Hybrid Vehicles
The Hottest Hybrid Vehicles for 2008

By Jim Gorzelany
January 23, 2009

U.S. hybrid sales jumped more than 34 percent last year
Income tax credit for buyers of hybrid vehicles can be as much as $3,000
on a vehicle like the Mercury Mariner Hybrid.

Hybrids are still niche vehicles, but at their current rate of growth, they
could dominate the roads in another five or 10 years.

U.S. hybrid sales jumped more than 34 percent to a total of 338,851 in 2007,
according to CNW Marketing Research in Bandon, Ore. The only other vehicle
segment that grew faster than hybrids in 2007 was what CNW calls “budget cars.”
Sales of these small, inexpensive models, which include the Chevrolet Aveo,
Honda Fit, and Toyota Yaris, grew at an astonishing rate of nearly 48 percent.
With rising gas prices and higher fuel economy standards mandated by the federal
government, analysts expect hybrid technology to proliferate in the coming
years. “You’re going to see wider availability of hybrid powertrains as options
on more and more vehicles,” says David Wurster, president of the Bloomfield
Hills, Mich.-based market research firm Vincentric. “I don’t think they’re going
to be the ‘unique’ vehicles for much longer because it’s going to become
commonplace technology.”

With new models entering the market and their popularity expected to rise, CNW
predicts that 1.1 million hybrids will be sold annually by 2010.

Though their numbers continue to swell, hybrids still carry a premium for the
added hardware, usually electric motors and a battery pack, estimated on average
to be $3,000 over the cost of their conventionally powered equivalents. But
unless this figure drops dramatically or gas prices take another large leap,
some feel the price differential will continue to be a barrier to hybrids'

widespread acceptance. “It comes down to the old adage that there’s no free
lunch,” says John Wolkonowicz, a senior market analyst with Global Insight in
Detroit. “You can build vehicles that get better fuel economy and with reduced
emissions, but there’s a cost connected to all that.”

To help soften the financial blow and spur sales, the federal government
provides an income tax credit for buyers of hybrid vehicles. This credit can be
as much as $3,000 on a vehicle like the Ford Escape Hybrid or Mercury Mariner
Hybrid. However, these credits are phased out once an automaker sells 60,000
hybrid vehicles.

The tax credits have already expired for Toyota and Lexus models and are in the
process of being phased out for the Honda Civic Hybrid. The Civic Hybrid’s
credit was cut in half to $1,050 on January 1, and will be reduced to $525 after
July 1. Hybrid vehicles from automakers that haven’t met the sales quota will
continue to qualify for a full tax credit through 2008. Currently, this includes
the Ford Escape Hybrid and Mercury Mariner Hybrid. More from

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The lack of tax incentives doesn’t seem to have hurt the Toyota Prius’
popularity, however, with 181,221 units sold in 2007 for an increase of nearly
70 percent over 2006, according to CNW. The Prius remains the most popular
hybrid in the U.S. by an astronomical margin. The second most sold hybrid in
2007 was another Toyota, the Camry hybrid, at 54,492 units.

This year, hybrid powertrains are being fitted into some of the most unlikely
vehicles: full-size SUVs. The Chevrolet Tahoe Hybrid and GMC Yukon Hybrid are
now available, and hybrid versions of the Cadillac Escalade, Chrysler Aspen, and
Dodge Durango go on sale late in 2008 as 2009 models.

“This is probably one of the toughest market segments to break through with a
hybrid,” says Lonnie Miller, director of industry analysis at market research
firm R.L. Polk and Company in Southfield, Mich. “We don’t understand what’s
driving GM’s decision to build them, but it’s a very good litmus test for the
broad-based acceptance of hybrids if the pickup buyers really take to it.”
General Motors, which produces the Escalade, Tahoe, and Yukon hybrids, is also
launching hybrid versions of its full-size pickup trucks, the Chevrolet
Silverado and GMC Sierra, in the fall. Both were sold in “mild-hybrid” versions
in 2005 and 2006. They're called "mild hybrids" because they didn’t include an
electric motor to help with propulsion and simply used a revised starter system
to shut down the gasoline engine when idling. This saved an average of just one mpg.

The new hybrid SUVs and pickups will use a complex “two-mode” hybrid system that
was co-developed by General Motors, BMW, and the former DaimlerChrysler. GM
expects a 25 percent boost in combined city/highway fuel economy over the
gasoline-powered versions, which amounts to about a 4-mpg improvement.
A short test drive of the Chevrolet Tahoe Hybrid left us intrigued. The burly
truck basically drives like a Prius around town, using only its electric motor
at low speeds, but it can still haul and tow heavy loads thanks to its potent V8
gasoline engine.

The same two-mode hybrid technology used in the Tahoe and Yukon hybrids will be
mated with a smaller engine (a V6 instead of a V8) in a smaller vehicle, the
2009 Saturn Vue Green Line. A Vue Green Line is already on sale, but includes a
mild hybrid system with an electric motor and battery pack that gives limited
assistance to a four-cylinder gasoline engine. The same powertrain is used on
the 2008 Chevrolet Malibu Hybrid and Saturn Aura Green Line.

Other new hybrids on the horizon include versions of the midsize Ford Fusion and
Mercury Milan sedans, the compact Hyundai Accent and Kia Rio, and even two new
Honda hybrids. Also look for the flagship Mercedes-Benz S-Class sedan, the
diminutive Smart, and the Audi Q7, Porsche Cayenne, and Volkswagen Touareg SUVs
to get the hybrid treatment by the end of the decade. Porsche also has announced
a hybrid version of its new high-performance sedan, slated to go on sale in a
few years.

GM hopes to start selling the first mass-produced plug-in hybrid by 2010, as
either the Saturn Vue Green Line with plug-in capability, or the futuristically
styled Chevrolet Volt. The Volt, in particular, has the potential to achieve
triple-digit fuel economy as it will run solely on electricity and use a small
gasoline engine as a generator of sorts to recharge the battery on the fly. GM
anticipates a 40-mile range on electricity alone and says that its batteries can
be recharged by plugging them into a regular household electric outlet.

The only catch is that the Volt requires advanced lithium-ion batteries (like
those in cell phones and laptop computers, only much larger) that have yet to be
fully developed for automotive use. The biggest issue is that they can overheat
and cause a meltdown.

Still, if Chevrolet can deliver on its promises and sell the Volt for less than
$30,000, there’s little doubt it will be a true breakthrough. “If the technology
is there, the Chevy Volt could be the next big thing,” Wurster says.

Our list of Hottest Hybrids (see the “slide show” link above) includes a rundown
of all hybrid vehicles newly introduced in 2008.


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