As the rap song goes, "Mo' Money, Mo' Problems." As gas prices continue to rise, nothing could be closer to the truth for owners of premium vehicles. After all, the cost of the most expensive premium-grade fuel required by most luxury cars is going up just as drastically as basic fuels.
In the luxury auto market, the deck is stacked against fuel efficiency. As mass-market vehicles have made gains in initial quality, safety, and interior amenities, luxury marques have pushed the performance envelope. But giving vehicles more oomph underhood often compromises fuel consumption. It's no coincidence that the most popular gas-electric hybrids have debuted at the lower ends of the price and power spectrum.
That hasn't stopped Toyota (TM) from trying to capitalize on the success of its lower-cost hybrids with its luxury division, Lexus. In April of last year, with much fanfare, Lexus introduced a gas-electric hybrid version of its RX SUV.
For a $7,000 premium, it improves fuel economy by just over 26% to a combined average of 30.5 miles per gallon over the conventional version (see BusinessWeek.com, 3/8/06, "Hybrid Heaven in a Lexus"). On the success of the RX, this year the company is showing the first mass-market hybrid to break the $50,000 price barrier, a performance-oriented GS 450h sedan.
An industry triumvirate is also trying to make luxe fuel-economy gains by working across company lines. BMW, DaimlerChrysler (DCX) and General Motors (GM) have pooled about 500 engineers in a Michigan facility to develop a next-generation hybrid power train.
The system is bound, in part, for the luxury brands owned by the companies, including BMW, Mercedes-Benz, and Cadillac. Earlier this month news broke that it would likely cost $1 billion in development costs to begin giving those brands a greener tinge.
But old favorites die hard. Mercedes-Benz offers one of the most fuel-efficient models on the U.S. market, and it hasn't an ounce of expense-adding hybrid technology underhood. Instead, its E320 CDI version of the company's staple midsize sedan features an ultra-efficient diesel engine that gets up to 37 miles per gallon (see BusinessWeek.com, 6/29/06, "Distinguished Diesel").
The catch? Because American diesel fuel is, for the time being, dirtier than European grades, the E320, as well as highly fuel-efficient models from Volkswagen, can't be sold in five key states, including New York and California. The landscape for American diesel could improve, as fuel standards are set to get tougher this fall. But manufacturers have to be willing to provide the engines (see BusinessWeek.com, 2/20/06, "Diesel Gets Cleaner and Greener").
Until high-end hybrids become more common or mass-market diesel gets on its feet, there are a host of luxury models offering at least respectable fuel economy. Some even manage to impress.
BusinessWeek.com took a look at the most fuel-efficient luxury models, using the government's fuel economy database to find which 2006 models do best at the pump rather than at the track.
The major caveat is, of course, that powertrain and performance upgrades can often degrade overall fuel efficiency. Fast, aggressive driving doesn't help either. And for many luxury consumers, the appeal is all about the power and the speed.
To see the most fuel-efficient luxury cars,