Experts Divided on the Impact of Hybrid Cars

Toyota has announced plans to make a hybrid gas-electric version of its popular Camry sedan next year. Fuel-efficient hybrids are gaining in popularity, but experts are divided about how much of a dent they will make in the nation's demand for gasoline.

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MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

MICHELE NORRIS, host:

And I'm Michele Norris.

Toyota announced today that it will begin making a hybrid version of its popular Camry sedan next year. The company's top US executive, Jim Press, says the fuel-saving cars will be built at an existing Toyota plant in Kentucky.

Mr. JIM PRESS (Toyota): Just imagine, America's favorite car being built on American soil to address the needs of Americans' increasing concern about the environmental impact in our society's dependency on oil.

NORRIS: That concern and rising gas prices have helped fuel a doubling in hybrid sales this year. But gas/electric vehicles still represent less than 2 percent of overall car sales, and experts are divided about how much of a dent these cars will make in the nation's long-term thirst for gasoline. NPR's Scott Horsley reports.

SCOTT HORSLEY reporting:

Toyota credits the popularity of its Prius hybrid with helping to boost North American sales last year by 8 percent. There are tens of thousands of hybrid owners on the road, including Toni Cruise(ph), who was introduced to her new silver Prius just last week at a dealership outside San Diego.

Unidentified Man: The headlights are right here. And there's your washer wipers, right here.

Ms. TONI CRUISE (Hybrid Car Owner): Thank you.

Unidentified Man: OK?

HORSLEY: At first, Cruise was a little overwhelmed by the car's high-tech navigation system. But after a quick drive around the neighborhood, she's happy with her energy-saving choice.

Ms. CRUISE: Oh, I'm excited about it. We needed a vehicle with good gas mileage. We have another Toyota, and it's a very high gas consumer. It's a Sequoia. So this is to offset that.

HORSLEY: Precious Priuses have been moving quickly off of dealers' lots even before the price of gasoline topped $2 a gallon. General sales manager Harold Dean says this dealership sells about a dozen Priuses each month. He could sell three times that many if he had the cars.

Mr. HAROLD DEAN (Toyota Dealership Sales Manager): They've been strong for going on our third year now. Toyota's done their part, they doubled the production, but it sounds like they should've tripled it.

HORSLEY: But hybrid sales will have to grow a lot more to make a significant difference in overall demand for gasoline. The California Energy Commission held a workshop today on how much gas the state's drivers will need over the next 20 years. One question the staff has wrestled with is how many of those drivers will be behind the wheel of hybrids or other fuel-efficient vehicles. As a strict economic calculation, the gasoline savings of a hybrid may not be worth the higher up-front cost. K.G. Duleep, who's a consultant to the commission, says many of the early adopters of hybrids have had more in mind than just saving money on gasoline.

Mr. K.G. DULEEP (Consultant, California Energy Commission): There's certainly an element of concern over the environment and greenhouse gas warming that's motivating people to buy it. And I also suspect that war in Iraq and the situation in the Middle East plays a part in people's desire to conserve gasoline.

HORSLEY: Duleep thinks hybrids might ultimately account for about 15 percent of all car sales, with fuel-efficient diesels making up a similar fraction. Forecasters at J.D. Power and Associates are much less bullish about hybrids. They think sales will top out around 3 percent of the market.

Even if hybrid sales grow faster than that, it would take years to make much difference in the fuel consumption of the 230 million vehicles on the road. Walter McManus, who studies the auto industry at the University of Michigan, warns there's also a danger called the rebound effect.

Mr. WALTER McMANUS (University of Michigan): Suppose you had a fairy godmother who could wave a wand and improve the fuel economy of every existing vehicle by 10 percent. How much fuel would we consume? And if you said 10 percent less, that's not correct because what you've done is lower the cost of driving. And Americans drive more whenever the cost of driving is lower.

HORSLEY: That hasn't stopped Toyota, though. The company's Jim Press predicts that within 20 years, there will be a hybrid version of every vehicle on the road. Scott Horsley, NPR News, San Diego.

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