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This 30-MPG Jeep Could Have Been the Tesla SUV -- Almost

NEW YORK (TheStreet) -- The Jeep Grand Cherokee (JGC) offered by Fiat (FIATY) subsidiary Chrysler is a large two-row (five-seat) SUV that unlike most other SUVs these days is "trail rated" and truly ready for off-road performance. It's basically the American Range Rover.

For many years, the JGC badly trailed the competition in terms of overall comfort and refinement. Finally, those dark years are over. In an overhaul that recently entered production, the JGC got three things that has put it near the top of the SUV game:

  1. The interior was improved on all fronts, including new electronics and infotainment.
  2. The transmission is now a German 8-speed, sort of like BMW, Mercedes and Audi.
  3. The new optional engine is a diesel, yielding 30 miles per gallon on the highway.

So what we have here is a car that is assembled in Detroit but has an Italian diesel engine, and a German 8-speed automatic transmission. David Ricardo must be smiling from his grave because this is international comparative advantage at its finest.

The JGC is a car with off-road capabilities that most people probably don't need, and almost no other quiet and comfortable car offers. It has higher ground clearance, more aggressive approach and departure angles, and more settings for off-road behaviors, than most other non-exotically-priced off-roaders such as the Mercedes G and equivalent.

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These superior off-road capabilities make the JGC suitable for people who face harsh physical obstacles where they drive. Perhaps you are a farmer, a hunter, oil driller or live where there is lots of snow. You might live in North Dakota, Montana or Alaska.

Normally, this kind of vehicle could never exceed 25 mpg on the highway, typically yielding less. One of the reasons is that all of this high ground clearance and 4x4 capability adds weight and reduces aerodynamic performance.

The addition of a diesel option for the JGC has now improved both the torque and fuel economy materially. It is rated at 21 mpg city and 28 mpg highway. In 850 miles of driving over 11 days, I achieved 21 mpg in the city and 30 mpg on the highway.

The diesel engine is a $4,500 option and will therefore take a long time, and many miles, to pay off. That said, in recent years diesel versions of all other cars have yielded better second-hand values. I suppose this will be the case here as well.

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