Will Honda's $340 Million Investment in Better Fuel Economy Pay Off?

Jan 14, 2015 03:30 PM EST | Jordan Ecarma

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Honda plans to invest $340 million in its Anna, Ohio, plant to produce new turbocharged, four-cylinder gasoline engines with improved fuel economy.

As the company gears up for a green vehicle push, Honda will launch VTEC engines later this year that have variable air and fuel valves intended to boost efficiency.

Honda has plans to unveil its next hydrogen fuel-cell vehicle next year, while a plug-in hybrid and a pure electric offering are expected by 2018. The hybrid system used in the Acura NSX, which generates more than 550 horsepower combined from a V-6 and three electric motors, will also make its way to other production vehicles.

The Japanese automaker showcased its FCV Concept at the auto show in Detroit this week, touting its targeted battery range of more than 300 miles and fueling time of less than five minutes.

The auto industry as a whole is working to develop vehicles with better fuel economy and reduced emissions as government regulations tighten in these areas.

Carmakers may have difficulty selling electric vehicles this year if gas prices continue to fall. The national average cost for a gallon of regular gasoline was $2.10 today, according to the AAA's Daily Fuel Gauge Report.

That price is expected to drop even further to less than $2 per gallon, a figure that hasn't been seen since early 2009, USA TODAY reported.

The average vehicle sold in December 2014 got 25.1 miles per gallon, a minimal increase from the previous year's 24.9 mpg that reflected the smallest fuel economy gain since August 2011, according to the Wall Street Journal.

Bottom line, consumers are drawn by improved fuel economy whether gas prices are reasonable or not, so success likely depends on whether or not Honda and other companies make their reduced-emission offerings affordable for the everyday buyer. 

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