As the first Toyota Priuses took to U.S. roads more than a decade ago and celebrities such as Leonardo DiCaprio and Cameron Diaz touted their virtues, enthusiasts predicted that hybrid cars would quickly become mainstream.
But there was a problem: They cost too much, and consumers spurned them. Last year, the vehicles represented less than 3 percent of cars and light trucks sold in the United States.
(Jonathan Alcorn/ BLOOMBERG ) - The 2012 Infiniti M35 Hybrid is unveiled Nov. 18 at the 2010 LA Auto Show in Los Angeles.
Now the Obama administration is deciding how much to push U.S. drivers into fuel-efficient cars.
Over the next few months, regulators are scheduled to set the next round of U.S. fuel economy standards for manufacturers. Among the proposals under consideration is one that would lift average fuel economy under the law to as much as 62 mpg by 2025.
The preeminent issue in the debate is how much the price of cars — gas, hybrids, plug-ins or whatever inventors come up with— would rise if regulations dictate such standards.
On one side are automakers, which warn that the highest targets could add as much as $10,000 to the price of a new car, devastating a U.S. industry that just two years ago was bailed out by the government.
Sales could plummet by 25 percent, they say, and 220,000 auto manufacturing jobs could be lost.
Regulators “need to ensure that their standards do not result in vehicles that consumers cannot afford,” the Alliance of Automobile Manufacturers, a trade group, warned in a letter this week to officials.
On the other side are environmentalists, who dismiss the automakers’ cost estimates as bloated and argue that the costs of investing in fuel efficiency are tiny compared with the effects of global warming and dependence on foreign oil. The proposal to raise the standard to 62 mpg, which would translate into “real world” average efficiency of about 45 mpg, is also backed by 17 U.S. senators, who last month issued a letter of support for a “maximum feasible” standard.
“The cost of investing in clean car technology will be vastly outweighed by the billions saved averting the dangers of global warming,” said Roland Hwang, transportation director for the Natural Resources Defense Council.
Environmental groups argue that the additional costs can be minimized with innovation. The added cost of purchasing a hybrid has been estimated to be between $3,000 and $5,000. But the groups point to a breakthrough in new hybrid systems that arrived in U.S. markets this year, which some industry experts said cuts costs of Prius-like hybrid systems by as much as a third.
This technology “is the biggest piece of the solution for hybrids,” said John German, a senior fellow at the International Council on Clean Transportation and the author of a book on hybrid cars. “It’s a quantum leap in cost reduction.”
The so-called “P2” systems have been installed this year in the Volkswagen Touareg, Infiniti M35 and Hyundai Sonata hybrids and are expected to become widespread if they prove successful.
Unlike the hybrid system in the Prius, which has two motors and two inverters for converting from DC battery power to AC motor power, the new Touareg has one motor and one inverter, which saves money. The Touareg hybrid improves fuel efficiency by 20 percent or more.
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