Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers


Hybrids Are Headed for Main Street

No matter what Congress might mandate as newer, tougher fuel-economy standards, the course Detroit will steer to get there is already clear. So-called hybrid cars, which combine a conventional gasoline engine with a battery-powered electric motor, are on the verge of going mainstream.

Until now, hybrids have been the playthings of a handful of technology and environmental zealots. They're pretty much custom-built cars. Be it Honda Motor Co.'s (HMC) swooshy two-seat Insight or Toyota Motor Corp.'s (TM) funky Prius, they're designed as technology showcases with eye-popping mileage: 68 miles per gallon on the highway for the Insight, while the Prius does its best, 52 mpg, in city driving. Although fewer than 20,000 have been sold in the year and a half that they have been on the market, demand picked up as gas prices rose this spring, and the Prius is sold out through the end of the 2001 model year.

GREAT EXPECTATIONS. Now, the race for the average consumer is on. On June 25, Honda said that next March it will drop its hybrid powertrain into its Civic compact. "This is going to be huge," says Thad Malesh, director of alternate-power technology for market researcher J.D. Power & Associates. "Ultimately, the hybrid engine will be nothing more than another engine option." Malesh says that once the manufacturers start putting hybrids in popular models, by 2003 or so, hundreds of thousands will be sold in the first five years.

Detroit isn't far behind. Its first hybrid will come out in 2003, a version of the Escape sport-utility vehicle that Ford Motor Co. (F) promises will get 40 mpg in the city, up from the current 23 mpg. DaimlerChrysler (DCX) will offer a hybrid Durango SUV that year, too. General Motors Corp. will follow in 2004 with a simple hybrid powertrain in its big pickups, the Chevrolet Silverado and GMC Sierra, and a more powerful version for such midsize cars as the Chevy Malibu and Buick Rendezvous.

Even if going green will get easier, it won't be cheap. The premium on the sticker? Anyone's guess, but maybe $1,500 to $3,000, analysts say. For that, though, buyers will likely get a performance bonus as well: Because electric motors give out a lot of low-end power, a hybrid four-cylinder engine often accelerates as well as a conventional V6.

Hybrids work in various ways. In its purest form, a hybrid vehicle's electric motor is directly connected to the wheels. In some cars, such as the Toyota Prius, the electric motor can drive the car on its own at low speeds if the battery is fully charged. In others, such as Honda's Insight, the battery-driven motor acts more like a supercharger, adding bursts of power to mimic a much larger engine when accelerating from a standstill.

But there are also "mild" or "soft" hybrids, nicknamed "mybrids." GM is planning one as an option on its full-size pickups. Chrysler has a similar system in the works for its Dodge Ram, and Ford will offer it on the Explorer SUV.

With a bigger battery and electric motor, a mild hybrid takes some of the load off the gasoline engine. Typically, the electric motor will take over the starter motor, power steering, and heating and air-conditioning--all functions that now drain power from the engine. "You get lower emissions and better fuel economy," says Bruce Harrison, an analyst at market researcher DRI-WEFA.

Still, the fuel-economy gains are modest--maybe 15%, vs. 30% or more for a true hybrid. But these hybrid wannabes cost a lot less to build, resulting in as little as $500 to $1,000 more on the sticker. The attractive pricing, along with a feel-good green image, may lure enough buyers to let Detroit squeak by any tougher fuel-economy rules. For a little while longer, at least. By Larry Armstrong in Los Angeles

blog comments powered by Disqus