How does 41 city mpg/36 highway sound for a midsize luxury sedan that offers a long list of interior bells and whistles? If that grabbed your attention, then test drive the 2012 Lincoln MKZ Hybrid. Or, if you can wait until late fall, an all-new 2013 model ups the fuel economy numbers to an expected 47 city/44 highway.

But let’s get back to the 2012 model, a car that gets better fuel economy than anything else in its class.

Last year, Ford officials were quoted as saying it wants as much as 25 percent of its global fleet to be powered by motors and batteries by 2020. The company expects 75 percent of those vehicles to be conventional hybrids – and the rest made up of pure electric cars or plug-in hybrids.

The 2012 Lincoln MKZ Hybrid is a good example of how Ford is scaling up to reach its target—by spreading its best electric-drive technology across common platforms. Instead of dreaming up a brand new purpose-built gas-electric vehicle for its Lincoln luxury nameplate, Ford migrated the technology from its award-winning Ford Fusion Hybrid to the MKZ.

Following in Tracks of Ford Fusion Hybrid

With the hybrid powertrain for the Fusion mid-size sedan in the barn, it was a no brainer to extend it to the Lincoln MKZ. Under the hood is Ford’s second-generation Hybrid Powersplit drivetrain. Cutting through the engineering-speak, this means a 156 horsepower, 2.5-liter lean-burning, Atkinson cycle gasoline engine sharing motivational tasks with a 106 horsepower AC electric motor. A planetary gear set transmits the blended output to an electronically controlled continuously variable transmission (CVT) that directs the power to the front wheels.

Differences in the torque curves of the gas engine and electric motor means that the system’s output is 191 hp, a more than adequate amount of power for a midsize sedan. Ford doesn’t publish torque numbers for the electric motor, but the four-cylinder engine produces 136 pounds-feet.

As a parallel, or “full,” hybrid system, the MKZ Hybrid is able to operate under pure-electric power only, gasoline power only, or a combination of the two. The system makes all the decisions: when to engage motor, engine, or both. When the 275-volt nickel-metal-hydride battery pack is fully charged, the car can operate as an electric vehicle (EV) up to 47 mph for around two miles before the gas engine kicks in. And, unlike other hybrid vehicles, you don’t have to drive like Miss Daisy to reach the electric top speed.

The judgment of the MKZ’s hybrid powertrain by auto critics, not unexpectedly, parallels the Ford Fusion Hybrid. Car and Driver stated, “When we recognized the Fusion hybrid as a 10Best winner in 2010, we noted that ‘you can drive it for fun (a hybrid first) or for mileage — which is also fun. “This applies verbatim to the MKZ hybrid.” As for the transition from electric motor to gas engine, CNET said it “was almost imperceptible.”

As for ride and handling, reviewers have been mostly positive. Motor Trend had this to say: “Off-center steering motions are Lexus-liquidy; the ride’s absorbency suggests the sponges in the suspension are from Neiman Marcus; and the brake pedal says this is a luxury car being stopped with virtually no regen-braking sensation.” And Popular Mechanics’ reviewer said, “As Lincolns go, the MKZ has always been a fairly flat-cornering machine, and the hybrid version of the sedan is no different.”

Exterior and Interior

The MKZ was restyled for 2010 and continues with no changes for the 2012 model year. The only thing that distinguishes the hybrid from the gasoline MKZ is small hybrid badges on the front doors and trunk lid. Up front is a trademark Lincoln bold waterfall grille that mimics the Lincoln MKS, which was in turn inspired by the styling of the Lincoln MKR concept. With the more rounded sheetmetal up front, the grille blends well with the unchanged main bodywork. In back, wide, low taillights – another long-standing styling trademark – are separated by a bit of sheetmetal and ornamented with the Lincoln logo, mirroring the front styling.
Overall, the car is sensibly proportioned with just the right amount of chrome accents. Designers added it like a woman adds pearls to a black dress.

The cabin follows the Fusion Hybrid’s layout, and while it is more upscale, reviewers have panned the design, which they say is behind the benchmarks set by other luxury class automakers. “Unfortunately, while the mechanicals in the MKZ Hybrid are as solid as can be,” says Popular Mechanics, “the interior falls far short of what we’ve come to expect from Ford’s designers.”

That said, the cabin can be described as business-class luxury, conveying the attributes of simplicity. Leather, climate controlled seating is superb and the 10-way power driver’s seat teams up with the fully adjustable steering column to produce an excellent driving position for people of all statures.

The list of features available with Lincoln MKZ Hybrid is extensive: SYNC (Ford’s voice-activated communications and entertainment system); adaptive HID headlamps; 10-way power seats; heated and cooled front seats; reverse sensing system; keyless entry; capless fuel-filler; a suite of safety features including dual-stage front air bags; parental key systems to limit speed and audio volume for teens; and integrated spotter mirrors.

Let’s not overlook the wood trim using eco-friendly veneers from “well-managed forests” and the standard “Bridge of Weir” leather seats, which show off the character of the grain and use a chromium-free tanning process.

Like the Fusion Hybrid, the Lincoln features what Ford calls the SmartGauge. It helps the driver to learn specific techniques to achieve higher efficiency. The dashboard interface offers feedback to the driver—both visual and sound. In other words, it actually talks to you. The gauge cluster is comprised of dual hi-resolution LCD screens to display instantaneous mileage and fuel economy history—as well as key data including battery charge, engine output and accessory power consumption.

The Lincoln version enhances the animation of a vine of leaves that grows as the driver(s) becomes more efficient over time by adding white apple blossoms. When the entire bouquet of five blossoms is shown, the driver has saved about 200 gallons of gas, or 4000 pounds of CO2, according to Lincoln. To prevent sensory overload, the system allows the driver to decide how much information to see, and what can be ignored.

Kiss Hybrid Premium Good-bye

When introduced in the fall of 2010 as a 2011 model, Lincoln did something no other car company had done, priced the Lincoln MKZ Hybrid the same as the gasoline-powered model. That carries over for the 2012 edition and buyers can select either for the starting price of $34,755.

The consistent criticism levied against hybrids is their additional cost compared to similar conventional vehicles. Hybrid critics acknowledge that gas-electric cars save gas, but they say the additional cost – in some cases, thousands of dollars more—means that consumers will not recoup the premium during their ownership period. That argument is erased if the hybrid version is offered at the same price as the conventional gas-powered car—or if the premium is only a couple hundred dollars. The hybrid premium argument is similarly erased if a popular high-volume vehicle is only offered as a hybrid.

For buyers considering a Lincoln MKZ, the hybrid model makes for an easy choice. The only compelling reason to choose the gasoline MKZ over the hybrid, it would seem, is if you drive on snowy or icy roads and choose the optional all-wheel drive.

The MKZ Hybrid faces only one midsize luxury hybrid competitor: the Lexus HS 250h. While both are four-door sedans, the MKZ offers considerably more interior space, delivers better fuel economy – plus 6 mpg city, plus 2 mpg highway – and costs $2,275 less than the Lexus. Motor Trend put it this way, “The main bogey for the MKZ Hybrid is the Lexus HS 250h, and Lincoln has come out with guns blazing, pushing the Lincoln’s better fuel economy, and the fact that it has more standard luxury, technology and safety features than the Lexus.”

If you are not dead set on buying luxury, take a look the MKZ’s blue jeans brother, the Ford Fusion Hybrid. While the Lincoln’s interior is more refined, they both have the same hybrid powertrain that delivers equal fuel economy. The difference between the two? The Fusion Hybrid is $6,000 less.

The MKZ makes a good impression, graced as it is with good manners, high-tech galore and fashionably outfitted with the top-of-the-line leather and wood. Add 41 mpg in the city and that earns it a place on your shopping list if you’re looking for great hybrid technology in a luxury package.

Should You Wait For The 2013 MKZ Hybrid?

Wait for the 2013 MKZ Hybrid if you want the advances in fuel economy, high-tech gear and safety features that accompany an all-new design. Waiting will also mean the car’s styling will look current for several years and it will be worth more at resale than the outgoing 2012 model. But factor in the strong likelihood that the 2013 MKZ Hybrid will cost more than the 2012 model and the possibility the hybrid version may be priced at a higher price than the new gasoline model.

If you don’t place a premium on the latest styling or technology buy, the 2012 MKZ Hybrid, it will serve you well. Plus, you can save money with the expected manufacturer incentives and dealer discounts as inventories of the 2012 model are cleared out to make way for the 2013 MKZ Hybrid.

Prices are Manufacturer Suggested Retail Price (MSRP) at time of publication and do not include destination charges, taxes or licensing.

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Fortunately, with each new generation of Ford’s hybrid system, the costs are dropping. According to Automotive News, the cost of the hybrid system in next year’s new C-Max Hybrid will be 30 percent less than the previous-generation hybrid technology in the 2010 Ford Fusion Hybrid. And by the time the following generation hybrid is ready in a couple of years, Marakby believes he will have knocked it down by another 30 percent.

How is Ford achieving those cost reductions?

• Ford developed its own in-house battery system that will be manufactured at the automaker’s Rawsonville, Mich., plant next year. Ford developed everything for the system, from the tooling to the wiring, sensors and controls. All the components are assembled by Ford in its facility. (Battery cells come from Compact Power.)
• Ford developed its own hybrid transmission, which will be manufactured at a suburban Detroit plant.
• Ford also brought system integration and software development in-house. The software can control battery and motors, as well as the total system, to achieve maximum efficiency.
• All the parts used for hybrids and other electric-drive vehicles are made common, and software and control systems are re-used as much as possible.

These efforts are already starting to bear fruit. When Ford priced the Lincoln MKZ Hybrid at the exact same amount as the gas version—$35,455, including shipping—the company expected about 15 percent of buyers to go for the hybrid version. Instead, nearly 25 percent are driving off the lot with the hybrid.

This sales performance gives Ford greater confidence in achieving its estimate that as many as 25 percent of all its sales will be a hybrid, plug-in hybrid or electric vehicle by 2020.

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With all of this in mind, you’d think that Ford executives would be pretty optimistic about the climate for hybrids—but evidently that’s not the case. Jamie LaReau of Automotive News reports that Ford’s vice president of global marketing, Jim Farley, told her the carmaker doesn’t expect much in the way of sales from its hybrids in the near future.

“You can’t sell a hybrid in today’s market,” Farley is reported to have said in a rooftop conversation at the media unveiling of the new MKZ hybrid. LaReau writes that Farley was equally pessimistic about the car he was there to celebrate:

The subject of that rooftop conversation was gas prices, which are widely blamed for souring what had been a booming hybrid market. Indeed, with gas prices relatively low, not as many new car buyers have been interested in paying the so-called “hybrid premium” that the MKZ is about to shatter. But even without that extra cost, the MKZ is a sedan that starts at a little over $35,000—making it less than ideal for today’s economic climate.

Sweating the Ticker

Farley isn’t the only executive at the company to bemoan low gas prices. Ford Canada CEO David Mondragon told an audience on Thursday that hybrid and electric vehicle offerings will be facing an uphill battle as long as gas remains cheap. “It’s hard to believe that I’m going to say this, but we need higher fuel prices,” admitted Mondragon.

That doesn’t mean Ford regrets its move into fuel efficient vehicles. In the same speech, Mondragon called the oversized gas-guzzlers that the carmaker used to be known for “dinosaurs,” saying that the company’s eyes were fixed firmly on the future, when oil prices are expected to eventually resume their seemingly inevitable climb.

Whether or not that happens as soon as Mondragon or Farley might like, carmakers will have to dramatically improve the efficiency of their vehicles in order to keep up with rising federal CAFE standards. But if consumers still aren’t buying vehicles at the higher end of the fuel economy spectrum a few years down the road, is it possible that the industry might consider getting behind a gas tax? It certainly wouldn’t be politically popular, but it might be a more certain route to 60 mpg than the CAFE is capable of delivering on its own.

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The MKZ Hybrid is a luxury variant of the 2011 Ford Fusion Hybrid, which is priced at $28,825. Both vehicles have a 156-horsepower 2.5-liter four-cylinder coupled with an electric motor to produce a total 191 horsepower, and deliver fuel-economy ratings of 41 mpg in the city and 36 on the highway.

This is the second major sign in the past week that hybrids are headed to the heart of the mainstream market. The other news is that Honda, starting next year, will only offer the hybrid version of the Honda Civic in Japan, and will stop selling the gas-powered Civic in the company’s domestic market.

Kiss Hybrid Premium Goodbye

The consistent criticism levied against hybrids is their additional cost compared to similar conventional vehicles. Hybrid critics acknowledge that gas-electric cars save gas, but they say the additional cost—in some cases, thousands of dollars more—means that consumers will not recoup the premium during their ownership period. That argument is erased if the hybrid version is offered at the same price as the conventional gas-powered car—or if the premium is only a couple hundred dollars. The hybrid premium argument is similarly erased if a popular high-volume vehicle is only offered as a hybrid.

James Bell, executive market analyst for Kelley Blue Book, told Detroit News, “It’s very big news and I give Ford thumbs up for making it happen…The price difference is being washed away.”

Perhaps it’s easier for Ford to offer price parity on a low-volume luxury vehicle like the MKZ, than it would be for a big seller. Nonetheless, hybrid sales could skyrocket if other carmakers offer hybrids with little or no price premium—especially if gas prices climb.

Why would a shopper buy the lower-mpg version of a car if the higher-mpg hybrid costs the same?

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A few years ago, a luxury sedan achieving more than 40 MPG in the city would have been big news. With hybrid technology, it’s quickly becoming a regular occurrence.

Ford is positioning the 2011 Lincoln MKZ Hybrid to compete against the 2010 Lexus HS 250h. The MKZ beats the HS250h in terms of fuel economy by 6 MPG, and provides more engine power and passenger room. The MKZ’s combined gasoline engine and electric motor provide 191 net horsepower.

“The Lincoln MKZ Hybrid offers everything our customers look for in a midsize luxury sedan, plus unsurpassed fuel economy,” said Derrick Kuzak, Ford’s group vice president, Global Product Development, in a press release. The MKZ’s claim for fuel economy leadership in the luxury category may be short-lived, with the premium compact Lexus CT 200h hitting dealerships later this year or in early 2011.

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