More Hybrid Cars to Hit the Road in 2004

Oct. 1, 2003 -- Kim Moy is no eco-warrior, but ask her about the kind of car she drives and she'll rave over a super fuel-efficient gasoline/electric hybrid usually associated with green-minded conservationists.

"I'm not a huge environmental person [but] I just love it," says Moy, who drives her 2003 Toyota Prius 45 minutes daily to her job as a program manager at America Online in Dulles, Va.

And with the price of gas rising above the $2 per gallon mark in her area, she's happy to get about 40 miles to the gallon. "Whenever I hear stories about people with their SUVs and stuff about how much they pay to fill up, I go, 'What are they thinking?' It's a kick to me how much gas mileage I'm getting, and a reminder that I made the right choice," she says.

Converts like Moy are just the tip of the iceberg for hybrid auto makers.

Already, according to research firm J.D. Power & Associates, there are roughly 54,000 hybrid cars being driven by consumers in the United States. And with car companies like Toyota starting next year to push even more vehicles based on the technology, the estimate goes up to 500,000 hybrids by the end of 2008. By 2013, more than 870,000 consumers are expected to be driving hybrids vehicles of all types.

What's making the United States an ideal climate for broadening the market for such vehicles? Car makers say its the recent spike in gas prices.

"The public that are buying cars and trucks want to see less dependency on foreign oil," says Ed LaRocque, national advanced technology vehicle manager for Toyota North America. "The combination of rising price of [U.S.] domestic oil and more awareness of the environment is also helping push awareness of hybrids."

Growing Fleet of Fuel-Savers

With that kind of promise, automakers are already beginning to prime the pump. In 2004, consumers will have no fewer than seven additional choices for hybrid-powered vehicle.

Ford, for example, plans to release a long-anticipated hybrid-powered version of its popular Escape SUV. General Motors is working on similar concepts using the Vue SUV from its Saturn unit, as well as a gas-electric version of the GMC Sierra pickup truck.

Not to be outdone, both Toyota and Honda will have updated versions of their respective Prius and Civic hybrids. In addition, Toyota may also introduce next year its own fuel-efficient version of its Lexus RX 330 SUV.

To see to it that its Prius does meet the needs of a more mainstream market, Toyota has made extensive modifications — many of which were suggested by the more than 55,000 owners of earlier versions.

For example, Toyota's second generation hybrid engine system called "hybrid synergy drive" gives a much needed performance boost.

The new Prius, says LaRocque, now takes just 10 seconds to go from zero to 60 miles per hour — about two seconds less than previous models. What's more, according to the Environmental Protection Agency the new Toyota hybrid will get even more impressive mileage — an estimated 61 miles per gallon in city driving and 50 miles per gallon during steady high-speed highway cruising.

Fighting the Space Race

One consumer concern the car makers are trying to address: space.

Smaller, more powerful rechargeable batteries, for example, allowed designers to change the interior layout and exterior shape of the new Prius. Now a five-door hatchback with folding rear seats, the new Prius has 6 inches more interior room while stretching only 3 inches longer overall than older versions.

"The new '04 Prius is a very functional platform and [now] close to the performance of the Camry, a number one selling car for Toyota," says LaRocque. "We believe that with the '04 Prius, we're now ready to transition [hybrids]… to the mass market."

Indeed, car enthusiasts seemed to agree with that assessment of model's readiness for market after some of them saw and had limited test drives of the new hybrid, due to appear in Toyota dealerships worldwide by mid-October.

"The new Prius is very impressive, much more agile and sporty," says David Champion, director of automobile testing for Consumer Reports magazine. "In the initial drive, it seems much more of a car that's easier to live with."

Charlie Vogelheim, executive editor for Kelley Blue Book, came away with similar opinions after a brief tryout with the car. "U.S. buyers like power," says Vogelheim. "I was duly impressed with the power in the Toyota."

"I think there is a market for [this car]," he adds. "We are talking at a time when gas prices are at an all-time high. Certainly there's a lot of talk about [hybrids]."

After the Heart of Americans

But U.S. consumers also have an inexplicable fascination for size — especially for big trucks and SUVs, reminds Vogelheim. And that's where American companies such as Ford and GM believe they have an edge over their Japanese rivals.

"Our goal is to produce the first no-compromise hybrid," says Angela Coletti, a Ford Motors spokesperson. "We chose an SUV [platform] because that's where we see demand headed."

The Ford Escape HEV is still undergoing testing among the company's engineers, who are secretive about performance specifications. But Coletti says the hybrid SUV will have towing and off-road capabilities that Americans demand while offering much improved mileage over conventional Escape models.

And despite minor, early flaws, Coletti says the Escape HEV is functioning as expected and on target for general U.S. sales late next summer.

"There's nothing standing in the way of delivering the product as expected," says Coletti. "We definitely feel there is a strong market demand, and we're very excited about the launch of this vehicle."

Open Minds, Closed Wallets?

But will consumers really buy into the hybrid philosophy? Not many in the industry are convinced the potential gains and benefits of hybrids cars will overcome one big sticking point: price.

Hybrids such as the Toyota Prius still carry a roughly $5,000 premium over conventionally-powered, fuel-efficient cars of the same size and features, says Consumer Reports' Champion.

"The annual fuel costs for a Honda Civic Hybrid is about $415 versus $625 for a standard Civic," says Champion. Even if gas prices remain above $2 per gallon, it would take more than 15 years before consumers would pay back the difference of going green, he says.

Certainly incentives may help, such as the $2,000 federal consumer credit that was signed into the tax code last year by President Bush. But ultimately consumers will vote with their wallets.

"In an economy that isn't going so well, people want most of their money," says Champion. "I think for fuel-efficient vehicles to catch on in a big way here in the U.S., it has to be financially advantageous for people to buy into different technology such as hybrids."

ABCNEWS' Technology Producer, Paul Eng, happily gets about 40 miles per gallon in his silver 2001 Toyota Prius.