Paying the extra cost for hybrid technology is offset by the fuel savings in MGPs. The cost of oil will continue to rise because demand will rise since the world’s population continues to grow and more countries develop. However, technological advances will be available to consumers via the mass market soon and will offer new options that save more money and fuel in addition to reduce greenhouse gas emissions.

Toyota will be releasing a plug-in hybrid electric vehicle or PHEV upgrade for the Prius by 2010 and Ford will upgrade its Escape Hybird SUV into a PHEV probably a bit later. A PHEV running on battery produced power uses no fuel therefore produces zero emissions. Technology has not caught up with ideas as lighter weight and more reliable lithium-ion batteries are needed.

What about GM?

Although GM is releasing the Volt, in my opinion GM is still missing the point. Plenty of fuel efficient car market still exists. However, GM needs to be more robust if the company is serious about competing. Toyota has had hybrids on the road for a decade or more and has built a confident market.

My friends have owned a Prius for almost 3 years and swear by its price tag being offset by the incurred fuel savings and other incentives. Personally, I do not drive as I gave up my car when I moved to Grand Rapids.

In addition, hybrid vehicles such as the Prius are versatile and can be integrated with solar systems, used as a generator for your home and can be converted into a PHEV now. Versatility fights economic waste and it is what markets appreciate.

Anyhow, if you are willing to pay for a large hybrid SUV from GM that gets only a small improvement in fuel economy then why not purchase a Ford Escape Hybrid or Toyota Prius that gets superior fuel mileage or even something like a Ford Focus that is both cheap and gets decent gas mileage. I believe that Americans either want smaller, cheaper, traditional cars that get decent gas mileage or true hybrids or other fuel efficient and/or flexible fuel vehicles that get superior gas mileage and not some monster that gets barely 20 MPG as opposed to one that gets 9 MPG. However, I could be entirely wrong. From CNNMoney.com:

While most car companies put complex hybrid systems into small and mid-size cars and crossover SUVs, GM’s first full-hybrid vehicle is a large SUV. The thinking is this: The vehicle that drinks the most gas needs the most help.

On the other end of the scale is the Chevrolet Malibu, a mid-size sedan. Where other car companies stuff a huge battery pack in the trunk with a big cost premium to match, GM keeps the cost and battery-size down by using a system that just helps a little. The result is a roughly 10% improvement in fuel economy at a low price.

There are challenges to this approach. The fuel-economy numbers alone aren’t eye-catching. You have to look at the whole picture. GM has to convince customers that what they’re losing in mileage, they’re gaining in value.

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