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Can hybrids save US from foreign oil?

Red-hot demand for Priuses causes doubters to take second look.

(Page 2 of 2)



"We're going to have many, many choices," says Ron Cogan, editor and publisher of Green Car Journal, a monthly magazine devoted to energy-efficient and environmentally friendlier cars. "Hybrids are here right now. They're quite clearly the next big thing. To look off into the future for hydrogen is not giving enough credit to what we have here and now."

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Nissan plans to offer a hybrid version of its popular Altima model using Toyota technology next year. Even GM says it will soon offer "mild hybrid" technology that stops a car's motor while stuck in traffic - and automatically restarts it. At least 17 hybrid-electric models will be available in the US market by 2006 with 38 forecast by 2011, market research company J.D. Power and Associates reported in February.

Even so, the company is not bullish about hybrids. "Despite the significant growth in the number of models and annual sales over the next five years, we anticipate hybrid market share to reach a plateau of about 3 percent near the end of the decade," writes Anthony Pratt, a senior manager at J.D. Power, in the report.

Conventional wisdom holds that the long-expected growth of hybrids will be slow. Skeptics abound.

"They make a nice story, but they're not a good business story yet because the value is lower than the cost," said Carlos Ghosn, chief executive of Nissan Motor Co., at the National Automobile Dealers Association convention in New Orleans in January.

Even McManus - the hybrid cynic-turned-believer - has serious doubts about how big an impact even a massive surge in hybrid sales will have on reducing America's oil dependence. His analysis, for instance, shows a "rebound effect." For every 1 percent decline in the cost of fuel, Americans drive 1.85 percent more.

Another factor working against hybrids' overall impact on cutting oil imports is the rising number of vehicles on American roads. The fleet grows about 1 percent a year. "I can't imagine a circumstance where we can reduce it enough to cut a significant portion of what we get from over there," McManus says.

Nevertheless, with gasoline prices at more than $2 a gallon, Detroit auto executives seem to be changing tack. Hybrids could be everywhere in the future, if hybrid is defined broadly as any vehicle that uses more than one method of providing power to the tires, some say.

"If you think about the 15- to 20-year time frame, you could argue that all vehicles are going to be hybrids," Michael Tamor, manager of Ford Motor Co.'s Sustainable Mobility Technologies, reportedly told a conference of the Society of Automotive Engineers' in February. Meanwhile, the head of GM, Robert Wagoner, has recently said hybrids are important after all. The company is said to be seeking access to Toyota's hybrid technology.

"All we've been hearing for 15 years is that consumers don't care about fuel efficiency, that they care more about cupholders than fuel economy," says Bradley Berman, editor and publisher of Hybridcars.com. "I would say that fuel economy is the new cupholder."

If hybrids do indeed become the "next big thing," with a bigger impact on US oil consumption than is still today widely believed, it probably won't be because of eco-celebrities like Ms. Diaz, but because of a shift by masses of ordinary Americans, Mr. Cogan says.

Unlike Diaz, who has her own environmental show on television, Mr. Jefferson, is an avowed Republican who doesn't at all mind drilling for more oil in Alaska's wildlife refuge. Still, three years ago he decided he wanted something different in a car. And he liked the idea of cutting pollution a bit - and helping the US rely less on foreign oil, too. So he bought a Toyota Prius.

What does he think of hybrids? Are they the next big thing that will help America get free from imported oil? "I'm no scientist," he says. "But I wouldn't bet against it."

• Second article in an occasional series. Part 1 appeared May 5.

America drives

It's a love affair that has lasted decades and makes it hard for Americans to curb their driving, even when gasoline prices soar. Nevertheless, two oil crises and improved technology have had an impact. For example:

• In 1975, the car with the lowest fuel efficiency was General Motors' Toronado, with a combined city/highway rating of 8.4 miles per gallon. By 2004, American-made cars were more efficient, leaving the Lamborghini L147 at the bottom rung with 10.6 m.p.g.

• The most fuel-efficient cars belonged to the Japanese in 1975. The Honda Civic CVCC got a combined 28.3 m.p.g. After several years in which Volkswagen and General Motors prevailed, top honors returned to Honda. In 2004, its hybrid Insight got 62.6 m.p.g.

• In 1970, before the first oil crisis, the average passenger car used 737 gallons of gas a year. After dropping to 506 in 1990, the average climbed back to 550 gallons in 2003.

Sources: US EPA; Bureau of Transportation Statistics

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