US prepares for hybrid onslaught

Sales of hybrid cars in the US are set to double in 2005, research suggests.

Research group JD Power estimates sales will hit 200,000 in 2005, despite higher prices and customer scepticism.

Carmakers are starting to build hybrid sports utility vehicles (SUVs), the four-wheel-drive vehicles which now dominate the US car market.

(Picture Right Above: Ford is racing to catch up on hybrids)

Hybrids cut both petrol consumption and emissions by combining a petrol engine with an electric motor constantly kept charged by extra engine power.

Several jurisdictions, notably the state of California, mandate low emissions for new cars.

Equally, the rise in oil prices over the past year has sparked hopes that consumers may be tempted by potential savings of a few hundred dollars a year on fuel.

The race is on

At the Detroit Motor Show, a range of manufacturers are prominently displaying their hybrid credentials.

Toyota has led the market to date with the Prius, popularised by a number of celebrities keen to burnish their "green" credentials.

In April it will launch a hybrid version of its luxury Lexus SUV, with a Highlander SUV due later in the year.

Honda has three hybrids on the market, and between them the two Japanese carmakers sold more than 80,000 units last year.

(Right Picture: Hollywood has taken hybrids to its heart)

Ford, which has sold 4,000 of its first hybrid since its launch in August, is bringing a hybrid SUV - the Mariner - to market a year ahead of schedule, with plans for three more models by 2008.

GM has a hybrid pickup on the market and is showing two concept SUVs in Detroit.

Even sports car maker Porsche may join the race, although it insists it is still considering whether to hybridise its Cayenne SUV.

Caution

Others remain more sceptical.

Nissan has bought Toyota's hybrid technology, but plans to bring out its first model only in 2006.

"We want to make sure we are not concentrating on one technology," Nissan chief executive Carlos Ghosn said.

"We will not be surprised by any acceleration or deceleration in the hybrid market."

Volkswagen, meanwhile, says it will focus on clean-burning diesel engines instead.

And some watchers point out that the price tag on a hybrid - upwards of $3,000 above that of an equivalent normal-engined car, and suspicion of the technology - may still cool its attraction.

"The average consumers aren't willing to pay that premium for a car they won't drive more than six years," said Anthony Pratt from JD Power.

http://news.bbc.co.uk

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Hybrid cars take hold in US

By Kevin Anderson BBC News Website, Washington

The United States - land of the brave and home of the SUV, sport utility vehicle.

But now the gas-guzzling gargantuans are being challenged by fuel-efficient, environmentally friendly hybrids like the Toyota Prius and hybrid versions of popular models from Honda.

(Picture Above: Hybrid car owners rally for energy independence in Washington)

The hybrids could one day help to reduce the United States' output of greenhouse gasses, but despite the buzz surrounding them, they still make up a relatively small percentage of auto sales.

'Prius Patriots'

Hybrids use both petrol and electric motors to double their fuel efficiency and halve their emissions.

It's a well-known fact that environmentally-minded celebrities including Cameron Diaz and Leonardo DiCaprio have bought them.

As a matter of fact, Mr DiCaprio has a small fleet of four not only for himself but also for his mother, father and step-mother.

The Washington Post called Toyota's Prius hybrid "Hollywood's latest politically correct status symbol".

But it's not just environmentally minded movie stars that are snapping up hybrids by the thousands.

Hybrid cars are one of the few things that seem to bridge the political divide in the US.

"It's a darn shame the US manufacturers didn't get on the bandwagon"
[John Andersen, hybrid car owner]

So-called "Prius Patriots" including former CIA director James Woolsey drive the cars because they see it as a strategic necessity for the US to reduce its dependence on foreign oil.

According to the Natural Resources Defense Council, the US spends $200,000 every minute on foreign oil.

John Andersen, who lives outside of Washington DC, drove his Prius in a rally last summer on the 4th of July holiday, which was billed as a declaration of independence from foreign oil.

Mr Andersen describes himself as a pro-life, religious conservative who still has to be convinced of the threat of global warming, but he loves his petrol-sipping Prius.

He loves it so much he says he will never buy another traditional car.

Depending on his driving patterns, he sometimes gets as much as 53 miles to the gallon, compared to an estimated 9.6 miles per gallon for Hummer's H2 heavy-duty SUV (based on listed range and fuel capacity).

Mr Andersen has been disappointed by US hybrid efforts. "It's a darn shame the US manufacturers didn't get on the bandwagon," he said.

A hybrid version of the Ford Escape, an SUV, achieves only 33 miles to the gallon, according to the Ford website.

US automakers say they are working hard to develop hydrogen fuel-cell technology, but Mr Andersen said the widespread use of fuel cells is still years away.

"That's what great about hybrids. They are here now," he said.

Small percentage of market

However, despite the buzz about cars like Toyota's Prius, hybrids still make up a relatively small percentage of overall car sales in the US.

Toyota plans to double the production of the Prius to 100,000 a year for the US to help alleviate severe shortages in some parts of country, where buyers must wait three to six months to take delivery.

Last year, about 80,000 hybrid cars and trucks were sold out of some 17m total sales in the US, according to David Friedman, research director for the Union of Concerned Scientists' Clean Vehicle Program.

"Hybrids are becoming a mainstream product," he said, adding that if anyone would have said five years ago that hybrid sales in the US would be approaching 100,000 per year, it would have been thought "inconceivable".

"If for every 40-mile-per-gallon hybrid sold, they sell a 16-mile-per-gallon gas guzzler, then there will be no effect from hybrids"
[David Friedman, Union of Concerned Scientists]

Mr Friedman said that Americans would have to buy 40m to 60m hybrids over the next 10 years to stall greenhouse gas emissions at 2010 levels.

"If the government continues its vacuum of leadership, nothing will happen" to address greenhouse gas emissions, he said.

The US government sets a minimum standard for fuel economy for auto manufacturers.

But the minimum applies to a weighted average across the entire line of vehicles sold by the manufacturer, and trucks and SUVs are held to lower standards.

Furthermore, SUVs designated as heavy duty vehicles like the Hummer H2 are not held to any standard.

"If for every 40-mile-per-gallon hybrid sold, they sell a 16-mile-per-gallon gas guzzler, then there will be no effect from hybrids," Mr Friedman said.

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Hybrid cars: Do they make sense for you?

Soaring gas prices and a tax deduction may sway some buyers, but if you'd rather go cheap than go green, nirvana is still a ways off.
by Des Toups

Hybrids, those fuel-sipping cars that use both gasoline and batteries but never require recharging, seem to make a world of sense as gasoline prices blow past $2 a gallon. They pollute less, they consume less, and they make you feel good. But do they make sense if you’re simply trying to save money? Not yet.

Hybrids are an expensive way to save gasoline. If you spend more on a hybrid car than you'd have spent otherwise, you're unlikely to ever get your money back -- even if you got rid of a gigantic, fuel-sucking SUV. Right now, a cheap compact is a better buy than an expensive hybrid. A couple of things could help tilt the balance for you:

• The IRS has decided that hybrid vehicles qualify for a one-time "Clean Fuels" tax deduction of up to $2,000. If you’re paying the top 35% rate, that’s $700 off your bill. This deduction applies to hybrids bought in 2004 and 2005; it's scheduled to disappear for 2006.
• A number of new hybrids -- sedans, SUVs, even trucks -- are on the way. At least one of the new models is no more costly than its similarly sized, gasoline-powered kin.

The choices

Only a true fuel miser would appreciate Honda's tiny >Insight, A featherweight two-seater with limited cargo space. At about $21,000, it's powered by a tiny, three-cylinder engine with an occasional assist from the batteries, which recharge by reclaiming the energy expended when you slow down or brake. The EPA rates the automatic version at 57 city, 56 highway, but enthusiastic owners report as much as 100 mpg if driven ultra carefully.

Sedan buyers won't get that kind of mileage, of course. The two best sellers are Toyota's Prius and Honda's Civic Hybrid. Both start around $22,000. Honda also makes an Accord Hybrid, which has a unique twist in that the power from its small electric motor is used primarily to boost performance. It's about $30,000.

Both Ford and Toyota have hybrid sport-utilities on the market, and Chevrolet, GMC and Dodge have hybrid pickups on sale or in the works.

Forgo an SUV and save a bundle

Whether or not the purchase of one of these fuel-sipping machines makes financial sense depends on the alternative. You'll save a small fortune if you opt for a hybrid over a larger sedan or sport-utility. Buy that Civic Hybrid instead of a 20-mpg Accord V-6 and you’ll see a savings of $656 a year on $1.50 gasoline, not to mention a few thousand on the purchase price. Commute in the hybrid rather than a 13-mpg sport-utility and you’d save $1,262, not to mention a tankful or two of guilt.

Apples-to-apples comparisons are less kind. A garden-variety Civic LX sedan sells for about $16,500 and returns 31 mpg in the city, 38 on the highway. Using the city mileage figure (which most people would achieve in day-in, day-out driving), you’d spend $725 a year to drive 15,000 miles on $1.50 gasoline. The Civic Hybrid would consume $469 worth, a savings of just $256 a year. (At $2 a gallon, the savings is about $342 a year.)

Without the tax deduction (and recognizing the time value of money), a hybrid owner would never earn back the $4,000-plus premium for his car. Lop $700 off the cost of the hybrid and the picture improves, but it’s still no deal. But every dime increase in the price of gasoline pulls the break-even point closer.

Some states offer incentives that sweeten the deal even further. Oregon, for example, offers dollar-for-dollar credit against state income tax up to $1,500. Maryland offers a break on sales tax. There are little perks, too: Several states allow solo drivers in these hybrid cars to use the carpool lanes, and some cities offer free parking. Check with your local bureaucrats before you buy.

Some alternatives

There are alternatives for both the economy- and ecology-minded. A Volkswagen Jetta TDI, for example, is a diesel-powered sedan that sells for $1,240 more than its gasoline-powered version, yet achieves 50% better economy. Diesel fuel economy is less fragile than that of hybrids; driving style affects them much less. Their gutsy nature is well-suited to trucks and SUVs.

Many more "clean" diesels, built to take advantage of low-sulfur fuel coming in 2006, will show up on car lots soon.

There are many traditional gasoline-powered models that are just as clean as hybrids, achieve good mileage and cost much less. The Consumer Reports-recommended Ford Focus, for example, has an engine that qualifies for Partial Zero-Emission Vehicle status, achieves 27 city/36 highway, and starts at about $13,000 -- $7,000 less than the cheapest hybrid, even before rebates.

Before you shop

It's important that drivers realize that they will have a difficult time matching the advertised fuel economy for these hybrids. Hard acceleration, cut-and-thrust driving and using the air conditioner take an even bigger toll on hybrids' mileage than they do in a regular car. Real-world economy could be as much as a third less; still, 40 mpg is pretty impressive.

Don't ignore the traditional risks behind any car purchase: You're responsible now for maintaining two power sources, not one. Hybrids have proved reliable so far -- these are Hondas and Toyotas, after all -- but their history is limited. Warranties on the hybrid-related systems are eight years, but replacing those systems after the warranty expires could cost thousands. (The battery pack in a Honda is estimated at $3,000.) And resale value is still a big question mark.

So far, resale values for the Insight have been especially disappointing compared with most Hondas. Despite a $4,000-plus difference when new, the price gap between a 2-year-old Insight and a run-of-the-mill, 2-year-old Civic LX sedan is very narrow. That's a big opportunity for hybrid-vehicle fans who don't mind forgoing the tax deduction (which applies only to the original owners) but want to pick up one of these lightweight two-seaters on the cheap.

The Prius, on the other hand, is riding a wave of consumer demand, with new models commanding thousands over sticker and used examples are maintaining their value well. Projected depreciation is less than that of the Camry, for example.

And of course, though you never have to plug one of these babies into your wall socket, there are compromises -- such as less power -- you'd do well to research. You can read more about them at MSN Autos by following the links at left.

Source: moneycentral.msn.com

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CARS FIMRS "BLOCKING GREEN FUEL"

Car makers are not doing enough to develop green alternatives to petrol, an influential government adviser says.

Japanese companies had a better record than European or American ones, Professor Stephen Blythe said.

But the industry had still not grasped the urgency of the problem - despite promoting its green credentials.

A car industry spokesman said the government could do a lot more to encourage the development of alternative fuels such as hydrogen.

"It is not just a question of manufacturers developing the technology. All of the parties involved in future fuel technology must play their part," said Nigel Wannacott, of the Society of Motor Manufacturers and Traders.

Bio-fuel

Mr Wannacott said Japanese manufacturers had led the way on hybrid electric and petrol cars but all major manufacturers were developing hydrogen and bio-fuel engines.

He urged the government to provide incentives and build infrastructure to encourage the take-up of hydrogen, which he said was about 15 to 20 years away.

"I can never see a time when our love affair with the car wanes."
[Nigel Wannacott, society of motor manufacturers and traders]

But Professor Blythe, who is one of the key contributors to the government future transport strategy, claimed it was the manufacturers who were dragging their feet.

"We have had a lot of meetings with car companies, who promote their green credentials - but they say we are not going to do much for the next 20 to 30 years because our customers don't want to pay more.

"Japanese car manufacturers seem to be much more progressive than some of the European or American ones," he said.

Perpetual motion

He was speaking at the launch of a report on the long-term shape of UK transport policy.

The report includes four alternative scenarios of what life might be like in 50 years time to help industry and government plan future transport infrastructure.
The scenarios are:

Perpetual motion - Demand for travel remains strong thanks to continued globalisation and growth. Cars have got faster but more green, air travel still popular but expensive.

Urban colonies - Environment top priority for government. Car use expensive and restricted. Public transport widely used but rural areas lose out.

Tribal trading - Energy crisis has caused mass unemployment. Long distance travel a luxury few can afford. World has shrunk to local communities for most people.

Good intentions - Tough government measures restrict carbon emissions. Traffic volumes have fallen but the market has failed to provide new energy sources.

Asked which of the scenarios would appeal to car manufacturers, Professor Blythe said: "I suspect they would not favour any of them."

Road pricing

He said the way people used their cars would have to change over time to make it a more "efficient" form of transport.

Road pricing schemes, electronic networks to help people plan journeys better or even replacing private car ownership with public cars-on-demand schemes could all play a part, he added.

Mr Wannacott said the car industry backed "smarter use of cars and commercial vehicles", which would free roads from congestion.

But he added: "I can never see a time when our love affair with the car wanes.
"There will always be an element of glamour: you are safe, you are free to go where you choose, you are not restricted to doing things the way somebody else wants you to do them. It is about personal freedom."

Source:bbc.co.uk

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