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Why Honda is building hybrids that you won’t buy Add to ...

The briefing room inside Honda Canada’s new “green” head office in Markham, Ont., is toasty warm; the thermostat is set high to save energy. Appropriately enough, the presentation before me is all about a new “green” car, the 2014 Honda Accord Hybrid. But unlike the compromises in comfort required to work in a green building – I’d never be able to stay awake all day here – Honda insists that the Accord Hybrid is a compromise-free sedan.

Except you will need to make some changes to your driving patterns: fewer stops at the gas station. Honda says the posted fuel economy of 3.7 city/4.0 highway/3.8 combined litres/100 km is “the lowest Natural Resources Canada fuel economy rating of any four-door intermediate sedan in Canada. Moreover, those numbers are in a tie for the number one combined fuel economy in the intermediate segment, including five-door hybrids.” All that for an Accord Hybrid starting at $29,950.

I am being kept alert this particular morning by a mental exercise. I am cataloguing how a 2014 Honda Accord Hybrid sedan differs from its purely gasoline counterpart. In a nutshell: swap out the traditional automatic transmission and replace it with two electric motors and a lithium ion battery pack behind the back seat. Add in a clever regenerative braking system and gauges to read out hybrid activity in the power train and – voila, the Accord Hybrid.

This is an elegant and cost-effective approach to hybridizing an automobile that is otherwise almost identical to a traditional one – the Accord that uses a single gas motor, four-cylinder or V-6. Elegant? Honda is a company that prides itself on powertrain engineering and justifiably so. Cost-effective? Anyone who has ever worked at Honda will tell you that the culture of the place embeds every “associate” with an appreciation for what non-Honda people might refer to as penny-pinching. Honda would never be so crass. Intelligently frugal might be a more apt term in Markham.

Now you might ask why a penny-pinching company with an engineering pedigree would expend precious resources on turning a fuel-efficient Honda Accord into an even thriftier and cleaner hybrid. That would be a good question. To many rational people, this might not make much sense.

After all, the 185-horsepower, four-cylinder Accord sedan lists for $23,990 and gets respectable fuel economy (8.7 litres/100 km city, 5.7 highway). You’d need to drive an Accord Hybrid for six, seven years, perhaps even a decade to recoup the $6,000 price premium over the base Accord four-banger.

And it’s not as though we’re seeing an explosion in hybrid sales. Demand is not forcing supply. Honda officials, using Polk data, predict Canadians will buy just north of 18,000 hybrids in 2013 – that in a market predicted to top 1.7 million in sales this year. Hybrid sales are a speck on the new-vehicle sales landscape.

Moreover, Honda’s smartly engineered Accord Hybrid will be competing in a hybrid market crowded with at least 15 other hybrids, some less expensive (2013 Toyota Camry Hybrid at $27,100) and some not just cheaper, but far more well-established (2013 Toyota Prius at $26,100). If all the stars align, Honda can only hope to sell between 1,000 to 2,000 Accord Hybrids, versus 15,000-20,000 gasoline-only Accords. There is no obvious business case here.

Yes, there will be some buyers and they’ll be socially conscious types who consider a super-green Accord not just a responsible purchase, but a premium one. While most consumers still equate performance with leather seats, state-of-the-art infotainment, horsepower and 0-100 km/h times, a small but growing smattering of financially well-armed car buyers will see the Accord Hybrid as a premium purchase worth the investment in saving the planet.

But even if that marketplace analysis is off-base and the global warming deniers are actually correct, Honda and all the other global, full-line car companies must keep expanding their electrified or zero emission offerings. Government regulators insist.

The government at the forefront of all this is California’s. Yes, what happens for the car business in California affects the industry in the rest of the United States and Canada. California’s new-vehicle market is the largest in the United States and bigger than Canada’s, in fact. That’s the reality.

And the reality in California is that this one state has the authority to set its own vehicle pollution rules and they’re tougher than U.S. federal standards. In California, auto makers must sell electric or other non-polluting vehicles in proportion to their market share in the state. Companies that fail to do so must pay a de facto fine by purchasing credits from companies with excess zero-emission credits.

On top of that, Honda is a Japanese car company and Japan is tougher on the auto industry than even California. True, Honda is a larger market force in North American than in Japan, but even at that, the company cannot ignore the home market.

So, is your head ready to explode? Well, I am not surprised. But all of this explains the why and wherefore of the Honda Accord Hybrid – one of the most technologically advanced cars Honda has ever produced and one only a handful of buyers will ever own. Just thinking through this tale kept me awake at Honda headquarters and will likely do so through the night, too.


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