Expansionary Institute

Michael Zey
futurist3000@aol.com

 
NEW YORK(Reuters) - James Crowley relishes two things about driving his new high-tech hybrid car, the odd stares and the thumbs up signs he receives from other drivers.

If sales records in the United States are an indication, people like Crowley may be driving a revolution that will soon begin to change the nation's driving fleet, including gas-guzzling sports utility vehicles (SUVs), to high-mileage, low-pollution autos.

Crowley, an executive at a Cambridge, Mass. computer company, drives a Honda Insight, one of two makes of hybrid cars -- autos that run on both gasoline and electricity -- sold in the United States.

The U.S. hybrid market is small, with dealers selling just thousands per year compared to millions of conventional cars.

But hybrids are competitive in speed and cost to regular cars. Drivers interviewed by Reuters said they easily cruise at 80 miles per hour as long as they are not ascending a steep hill.

At the moment, hybrids cost about $3,000 more than conventional autos, an initial pain that can be eased by tax breaks in many states, and eventually overcome through their superior mileage.

Unlike purely electric cars, hybrid vehicles or HEVs, do not need to be plugged in, which means they are not juiced up by a power plant that likely burns fossil fuels and pollutes the air. Instead, the batteries recharge on energy released when the driver hits the brake, energy usually lost as excess heat.

Batteries power low speeds, and the gasoline engine kicks in on the highway. The dual system nearly doubles the mileage of conventional cars. And HEVs get better mileage in the city, where drivers brake more.

Honda Motor Co. Ltd's two-seater Insight averages about 65 miles ( per gallon while Toyota Motor Corp's

four-seater Prius -- the other hybrid sold in the United States -- averages about 50 miles to the gallon.

Both models sell for about $20,000, which in the Toyota Prius' case, is roughly $3,000 to $4,000 more than comparable models with conventional engines.

Besides the state tax breaks, President George W. Bush's energy plan proposed billions in tax credits to spur the sale of hybrids and fuel-cell vehicles.

Car companies also pay up for hybrids.

"We're trying to help the environment but we're also a business as well," said Ed LaRoque, Toyota's national advanced technology manager, adding without details that the company was very close to breaking even on hybrids.

"There have been a lot of horror stories on how we're taking huge losses," he said. "We're not."

HOT OFF THE LOT

Hybrid sales make up a tiny percentage of the roughly 15  million annual U.S. auto market, but their sales are limited to the number of cars allotted with some customers reporting waiting times of up to five months.

Both Toyota and Honda say they are selling HEVs at a rate that exceeds the number they have planned to import and sell over the year.

In the United States so far this year, Toyota has sold 8,400 of its Prius, at a rate well above its 12,000 allotment for the year from Japan. Honda has sold nearly 3,000 Insights, a rate on target for its 6,500 allotment.

Steady demand for Prius means there's an average waiting time of three months, Toyota officials said.

Next year, Honda will fit an as yet undetermined number of its second best selling car, the Civic with hybrid technology.

And Toyota's President Fujio Cho said his company plans to make 300,000 hybrid cars worldwide by 2005.

Car companies worldwide are soon to jump in the race, including converting the quintessential American car in the last decade, the SUV.

In 2003, Ford Motor Co.will make hybrid SUV Escapes, while DaimlerChrysler will make up to 30,000 hybrid Dodge Durangos.

Both Toyota and Honda said making hybrids eases the path to the opening of hydrogen age, when cars are expected to run on hydrogen fuel cells.    

"We believe a lot of the hard work being done now is going said to pay off for successful fuel cell vehicles for the future," said LaRocque, adding that Toyota hopes to make fuel cell cars by the end of the decade.

AVOIDING THE PINCH AT THE PUMP

All this is good news for customers wanting to avoid stubbornly high prices of petroleum age.

Honda's Bynoe said Insight sales shot up 137 percent in May when threadbare U.S. gasoline stocks pumped the fuel to record highs of over $1.70 per gallon. Gasoline has fallen about thirty cents as stocks have recovered, but HEVs sales are still high.

Besides gasoline savings, drivers also like HEVs because they use less resources and cut emissions.

"I think the car makes a philosophical statement," said Crowley. "I especially love that when I'm driving next to an SUV." He also likes the modern design and enclosed rear wheels, designed to reduce wind drag. "My wife and I call our Insight the space monkey," he said.

Meanwhile, salesmen wish there were more hybrids on their lots.

"We've sold all we got," said Murray Malise a Honda salesman at a dealership in southern Manhattan. "They didn't make enough."

14:12 08-19-01

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