Image: A Chevrolet Volt electric hybrid vehicle
Ethan Miller  /  Getty Images
The next major development in the hybrid space is expected in 2010, when GM’s Chevy Volt, a plug-in hybrid electric vehicle, is expected to go into production. The vehicle can charge off a common household outlet. 
By Roland Jones Business news editor
msnbc.com
updated 6/20/2008 4:07:46 PM ET 2008-06-20T20:07:46

Time was when hybrid gas-electric vehicles appealed only to the greenest car consumers more concerned about saving the environment than saving on gasoline bills. Gas prices hitting $4 a gallon have changed all that.

Now there’s an out-and-out stampede to buy hybrid vehicles, as drivers downscale from large SUVs to smaller, more fuel-efficient cars. Popular models like the Honda Civic Hybrid are in short supply, and dealers are reporting waiting lists.

Toyota, maker of the popular Prius, is struggling to keep up with booming demand. The Japanese automaker said this week it’s unable to make enough batteries to supply demand for the hybrids, and the crunch on battery production is likely to remain a problem for the rest of the year.

It’s clear that for many consumers hybrids have gone from an eco-friendly fad to a virtual  necessity. Now the issue for many drivers is whether they should jump on the hybrid bandwagon now or wait for some of the new hybrid models expected to arrive in showrooms over the next few years.

One issue is that, even though gas prices are at record levels, hybrids are priced at a significant premium over similar, conventional models. Depending on how much you drive, it could take years to make up the extra cost with savings at the pump. (See our “Hybrid payback” interactive above for information on the payback of some of the most popular hybrids currently available.)

“A lot people are freaked out by high gas prices right now, and they’re making panicked decisions that impact their finances, so it’s probably not the best time to get into a hybrid car,” said Phil Reed, consumer advice editor at automobile information Web site Edmunds.com.

“We are still in a plateau in terms of hybrid development and there’s nothing very new out there, and what’s available right now is high-priced,” Reed said. “The entire automotive industry is reshaping itself, so if you have a car that you can keep for a few more years it might be a good time to relax and wait for some of the good things that are about to come out."

The next major development in the hybrid space is expected in 2010, when GM’s Chevy Volt, a plug-in hybrid electric vehicle, is expected to go into production, says Aaron Bragman, an automotive analyst at consultancy Global Insight.

The Volt, which can be recharged from a home electrical outlet, is expected to go on sale in early 2011 and may be worth waiting for, said Bragman.

“It represents a big change in what vehicles are,” he said.

The Volt, he noted, is designed to remain primarily in electric mode in first 40 miles of driving.

“Considering that most Americans have a 20 mile commute it’s feasible that you’d never use your gas engine,” Bragman said.

Toyota plans to introduce a plug-in hybrid in Japan, the United States and Europe by 2010, although it will target leasing customers first. The new vehicle will use next-generation lithium-ion batteries that are seen as key to jump-starting the hybrid market. They are currently used in laptops and produce more power than the nickel-metal hydride batteries used in existing hybrids.

Toyota is expected to upgrade the Prius sedan for 2009, and Japanese rivals Honda and Nissan also are stepping up their hybrid programs. Nissan is expected to launch a new hybrid by 2010, while Honda plans a lineup of new hybrids by 2015, including a redesigned Civic hybrid, a hybrid version of the Fit subcompact and a hybrid based on the sporty CR-Z. Honda also plans to challenge the dominance of the Toyota Prius with a dedicated hybrid model due for release next year.

The slate of hybrid offerings from U.S. automakers looks less full. Updated versions of existing hybrids are expected, and Ford is due to offer hybrid versions of the 2009 Fusion and Mercury Milan sedans, Bragman said.

“There’s not a whole lot coming for Ford and Chrysler on the hybrid front, but Ford does have some small, fuel-efficient European cars that could sell well over here,” said Edmunds.com’s Reed. “Chrysler really hasn’t charted a new course in this area, and in terms of fuel efficiency seems to not have a clue about what to do other than offer gas cards.”

GM’s hybrid plans are more extensive. The Chevy Malibu, the Saturn Aura and Vue Green Line use the automaker’s “mild” hybrid technology, the BAS, or belt alternator starter system, which is less complex than most other hybrids on the market. Unlike more intricate hybrids like the Toyota Prius these cars’ electric motors cannot drive the wheels on their own, but they but still save significantly on gas.

“These systems are considerably less expensive than the Japanese hybrid systems,” Bragman said. “GM is thinking of adding the system to just about any car globally.”

If you’re dead set on buying a hybrid right now there’s a deal to be had on GM’s Chevy Tahoe Hybrid and the hybrid GMC Yukon hybrid — the industry’s first big hybrid sport utility vehicles, noted Bragman.

With sales of SUVs tumbling, GM is offering cash incentives of as much as $4,000 on the hybrid Tahoes and Yukons, which before the incentives were offered sold for about $50,000, about $20,000 more than the conventional versions — a premium that put off many customers.

“These vehicles are remarkable, but the problem is the stigma” associated with large SUVs, Bragman said. “People don’t want to be viewed so conspicuously in a big SUV.”

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