Image: Ford Escape Hybrid
Ford via AP
The Ford Escape Hybrid, launched in 2004, was just the fourth hybrid vehicle offered in the United States.
By Roland Jones Business news editor
msnbc.com
updated 2/13/2008 1:58:39 PM ET 2008-02-13T18:58:39

There’s a flood of new, large sport utility vehicles hitting the road, but they’re not the gas guzzlers that might immediately spring to mind.

The latest fad in hulking SUVs is fuel economy, and that’s why you’ll soon be driving trucks with names like the Chevy Tahoe, Cadillac Escalade or GMC Sierra with the coveted “hybrid” suffix, showing that the terms fuel economy and SUV aren’t mutually exclusive.

Whether they need space for large families or luggage or just prefer truck-based vehicles over minivans and station wagons, U.S. consumers are still interested in buying large SUVs.

“It’s hard to change Americans’ buying preferences and say we all have to drive smaller vehicles," said Rebecca Lindland, an auto analyst at Global Insight. "It’s much easier to put hybrid technology in these larger vehicles and say you can keep your larger vehicle, but buy a hybrid for more, and you get better fuel economy."

Americans are voting with their feet when it comes to hybrid vehicles.

“While the overall vehicle market is declining, sales of hybrids are growing, and we’re seeing a lot of activity in the SUV segment,” said Bradley Berman, editor of the Web site HybridCars.com. “Virtually every hybrid announcement in the last two years has been about SUVs, and so you can see there’s a trend here, and old notions about SUVs and hybrids being distinct are being thrown out.”

Toyota Highlander’s hybrid SUV and the Ford Escape Hybrid ranked among the top 20 best-selling vehicles last month, with the Highlander hybrid ranking above the Ford Focus and Toyota Prius.

The Ford Escape Hybrid, launched in 2004, was the first hybrid SUV, and has been followed by hybrid versions of the Mercury Mariner, Toyota Highlander Hybrid and Chevrolet Tahoe.

The move to hybridize gas hogs is a necessary one. Energy legislation signed by President Bush last year requires automakers to increase fleetwide fuel-efficiency levels to 35 miles per gallon by 2020.

Automakers need to get working on solutions now, notes Global Insight’s Lindland. The year 2020 may seem like a long way off, but it’s actually just two full model cycles away, as it takes automakers five to seven years to complete development of a new model.

Right now, the fuel savings look significant. Tom Appel, managing editor of Consumer Guide Automotive, notes that you get far higher fuel savings by putting a hybrid drive train in a large SUV vs. a smaller sedan.

Driving a Honda Civic hybrid for 1,000 miles saves you 16 gallons of fuel over driving a regular, non-hybrid base Civic model the same distance. But driving a Chevy Tahoe Hybrid saves 23 gallons of fuel on the same 1,000-mile drive in city traffic over driving the non-hybrid version.

“Here’s the answer to anyone who asks why you should bother putting hybrid technology in a large SUV,” Appel said. “It’s still more fuel-efficient to use a smaller car, but the fuel savings is far greater when you add a hybrid drive train to a gas-thirsty vehicle, and so the reduction in fuel use means it makes much more sense to hybridize a large vehicle than a compact.”

While hybrids may offer gas savings, they usually cost more. A Toyota Highlander can cost $27,300 for the base model, while the Highlander Hybrid can cost from $31,978 to $37,704, according to automotive research site Edmunds.com.

“My issue historically with hybrids is it would cost you thousands of dollars more to buy one over the regular model and take years to pay that off in terms of the fuel you’d save,” said Global Insight’s Lindland. “So a hybrid doesn’t make a lot of economic sense to me, but [the automakers] have been able to moderate the prices of hybrids so they are starting to make more economic sense.”

Another issue for consumers is performance, notes Consumer Guide Automotive’s Appel. While towing capacity can be reduced, Appel notes that in some cases their performance has been enhanced.

“The ‘two-mode’ hybrid system used in the Chevy Tahoe and Silverado gives an immediate torque from its electric motors when starting a vehicle from a stationary position, so you get going more quickly,” he said.

HybridCars.com’s Berman thinks the hybrid market will continue to grow and the technology will continue to proliferate through the full range of vehicles now on offer. Aside from the Chevy Silverado and the recently announced GMC Sierra Hybrid, one untapped area for hybrids is pickup trucks, he added.

“Pickups sell in large numbers so I’m surprised,” he said. “I think it’s a missed opportunity,”
A truck like the F-150, the nation’s best-selling vehicle, if it were to be produced in significant numbers as a hybrid could help an automaker like Ford take control of the hybrid market, Berman continued.

“When you look at the Highlander and the Camry, there’s a fairly large take rate for the hybrid version,” he said. “When Americans think of pickups they still think of American brands, so pickup buyers are intensely loyal to American brands.”

Reuters contributed to this report.

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