Photo credit: Honda
It’s been a rough year for Ford Motor Company (NYSE:F)’s drive to go green. Despite investing heavily to deliver its next generation of fuel efficient cars, Ford keeps coming up short. The company’s progress was slowed when it was found that its C-Max hybrid failed to deliver on its promised fuel economy. Now, one of its chief rivals, Honda Motor Co Ltd (ADR) (NYSE:HMC), has taken advantage of Ford’s misstep and has zoomed past it in the battle to build the most fuel efficient car.
Honda Motor Co Ltd (ADR) (NYSE:HMC)’s latest addition to the fuel economy wars, the 2014 Accord Hybrid, delivered an EPA-certified rating of 50 mpg in city driving. That’s three miles per gallon better than Ford Motor Company (NYSE:F)’s Fusion Hybrid, which had been the top of the midsized sedan segment. It’s also well ahead of Toyota Motor Corporation (ADR) (NYSE:TM)’s Camry Hybrid which came in at 43 mpg in city driving.
To be fair, the Accord Hybrid’s highway rating is 45 mpg, which drops its combined rating down to 47 mpg. That actually ties it with the Fusion Hybrid, which also has a 47 mpg combined rating. However, in a day where headline numbers matter, Honda Motor Co Ltd (ADR) (NYSE:HMC) can boast of beating Ford Motor Company (NYSE:F) on that all important city driving number. That being said, the Accord Hybrid is also still a bit behind Toyota Motor Corporation (ADR) (NYSE:TM)’s popular Prius hatchback, which still leads all hybrids with an EPA-certified 51 mpg city rating. However, for those looking for a gas sipping mid-sized sedan, the Accord Hybrid is now the car to beat.
Despite hitting fifty, car makers still have a long way to go in order to meet the government’s aggressive future CAFÉ standards. That standard is set to nearly double by 2025 to a fleet average of 54.5 mpg. As Ford Motor Company (NYSE:F)’s recent struggles with the C-Max indicates, manufactures don’t have an easy road ahead to meet those future standards.
That’s forcing manufacturers to take risks in order to deliver the next generation of gas sipping automobiles. In Honda Motor Co Ltd (ADR) (NYSE:HMC)’s case, it went away from the industry standard of nickel-metal hydride batteries and instead is using lighter and more powerful lithium ion chemistry. It is a move that does have the potential to backfire down the road given The Boeing Company (NYSE:BA)’s issues with lithium-ion batteries on its 787 Dreamliner. On the other hand, Tesla Motors Inc (NASDAQ:TSLA) uses automotive-grade, Lithium-ion battery technology in its all-electric Model S and has yet to experience any issues with that technology.
Right now Honda Motor Co Ltd (ADR) (NYSE:HMC)’s bet on the battery, as well as improvements to the aerodynamics and a more efficient wheel design have taken its Accord Hybrid to the next level. That leaves Ford Motor Company (NYSE:F) with a little bit of catching up to do in order to improve its fleet’s fuel economy. That being said, this past August Ford did have its best auto sales month since 2006 with sales of its C-Max hybrid contributing to 44% of its growth in the small car category. So, while the car disappointed on miles per gallon, it hasn’t disappointed in sales, which is where it really matters. So, while Honda might have won this lap, Ford is still well positioned to win.
The article Honda Succeeds Where Ford Failed originally appeared on Fool.com and is written by Matt DiLallo.
Matt DiLallo has the following options: long January 2014 $10 calls on Ford and short January 2014 $10 puts on Ford. The Motley Fool recommends Ford and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors.
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