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Hybrid Cars Driven By Rising Oil Prices
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Written by Mark C. Hammond   
Tuesday, 14 July 2009
As gas guzzling becomes punishingly expensive, US drivers are saving money with petrol electric hybrids

SOARING oil prices spell gloom for car makers. Motorists faced with price hikes at the filling station economise by keeping their cars longer, and this means fewer new car sales. But there is one type of car that's bucking the trend. As fuel prices reach the dizzy heights of 50 cents per litre in many parts of the US, the makers of petrol electric "hybrid" cars are cashing in.

Hybrids typically consume half as much fuel as their petrol only equivalents, and sales of hybrids for the first half of this year have already exceeded the figures for the whole of 2003. Honda has been selling hybrid cars since the end of 1999, and Toyota since 2000. They were launched largely in response to California's plans to promote low emission cars and to discourage more polluting models.

The two companies have different approaches to the use of hybrid power. Both use a petrol engine to drive the wheels, as in a normal car, and also to generate electricity to charge a large battery that feeds an electric motor. But Honda's cars have a relatively small, 10 kilowatt electric motor that assists the engine when there is high power demand, such as for sudden acceleration or climbing hills. In Toyota's hybrids a more powerful 50 kilowatt electric motor powers the car entirely at low speeds and when accelerating evenly. The petrol engine kicks in only when the car picks up speed or accelerates suddenly.

The environmental advantage of hybrid power is that emissions are far lower than from conventional cars. And the motor can be used as a generator when the driver is braking. This allows kinetic energy that would be lost as heat in normal braking to be used to recharge the battery, and makes a major contribution to a hybrid's fuel efficiency.

The two companies have been pleasantly surprised by their hybrids' popularity. "We never did any real marketing of the Prius," says Sam Butto of Toyota in California. "The news spread by word of mouth and in internet chat rooms."

"For the hybrid manufacturers it is perfect timing for gas prices to be increasing," says Anthony Pratt, a motor industry analyst with the California based market research firm J. D. Power. Hybrids sell to people who want to add a "green" tinge to their motoring, Pratt says. "You don't have to give up on performance to be environmentally responsible."

But the fuel savings come at a price. Hybrids cost between $3000 and $3500 more than an equivalent petrol only car. The economics, even with prices at their present level, are marginal: driving 24,000 kilometres a year, payback would take six to seven years, Pratt says.

Nevertheless, J. D. Power expects hybrid sales to continue growing fast over the next three years. Both Honda and Toyota are planning to expand their ranges. Later this year Ford will launch a four wheel drive hybrid, and other manufacturers, including Nissan and General Motors, also have hybrid cars in the pipeline. J. D. Power forecasts that by 2008 annual sales of hybrid cars will exceed 400,000 about one hybrid for every 40 conventional new cars.

In Europe, sales are increasing much more slowly. This is partly because fuel taxes are far higher in Europe so changes in the price of crude oil have proportionately less impact on pump prices. In the UK, petrol prices at the pump have only increased by 6 per cent this year, against more than 30 per cent in the US.

The other factor is that economy minded European drivers can always buy a diesel car. Last year 43 per cent of car sales in Europe were diesels.

This option is not available to many Americans. For a start, there are far fewer diesel models on sale in the US than in Europe. This is partly because the dirty, noisy and unreliable diesels available during the last oil price hike, in the 1980s, put many Americans off them for good. And several key markets, including California and New York, have such strict limits on particulate emissions that diesels are in effect banned.

To succeed in Europe, says Derek Charters of the UK's Motor Industry Research Association, hybrids will have to compete with diesels that are almost as fuel efficient. "Petrol hybrids do have their advantages," Charters says. "City driving is much smoother and more relaxing. The electric motor responds much more quickly and they are quiet."

In the US, prospects after 2008 are uncertain. "I expect sales to plateau," Pratt says. However, this could change if the government gives hybrids a subsidy as the Democrat presidential candidate John Kerry has promised or if fuel prices continue to rise.

"We never did any real marketing of the Prius. The news spread by word of mouth and in internet chat rooms"
Last Updated ( Tuesday, 14 July 2009 )