Cheap Gas Puts the Squeeze on Hybrids and EVs

Electric cars suffer when it’s easy to fill the tank

Earlier this year, Fiat Chrysler boss Sergio Marchionne joked that he hoped consumers wouldn’t buy the Fiat 500e (e for electric), because the company loses $14,000 on each one, given the cost of the technology inside. That shows the bind carmakers find themselves in these days: Americans have been buying more green cars of all types, but as gas prices plummet, companies have resorted to steep discounts to keep sales from stalling.

Automakers sold about 90,000 hybrid electrics, plug-in hybrid electrics and battery-powered electrics through September, a 30% increase over 2013 in what will likely be a record year. Sales of plug-ins–which can be recharged overnight–are up nearly 85%, according to the Electric Drive Transportation Association (EDTA).

But sales are sensitive to the price of gas. Last month green-car sales flagged by some 30% as average prices at the pump in the U.S. dropped to near $3 a gallon, the lowest since 2010. With oil at $80 a barrel and falling, cheap gas could be with us for a while.

The efficiency of old-line internal-combustion engines is also making green-car dealers’ lives harder. The passenger car’s fuel-economy average is now 36.5 m.p.g. (6.4 L/100 km), according to the U.S. Department of Transportation, and on its way to 54.5 m.p.g. (4.3 L/100 km) as a result of regulations implemented by the Obama Administration in 2012. That, along with gas prices, is making electrics less compelling. “When gas is $3 a gallon, people are saying, ‘Why do I need to?'” says Patrick Olsen, editor of Cars.com. “People are not willing to put up with the slight inconvenience of having to charge their car.”

Plug-ins like Marchionne’s Fiat 500e are still more cost-effective to drive. Owners pay the equivalent of $1.29 a gallon to run their cars, according to the U.S. Department of Energy. But so far, consumers aren’t doing the math. The differences among electric models also make it hard for the average consumer to make sense of the wider array of new, high-tech models.

To broaden plug-ins’ appeal beyond early adopters, car companies have been narrowing the premium usually paid over gas-powered cars. Ford lowered its Focus Electric price by $6,000, to $29,995, following a $4,000 cut last year. Throw in a maximum $7,500 federal tax credit and the price is less than $23,000. That’s on par with the higher-end gas-powered model. The 2014 and 2015 Chevy Volt are $5,000 cheaper than the 2013 model. Tesla, the California luxury electric manufacturer, is making its leases 25% cheaper and offering a 90-day return policy with a new lease.

The larger problem with plug-ins and battery-powered cars is that they tend to come in two varieties: very pricey statement cars, like the BMW i8 ($135,700), or small cars packed with expensive battery technology that pushes the price up. Both have proved to be a tough sell, even though cars like the Nissan Leaf (pictured) and the Chevy Volt are great drives. At a recent automotive tech conference, a Ford executive said the industry needs to produce more affordable mid- and full-size cars to truly make plug-ins popular.

The industry has also yet to mollify consumer anxiety over battery life, especially in the Northern states, where cold winters can cut range short. Most electrics can’t go beyond 100 miles (160 km) before recharging in normal conditions. Inevitably, battery life will improve as costs decline. That’s the way of technology. “It’s still more of a long-term play,” says Ford sales guru Erich Merkle. “Battery, ranges, speed of charge, infrastructure–a lot of things that are yet to be developed.”

Automakers plan to introduce some 20 new models by 2016, according to the EDTA. That includes a next-gen Volt with an extended-range propulsion system.

American car buyers can be a shortsighted group. Up through the early 2000s, they opted for big SUVs as gas prices stayed low. Then prices spiked, and consumers scrambled to find more-efficient rides. “We are going to get back to $5 gasoline for some reason at some point. Then people will be screaming,” says Olsen. Maybe by then they’ll even be screaming for electrics.

TIME Basketball

The NBA Has More International Players Than Ever

Tony Parker
San Antonio Spurs guard Tony Parker is one of a record number of international players as the NBA season opens Tony Gutierrez—AP

As the season opens, 37 countries will be represented on team rosters

For those worked up over foreigners taking American jobs, the National Basketball League can provide some fodder. The league announced Tuesday that 101 players from 37 countries, a new record, will be on NBA rosters at the season’s start. The NBA champion San Antonio Spurs have the most foreign players, nine, leading the league in that category for the third year. Their U.N. roster includes Frenchmen Tony Parker and Boris Diaw, two Australians, a Brazilian, a Canadian, an Italian and the big man from the small island, Tim Duncan, who is from the U.S. Virgin Islands.

The league’s foreign legion is led by 12 Canadians, who apparently failed at their nation’s preferred winter sport. France provided 10 players, Australia eight and Brazil sent seven. There are also 13 players from the former Yugoslavia, as those hoop crazy nations such as Bosnia and Herzegovina and Slovenia continue to embrace the game.

There are just 450 jobs on the NBA’s 30 teams, which means that foreign players now hold 22% of them, up from 10% in the 2000-2001 season. Globalization is a two-way street, though. At least 80 Americans are playing soccer for foreign clubs.

TIME Cancer

Hospitals Furious at Cancer-Drug Price Hikes

Some of the nation’s hospitals are seriously ticked off at Genentech, the San Francisco biotech firm, for implementing a stealth price hike for three critical cancer drugs. On September 16, Genentech told hospitals and oncology clinics that as of October 1, they can only buy Avastin, Herceptin and Rituxan—three of the biggest weapons in the cancer arsenal—through specialty distributors instead of general line wholesalers they’ve been using for years.

The shift means hospitals will lose out on standard industry discounts—which Genentech and its distributors will then pocket. “Our blunt estimate: It will cost $300 million more in the U.S. overnight in what folks are paying for these lifesaving drugs,” says Pete Allen, group senior vice president, sourcing operations, for Novation, a health care services company that negotiates drug contracts. Novation estimates the hospitals it represents will take a $50 million hit—and that’s before the costs of additional inventory, handling and paperwork the hospitals might also incur.

Sales of Avastin, used to treat colorectal, ovarian and other cancers, hit $6.6 billion last year. Sales in what the company calls its HER2 breast cancer franchise—Herceptin, Perjeta and Kadcyla— rose 14% to nearly $7 billion.

“As a result of the decision to change its distribution system, Genentech’s use of specialty distributors is resulting in unprecedented price hikes, the results of which will harm the patients we serve,” said Dr. Roy Guharoy, chief pharmacy officer at Ascension Healthcare, a Catholic, nonprofit health system with some 1,500 locations, in a statement.

Genentech—owned by Roche, which had $50 billion in sales last year—says the switch to specialty wholesalers will improve the efficiency and security of the supply chain. The company says its newer cancer drugs, such as Perjeta, Kadcyla and Gazyva, are already supplied this way, which allowed it to reduce the number of distribution centers from 80 to five. “We do believe this is the best distribution model for these medicines,” said Charlotte Arnold, the company’s associate director of corporate relations. “We understand that there maybe a business impact on hospitals.” The company wouldn’t explain the specifics of why the specialty model is better.

Hospitals aren’t buying the company’s rationale. “I haven’t talked to anyone who thought this was a safer way to distribute these drugs,” says Bill Woodward, senior director of contracting at Novation. “There is nothing about these drugs that would make them safer to be in the specialty channel.” Most of the major wholesalers, in fact, already have specialty distribution arms although one general firm, Morris & Dickson, had to create a specialty arm to remain a Genentech distributor. It’s a difference without a distinction, say the hospitals, except that Genentech earns more money.

The financial cost to the hospitals comes first through the loss of rebates from the big wholesalers. But more importantly, hospitals also lose to ability to negotiate what are called cost-minus discounts with their wholesalers that, depending on the cost of a drug, amounts to a 2%-to–5% price reduction. The cost of this “back-end” funding had been borne by Genentech; now the hospitals will have eat it.

Ascension says it is already seeing significant net price hikes. A 400 mg dose of Avastin jumped from $2,382.28 on October 12 to $2,511.36 on October 14, a nearly 8% increase. Similarly, a 500mg dose of Herceptin rose to $3,878.89 from $3,586.52. Even worse for the hospitals, they can’t pass this increase on to insurance companies—since the list price remained the same, as far as insurers are concerned there’s been no increase.

Ascension has flatly alleged that Genentech is reclassifying Avastin, Herceptin and Rituxan as “specialty” drugs to enhance profits moreso than improve the supply chain. Specialty drugs usually fall under the FDA’s Risk Evaluation and Mitigation Strategy (REMS) program, established for compounds like the testosterone drug AndroGel that may have unusual side effects; or for drugs that are unusually expensive. According to Ascension, in 1990 only 10 specialty drugs existed. By 2012 that number jumped to nearly 300 compounds. “The end result is large price hikes unaccounted for in our 2015 budgets, and it will mean that already scarce resources will need to be stretched,” says Guharoy.

The hospitals are already being forced to deal with rising prices for all kinds of drugs. According to Ascension, its drug costs have risen $36 million in the past year. With 2015 pharmacy budgets already set, Genentech’s new distribution model threatens to bust hospital budgets before the year has even started.

Genentech tried a similar switch in 2006, but outraged customers forced the company to rescind the program. This time Genentech seems like it’s digging in. “We understand there may be some adjustments,” said Arnold of Genentech’s testy customers, noting that the company was “working to educate them” about the benefits of the new system.

Judging from the bile level, that could take awhile.


BMW M3 is a Perfect Family Sedan — If Your Family Works for NASCAR

This car's engine, differential, suspension, and automatic transmission all add up to one heck of a driving experience.

BMW’s new M3 4-door is technically called a sedan, as in a family car. Which it is, if you have the kind of family that enjoys slingshotting out of curves at 60 m.p.h. The M3 is to sedans what the German four-man Olympic bobsled is to your kids’ Flexible Flyer.

Understand that this is a driver’s car in every aspect, which you’d expect out of a division created to produce race cars to compete on the European touring circuit. The low, sloping hood seems to bury its face into the asphalt that you are chewing up. And you can set the M3’s controls for a variety of engine, steering, and Dynamic Stability Control (DSC) combinations so that you can feel everything that’s happening around you any way you wish. The optional dual-clutch transmission adds three mode variables to play with. But all of the settings seem designed with one thing in mind, to urge you forward.

That begins, natch, with the power plant. There was some anxiety among Beemer buddies when the engine specs of the M3 and its coupe cousin, the M4, were revealed. BMW has chosen a 3.0 liter inline 6-cylinder number to replace a beefier 4.0L V-8. But as is typical today, engine designers are coaxing more oomph out of smaller packages, which also means less weight: the I-6 gets 424 h.p., which is a 10-horse improvement. But the torque really jumps, in part because the M3 has twin turbochargers that are configured to chime in on demand. Pair that with a seamless, dual-clutch, seven-speed automatic version and the M3 means giddy passing power at any speed.

Then there’s the M Differential. Have to admit, I’ve been indifferent to differentials. Every car has one, but to the undifferentiated, let me explain: A differential is a thingamajig on the axle that uses a set of pinion gears (never mind) to change the rotational speed of a tire. It’s necessary because when you go into a left-hand curve, say, the outside right rear tire will be going faster than the inside one because it’s covering a longer distance. The differential distributes the engine torque equally to the two rear wheels, leveling the rotational speed so you aren’t burning out tires or veering off kilter.

The M3’s differential takes that basic tool and loads it with sensors that measure a range of variables such as yaw, torque, lateral acceleration, and driving speed, sniffing the ground to look for more speed and stability. When the M3 is doing this as you are entering a curve it is inevitably whispering in your ear, “Forget the brake; I’ll handle this.” And you find yourself leaving your foot on the accelerator thinking, “Yes, this makes perfect sense.”

In addition to the M Diff, there’s also a $1,000 option called Adaptive M suspension. You have the choice of Comfort, Sport, or Sport Plus, depending on how tuned into the road you want to be. According to the company, sensors are recalculating and regulating the dampers every 2.5 milliseconds at each wheel to apply the precise amount of damping. At the same time, the DSC automatic transmission has settings for three different driving modes: Efficient, Sport, and Sport Plus, as in fast, faster and Messerschmitt. The settings correspond to the response of the accelerator. In Efficient, it’s a smoother takeoff; in Sport Plus it’s more reactive. There’s even a race setting called Launch Mode that allows you to hammer the throttle from an idle position to full power.

The M3 has a race car look about it, too, with flared fender skirts, a carbon roof, and, on the inside, that combination of hard-and-soft, steel-and-leather luxury.

A car loaded with this much technology has an Apple-like premium. Although the basic price on the M3 is about $63,000, the bells and whistles add up quickly. In addition to the $1,000 Active M suspension, the M Double clutch automatic adds $2,900, and the carbon ceramic brakes $8,150 more. My test car revved in at $84,000, including the $550 “Yas Marina Blue” metallic paint job that people tend to really like or really hate.

Count me on the “like” side on the paint job; as for the M3 itself, I like it a lot. A whole lot.

TIME energy

Why Airfares Are Rising Despite Lower Fuel Costs

Delta Airlines Inc. Terminal Ahead Of Earnings Figures
A Delta Air Lines Inc. airplane departs Ronald Reagan National Airport in Washington, D.C., U.S., on Friday, July 18, 2014. Bloomberg—Bloomberg via Getty Images

Airlines stand to gain when gas costs fall

Airlines’ profits have been, yes, taking off this year, and the industry doesn’t seem inclined to change that flight path. The big carriers announced a $4 per ticket price increase Tuesday, even as falling jet fuel prices were delivering an unbudgeted bonus. Although it’s not unusual for a carrier’s announced price increase to get withdrawn when a competitor decides not to play ball, there doesn’t seem to be much resistance to Tuesday’s news.

Were you expecting the carriers to have mercy on you, given that flights are stuffed, there are upcharges for everything from baggage to overhead space to boarding early, and passengers are staging midair cage fights over knee room? Get real. As one airline consultant told me about a year ago, the semi-romantics who used to run the airlines are long gone. Instead, the folks in charge today play hardball. They are running a business, not their advertising agency’s image of air travel.

With seats in shorter supply domestically, that means pricing is going to remain tight. In Delta’s most recent quarter, for instance, its passenger yield — a measure of the average fare paid — increased 1.9%. The company’s results had Richard Anderson, Delta’s chief executive officer, crowing: “While we have more work ahead of us to achieve our long-term financial goals, we expect a record fourth quarter of 2014 with an operating margin of 10%-12%. For the full year, we expect a pre-tax profit in excess of $4 billion.” That’s following a record year last year.

Delta, like other carriers, is managing costs tighter and benefitting from the slide in oil prices. In its most recent quarter, Delta’s fuel cost declined by $23 million. According to the industry trade group A4A, a penny a gallon decrease over a year saves the carriers $190 million. Delta expects fuel to drop from $2.90 a gallon to between $2.69 and $2.74 a gallon in the current quarter.

Delta notes that there are three major drivers of airline economics: aircraft maintenance, ownership cost and fuel cost. The first two are fairly predictable costs that management has some control over. Fuel is a variable cost with a capital V. When oil was soaring, the airlines were losing billions and eventually were driven into bankruptcy. They have emerged, recapitalized and rationalized: they can make money even with much higher fuel costs. But they can make a lot more money with lower fuel costs as well as by raising prices. There is no reason not to do both. “Domestically, clearly we are in an environment where the carriers are rational, and financially motivated,” American Scott Kirby told analysts recently. ” In other words, don’t expect any free drinks any time soon.


The $64,000 GMC Sierra Denali Shows How Pickups Have Gone Crazy Luxe

A powerful engine, a moon roof, USB ports and comfortable seating for five are all signs of booms in agriculture and construction.

Even in the darkest days of the American automobile industry, pickup trucks came through. Detroit couldn’t build profitable cars to save its soul, but pickups always delivered sales and profits.

In the last couple of years, with agriculture booming and construction recovering, the auto companies have been outdoing themselves to hang on to this lucrative turf. Ford is about to launch a new, aluminum version of its top selling F-150. Chrysler has had to increase production of its Ram 1500 to keep up with demand. Meanwhile, GM is about to debut two middleweight contenders, Canyon (GMC) and Colorado (Chevy).

GMC also rolled out new versions of its heavy duty 2500 and 3500 Sierra HD models that highlight another trend: the pickup gone crazy luxe. For the successful farmer who now pilots a climate-controlled, $325,000 John Deere 9370R tractor with mission-control computer display terminals, the fully-equipped Sierra Denali 2500HD that we tested might be no less than the minimum required. This diesel-driven, high-waisted brute feels more like a working Escalade, and at $64,000 for the crew-cab, diesel version, it’s priced in the neighborhood.

Who would drop $64,000 on a pickup? Look, I’m a car guy so I really can’t answer that question, but if I had to get up at 4 a.m. every day and do actual labor on a farm or ranch, or at construction sites, I’d like to think I’d earned a cushy ride. And in the Sierra Denali you’ll get one. Once you adjust to sitting a mile high and towering over mere cars — and in Manhattan (New York, that is, not Kansas) it’s kind of a cool perspective — you realize that the Sierra doesn’t feel like a truck. On the highway, it’s one of the quietest vehicles on the highway that I’ve tested this year.

That’s even more surprising considering that this particular Sierra Denali is powered by a 6.6 L V8 Duramax diesel tied to a 6-speed Allison Transmission. But this combo, odd to say, doesn’t shout its 397 h.p. worth of trucky-ness. Because the diesel delivers bigtime torque at low revs, (765 lb. ft. @ 1,600) the pickup’s power sounds more oceanlike as it gathers force. You’ll pay for that power, with the diesel package adding $8,845 to the standard price of $53,740. Since you are already in luxury car territory, why not throw in a power sunroof ($995), aluminum rims ($850), and 20-inch tires ($200)?

You are now styling in four-wheel drive and your buddies will appreciate it: You can fit four of them in the Sierra Denali 2500HD, and they will be properly seated in the more-than-roomy-enough crew cab. You, though, will have the best seat, one that’s heated and air conditioned and equipped with its own alarm system: The seat shimmies to keep you alert in slow traffic or if it senses you are drifting out of your lane. And because this is a work truck, the center console is loaded with storage for files, laptops, or even power tools; there’s also a power panel that includes USB ports, a couple of 12-volt ports, and a standard electrical outlet.

It would be silly of me to try to tow a trailer around New York City, but the Sierra Denali 2500HD can haul one weighing up to 13,000 lb. On the other hand, we did manage a brief four-wheel drive test on a rough patch of Harriman State Park about 50 miles north of New York. The fall foliage was beautiful and the pickup handled the high brush easily given its substantial ground clearance. I’d be looking forward to winter driving in this thing if I worked outside. Although I wouldn’t be looking forward to working outside.

TIME Diet/Nutrition

The Case Against Cooking

gas stove
Getty Images

Bill Saporito is an assistant managing editor of TIME and directs the magazine's coverage of business, the economy, personal finance, and sports.

'Not cooking doesn’t have to doom you to a life of junk food'

The guy from Con Edison comes knocking on our apartment door once a month. He’s there to read the gas meter in our kitchen, where the gas meter is located in an apartment building constructed in 1928. He needn’t bother, since that meter hasn’t budged since, oh, 2010, when we shut off the gas.

The reason my wife and I don’t cook our food is the same reason that we don’t hunt our food. These skills are no longer required to sidestep starvation. Cooking now ranks right up there with vacuuming—except that vacuuming removes a mess while cooking creates one. We have more efficient uses of our time and energy.

And it’s not just us. According to the United States Department of Agriculture, (notice, there’s no Department of Cooking) Americans spent 43.1% of our food budgets on food bought away from home in 2012, up from 25.9% in 1970. It’s the highest level ever. One reason is that food costs a lot less now then it did in 1970. We spend less of our total income on food, so we can be a little less fussy about who makes it.

Chef Mark Bittman properly rails about the empty calories Americans consume that have led to our obesity crisis, but not cooking doesn’t have to doom you to a life of junk food. I don’t eat burgers. But there are plenty of other options in my neighborhood. The Chinese takeout joints can offer steamed veggies and tofu over brown rice at a price you couldn’t possibly beat in your own kitchen. (Not that you’d want to.) There’s a vegan place — right next to the steakhouse. Burmese, Persian, Italian, Jewish, French, Mexican, Indian, Turkish, and Thai outlets vie all for my patronage with fresh deliciousness, delivered to your door in under 20 minutes at a reasonable price.

Granted, New York is a dense city that can support 15,000 restaurants, and its crazy ethnic mix yields unmatched variety, but the rest of the country is catching up fast. The growth Hispanic America has been a godsend to better options. Emerging fast-casual, healthier-food chains with names like Garbanzo Mediterranean Grill are getting traction—one reason McDonald’s is struggling. And supermarket chains offer heat-and-eat meals that are freshly made. There’s a name for it: home meal replacement, as in HMR. Bless us, even 7-Eleven is getting into the game. You’re going to be able to buy real food there along with your cigarettes and Slurpees.

When I was a kid, families cooked at home because they were too poor, relatively speaking, to eat at restaurants, and Mom was home to woman the stove. Today, it’s the opposite: many Americans are too poor to cook at home; they’re way too busy trying to scratch out a living. For working parents chasing a couple (or more) jobs and a couple of kids, the act of acquiring and cooking food is a time-consuming luxury.

Where did we get this idea that we must commune with food through the medium of cooking? Why do I have to have a spiritual relationship with produce? (And especially with you, broccoli.) The kitchen as we know it today is a relative newcomer to the American home. Brooklyn is filled with 19th-century Federal-style row houses whose owners often fret about nailing down period details; but all these homes have retrofitted modern kitchens because the kitchen was originally in the basement. Cooking had been kicked out of the hearth and relegated to the remote part of the house.

Not cooking isn’t new, either. Until the Depression, a vast servant class existed in the U.S.—it pops up all over census reports—so that even lower-middle class families could afford hired help who did the menial work, such as cooking—in the basement. The modern-day counterparts of those servants are working at McDonalds.

The American Dream home with mom playing Queen of the Kitchen has always been more myth than reality. It wasn’t until the postwar period that companies like the Generals—Electric and Mills—began to fetishize the kitchen and the happy homemakers who would inhabit them. This is a relatively brief and booming period that began to come apart like a badly made muffin with the deindustrialization of the economy in the late 1970s and early 1980s and the advance of women in the workforce. Even GE is done with cooking: the company just sold its appliance division to concentrate on more complex and profitable stuff, like jet engines. What GE is saying about cooking is that the idea of transforming comestibles into combustibles through the application of heat in a specialized space is a relic of another age.

What I am saying is that if cooking can’t be done on my iPad, is there any point in doing it?

I love a great meal, and I’ve been lucky enough to eat remarkable ones prepared by talented chefs in Europe as well as in the U.S. I also have a friend who is a terrific cook and takes pleasure in sharing the fruits of his hobby. My wife and I are always delighted to indulge him. I can also appreciate that cooking evangelists like Bittman aren’t trying to start a cult, but rather trying to improve our wellbeing. That’s really admirable, but veneration of the stove isn’t the only way to change what Americans eat or their BMI. It’s why Con Ed’s meter reader will continue to come up empty when he reaches our door.

TIME Ideas hosts the world's leading voices, providing commentary and expertise on the most compelling events in news, society, and culture. We welcome outside contributions. To submit a piece, email ideas@time.com.


VW’s New Golf Makes the Case for Diesel

The redesigned 2015 VW Golf brings a quieter, more efficient diesel experience to the American consumer.

Diesel has been a dirty word in the American automobile industry for too long. We can’t seem to get the idea out of our heads that “diesel” means smelly, sluggish, expensive and, well, European.

And that’s always been perplexing to European car manufacturers, who have been continually improving the technology, making it cleaner and more efficient.

We may be entering a diesel renaissance in the U.S., however. Sales of diesel-powered cars increased 25% percent during the first six months of 2014, according to HybridCars.com. That’s in some measure because American car makers are increasing the number of diesel options. Chevrolet has added a 2.0L diesel option to its popular Cruz lineup, and more diesels are popping up in pickup trucks such as Chrysler’s Ram. Next year Chevy will add a diesel to its midsized Colorado and GMC Canyon midsized pickups. Mazda is also joining the party.

What’s driving diesel ahead? For one, diesel engines are much cleaner than in the past. Chevy’s Clean Turbo Diesel generates 90% lower nitrogen oxide emissions than earlier models, says the company. That makes environmental regulators happy.

But a 46 m.p.g. highway efficiency rating in the Cruz is what makes buyers happy — and it’s one reason the Cruz power plant was the third diesel engine to make WardsAuto’s top 10 engines list this year. The other two include the 3.0L V-6 turbo diesel that powers both the Ram 1500 pickup and the new Jeep Grand Cherokee; the 3.0L, 6-cylinder turbo diesel pushing both the BMW 535d sedan and X5 crossover rounded out the list.

Even better, the premium you have to pay for the diesel over a gasoline engine — the step-up price — is narrowing. In Volkswagen’s new 4-door Golf, for instance, the 2.0L TDI diesel version is priced at $21,995 for the basic S trim package compared with $20,695 for the 1.8L gas-powered model. “When you look at the step price vs. fuel efficiency, customers are seeing value,” says Doug Skorupski, powertrain strategy manager. The Golf diesel is rated 30 m.p.g. city/45 m.p.g. highway, making it 9 m.p.g. better on the interstate than then gasoline model. And some reviewers are reporting much higher figures for the diesel’s efficiency. On a practical basis, that means you can go weeks without filling the tank.

Does it pay to drive a diesel? Depends on how much you drive, how long you plan to keep your car and how much you beat it up. Diesels are more fuel efficient because you get more compression out of the engine and thus more power compared with gas. Diesel fuel is currently priced about 36c a gallon more than gasoline ($3.457 vs. $3.814, according to the U.S. Energy Information Agency), although that gap is narrower in some places, such as California.

At those prices, you’d have to drive about 100,000 highway miles to erase the premium you paid for the diesel engine. But diesels tend to be lower maintenance, and their resale value is higher, making total cost of ownership lower. “These diesel engines really like to work,” says Skorupski. “No matter how you tend to drive the vehicle, they maintain efficiency.” Translation: You can beat the hell out of them. VW says that 23% of its sales are diesels, but 45% of Golf buyers are choosing diesel.

VW has been selling diesels in the U.S. forever and recently launched its redesigned 2015 Golf, three versions of which come with the company’s TDI (for “turbo direct injection”) diesel engine. The new Golf, the 7th version of this venerable model, represents badly needed fresh merchandise for the VW portfolio, which has suffered in the U.S. for the lack of new product.

And the diesel version can easily make a case for itself. For one, the TDI answers one of the old issues about diesels, that their power isn’t matched by their acceleration. Engineers refer to it as torque curve; as diesels go up rpms, they lose their giddyup.

That’s not the case in the TDI. There’s more than enough torque available, even if the trip up the gears is noticeable on the DSG automatic transmission. VW has made this Golf about two inches longer, an inch lower, and half an inch wider. On the road, the TDI is one of the quietest cars I’ve driven all year. Inside, you may not be dazzled by the styling, but VW sedans have always been about function and value over silliness.

So have diesel owners in general. Remember those Volvo diesel owners you made fun of in the 1980s because of their cars’ sluggish performance? Those days are over. Road & Track reports that Volvo’s five-cylinder, diesel/electric V60 hybrid delivers more torque than a Lamborghini Gallardo. Sensibly, of course.

TIME Food & Drink

Pepsi Pops Open a New Low-Calorie Soda

Pepsi CEO Indra Nooyi Courtesy of Pepsi

Meet Pepsi True

When PepsiCo and two other members of Big Soda—Coca-Cola and the Dr. Pepper Snapple Group—announced a pact with The Alliance for a Healthier Generation to reduce the number of calories people consume in their beverages by 20% over the next decade, skepticism bubbled to the top. How could the companies lower calorie intake without reducing the serving size? And if they did that, wouldn’t sales fall and wouldn’t Wall Street skewer them?

But Pepsi CEO Indra Nooyi has been on an innovation kick these past two years, and by the time the Clinton Global Initiative announced the calorie treaty, Pepsi already had an answer in place. It’s a product called Pepsi True, a cola unveiled Wednesday that’s sweetened with a combination of sugar and stevia, which is plant-based. Offsetting sugar with stevia reduces the sugar content by 30% and the calories delivered by 40%. Each 7.5 oz. can of Pepsi True will cost you 60 calories and be priced on par with plain old Pepsi. Initially, PepsiCo is going to market Pepsi True in a 24-pack of 7.5 oz cans via Amazon.com, beginning later this month.

The stevia-sugar combo is a sort of natural evolution for the company. Pepsi released a 100% stevia-based product called Pepsi Next in 2012 outside of the U.S. And although stevia is sweeter than sugar, it doesn’t necessarily deliver the same flavor profile. (Pepsi also sells a zero-calorie Pepsi Max. In combining stevia and sugar—not high-fructose corn syrup—Pepsi is trying to deliver the taste without the waist.

This latest cola twist may not be a huge risk for PepsiCo. Ironically enough, the company has been cutting back on the sugary carbonated beverages that nutritionist have been complaining about. Over the last decade or so the company acquired such non-fizzy drinks as Gatorade, Naked Juice, Sobe and Tropicana. Less than 25% of the company’s beverage sales in North America come from cola.

Still, Pepsi sells lots and lots of Pepsi, and the idea of losing more sales dollars is not a good idea for a company that has been under pressure from two distinct sets of critics. On Wall Street, investors such as Nelson Peltz have suggested to Nooyi that the company be broken in two: Frito-Lay, the snack food company and Pepsi, the beverage company. Instead, Nooyi kept Pepsi on an innovation diet that has worked. Pepsi now gets 20% of its revenue from its nutrition businesses, for instance, which helped the company beat its financial targets last year. Yet that, and Nooyi’s chairmanship of the Health Weight Commitment Foundation, an industry-related group that has removed 6.4 trillion calories from the marketplace compared with 2007, hasn’t placated her severest critics. Maybe they’ll find Pepsi True easier to swallow.


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