine as the Golf; both deliver up to 42 mpg on the highway. On tap for 2011: a redesigned Volkswagen Jetta TDI. It will be longer, giving passengers more rear legroom, but it will keep the 2.0-liter diesel engine. Available in October, the Jetta TDI's pricing hasn't been announced yet, but expect it to start around $21,000. The price premium. The markup for diesels is less than it is for hybrids. When we looked at projected five-year ownership costs, all but one 2010 model (the Volkswagen Golf) beat its gas-engine sibling. All the 2010 diesels qualify for tax credits, ranging from $575 for the Audi Q7 TDI and VW Touareg TDI to $1,800 for the BMW X5 35d and Mercedes GL350 BlueTec. Advertisement Electric: Unplug and go The Nissan Leaf won't be sold until December, but it is already making a splash as the first pure-electric vehicle for the mass market -- preorders in Japan and the U.S. are nearly double the first year's production capacity. The long-awaited Chevrolet Volt, an electric car with a range-extending gas engine, is due out later this year. You'll have to wait a couple more years for plug-in hybrids. Electric cars have been around since the 1890s, when Thomas Edison and a bunch of other inventors thought they'd hit on the key to mass locomotion. But because batteries that could extend a vehicle's range were large and heavy, electrics never hit it big. Now, the lithium-ion battery is changing the equation. The purest electric vehicles (EVs) run solely off the battery -- you plug them in, charge them up and then drive as long as the charge lasts. They're quiet, cheap to operate and produce no tailpipe emissions, although power plants that generate electricity do require energy and create pollution. But most EVs will have limited range, so they're best for short trips. Unless you have a second car or can rely on public transportation, EVs may not be for you; the box at right lists potential pitfalls. Since the demise of GM's ill-fated EV1, the highest-profile electric vehicle sold in the U.S. has been the Tesla Roadster. Introduced for 2008, this sports car hits 60 mph in 3.9 seconds, tops out at 125 miles per hour and goes 245 miles before it needs recharging. At $109,000, it's not for families on a budget, so Tesla has developed the slightly more mainstream Model S sedan, which will be delivered in 2012. The Model S has a 300-mile range, seats five adults plus two kids (in rear-facing seats) and still offers a sporty zero-to-60 time of 5.6 seconds. The cost: a more palatable $57,400. But the real news in electric cars is Nissan's Leaf. The little hatchback hits the road with a 100-mile range, top speed of 90 mph and starting price tag of $32,780. That price includes a navigation system that helps you locate charging stations. A remote-connection system will let you monitor your charging status or initiate charging, as well as turn on the temperature controls to preheat or cool the car -- all via a laptop or smart phone. Charging time: eight hours on a 240-volt charger. More EVs are on the way: Ford's electric Focus and Mitsubishi's iMiEV hatchback are expected next year. EVs from Toyota, BMW and Smart are on the horizon for 2012 or 2013. The heavily marketed Chevrolet Volt is an EV with a twist: a small gas engine on board that acts as a range extender. On a single charge, the Volt can travel 40 miles. For longer trips, the gas engine kicks in to power the electric motor -- for a total range of 300 miles. The Volt will offer cool tech features, such as an OnStar Mobile application, which allows you to start the car, lock and unlock doors, and control charging. You can fully recharge the battery in three hours. Prices have yet to be announced, but the Volt is expected to cost about $40,000. Plug-in hybrids aren't due until 2012. These vehicles operate much like regular hybrids, but you plug them in to recharge the battery. Depending on the vehicle, you can go between 13 and 50 miles using only battery power. Once the battery is depleted, the car goes into normal hybrid mode (relying more heavily on the gas engine). Toyota and Ford are planning to sell plug-in hybrids for 2012 but are tight-lipped as to whether the production models will be the Prius Plug-in and Escape Plug-in, which are in testing now. Automotive start-up Fisker has been working on a four-door sports sedan called the Karma for a few years. The Karma will go on sale in 2011 for about $90,000. The price premium. The first EVs and plug-ins will be expensive because they have new technology and will be produced in low volume. You may also need a home charging station. But a $7,500 tax credit that applies to EVs with a 16-kWh battery or larger (the Volt, Leaf and Tesla Roadster qualify) will help ease sticker shock. Some states also offer incentives -- for example, California rebates up to $5,000 to EV and plug-in hybrid buyers. For more information on all types of plug-in vehicles and state-by-state information on rebates and tax credits, go to www.plugincars.com.