Newsletter Archive Index

~~~ Hybrid Cars Newsletter: Issue No. 0005 ~~~
Moderator: Bradley Berman [brad@hybridcars.com]

In This Issue:

– Are Hybrid Makers Being Too Cautious?
For the rest of the year, the number of people on waiting lists will exceed the number of hybrid cars being released. Why don’t the carmakers make more cars in a production run?

– The Next Batch of Hybrid Cars
Within a year, the number of available hybrid models will jump from three to about twelve. Here’s what we know now.

– Looking Further Down the Road: Plug-in’s
We all know that hybrid cars don’t have to be plugged in, but just imagine if you had the option to juice-up your battery—you could run 100% of your in-town driving in all-electric mode.

– Turning Hybridcars.com Over to You
There’s just one of me and there are thousands of you. New free discussion forums on hybridcars.com allow you to share ideas and debate the hot issues with the fellow “hybrid curious.”

– Wrap-Up: Update on Hybrid Cars eBook
Learn what the experts have to say about hybrid cars. Nine in-depth interviews are finished, transcribed, and edited—and will be ready for download within weeks.

Ladies and Gentlemen:

2004 was supposed to be “The Year of the Hybrid Car.” With the 2004 Toyota Prius racking up award after award, and a long list of new hybrid cars getting ready for market, it looked very promising. When gas prices spiked up about two months ago, interest went through the roof. Waiting lists for hybrid cars grew and those same waiting lists were cited as evidence of hybrid cars finally earning the respect they deserve.

I read the tea leaves in a different way. I see the long waiting lists as a sign that this year is not going to be the “break-out year” for hybrids. Manufacturers underestimated the interest, and therefore there will be not nearly as many people behind the wheel of hybrid as might have been. In this newsletter, I’ll provide a few more details about how Toyota and Ford under-produced their hybrids.

In many ways, 2004 is a dress rehearsal for a hybrid extravaganza in 2005. Still, hybrid cars hitting the big time in 2005 will happen if all the manufacturers come through with their new models – and only if they produce those models in high enough volumes to meet demand. Recently, I’ve been studying the promised hybrid offerings. This newsletter issue will provide links to where my summary descriptions are posted on hybridcars.com. This is followed by a little glimpse even further down the road to the day when hybrid cars offer plug-in capacity—and why that’s a good idea.

Finally, some website business: Hybridcars.com has just launched discussion forums as a way to gather hybrid car fans from the far flung corners of the Internet into a more comprehensive and focused group. Learn how you can participate.

Are Hybrid Makers Being Too Cautious?

Carsdirect.com is now listing the 2004 Toyota Prius as “sold out.” We are now at a point where it doesn’t make sense to join a waiting list for the 2004 model. There simply will not be enough cars to meet the demand. Despite numerous press accounts of hybrids not getting advertised mileage, and despite the mediocre government incentives for hybrid cars, the demand has grown way beyond the supply. I’m hearing rumors of people selling their waiting list spots on eBay. Toyota recently maxed out its global production of the Prius, increasing production by 44% to 130,000 cars (with only a modest increase of the allotment to the U.S. from 36,000 to 47,000).

Toyota’s Dave Hermance, one of the interview subjects of my eBook (more about that in a minute), told me that Toyota was surprised by the market response. He explained Toyota’s cautious approach: “You don’t know how long-sustained launch demand is likely to be. You’ve got to walk a pretty fine line. You don’t want to rush out and do something foolish, especially since there will be a bunch of new players in the market over the next 12 months. We need to watch the market sift out, see what fraction of that we can get, and what unmet demand there might be then.”

>> Go to the Hybridcars.com Discussion Forum to share your experiences regarding Hybrid Car waiting lists.

Is Toyota alone in taking this cautious approach? No. Just as pricing for the new Ford Escape Hybrid was announced last month, so were reports that Ford will release only 3,000 out of the 20,000 expected Escape Hybrids during the 2004 calendar year. The remaining 2005 Escape Hybrids will come out in January or later. Waiting lists for the Escape Hybrid are already going around the block.

The starting point for the front-wheel drive version of the Escape SUV Hybrid, which is expected to get nearly 40 mpg in the city, is $26,970. But the Detroit News is reporting the “Ford will attempt to extract for it more than $6,000 above the sticker.” The dealers know they can find customers, because Ford is not producing enough to meet the demand. Perhaps Ford is concerned about potential technical problems of this new technology (Ford’s first hybrid), especially after delaying the release of the SUV once already. Perhaps they are concerned that Lexus and Toyota will be releasing SUV hybrids just a few months after the Escape hits the market. Detroit News writer John Schnapp offers four other potential reasons why the price will be so high:

(a) Ford is simply attempting to pre-empt for itself the premium it thinks its dealers would charge
(b) Ford’s pricing reflects the actual high cost of producing only 1,000 hybrid powertrains a month
(c) Ford is leaving itself some margin for later discounting, if necessary, or simply
(d) Ford thinks 1,000 people a month will be willing to pay its price.

It’s interesting to note that the Honda Civic Hybrid is an exception to the overwhelming demand, selling in slightly lower numbers in the first three months of 2004 than it did in 2003. I’m a Civic Hybrid driver so I’m biased, but to me, it’s a great option for those eager to start driving a hybrid. The mileage is very close to the Prius, and the handling and styling is identical to the conventional Civic. Without the waiting lists, awards, and fanfare, Honda continues to slowly and surely push forward on their hybrid program. The Civic Hybrid deserves (but hasn’t got) every bit as much buzz as the Prius. Honda also recently announced the scheduled release of the Accord Hybrid in 2005.

> Read more about the Honda Civic Hybrid

In order for the hybrid revolution to really begin, we need demand—and supply! The demand is already strong, and could grow to tsunami proportions if gas prices head toward three dollars a gallon or if the government increases fuel economy requirement standards and/or hybrid tax incentives. But this won’t really mean much unless the manufacturers confidently produce enough cars to meet this demand. When I spoke to Dave Hermance a few months ago, he felt that the increased allocation of 47,000 Priuses will “get us through the year.” The evidence is mounting that those hybrids will barely make it to the fall. Hermance added, “It’ll be interesting to see what happens next year.”

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The Next Batch of Hybrid Cars

Next year at this time, hybrid car shoppers will be able to choose from two compacts, three sedans, three SUVs, two pickups, and a maybe a minivan. Here’s a quick summary of the new hybrid offerings:

Honda Accord Sedan
http://www.hybridcars.com/honda-accord-hybrid.html
The Accord Hybrid will be even quicker than the already powerful 240 horsepower Accord V6 Sedan, while providing the fuel economy of a four-cylinder, compact-class Civic—40 mpg on the highway.

Nissan Altima
http://www.hybridcars.com/altima.html
Nissan is barely putting its big toe in hybrid waters with the planned release of the Altima Hybrid in 2006.

Chevy Malibu Hybrid
http://www.hybridcars.com/chevy_malibu_hybrid.html
The hybridized Malibu sedan, like the Saturn SUV hybrid, is targeted for an anemic 12 – 15% increase in fuel economy (mostly coming from idle-stop), and will focus its hybrid benefits instead on extra power and sportier handling.

Ford Escape SUV
http://www.hybridcars.com/ford-escape-suv.html
The 2.3-liter inline four-cylinder engine, combined with a 65-kilowatt electric motor, is designed to make the vehicle drive more like a six-cylinder. It’s off-road capable, and will be tailor-tow rated to 1,000 pounds.

Lexus RX 400h Luxury SUV Hybrid
http://www.hybridcars.com/lexus-RX400h-suv-hybrid.html
Putting the Toyota hybrid system into a Lexus SUV is a clear attempt to go after the luxury vehicle buyers who are not afraid to spend a few extra dollars for cool technology, increased fuel economy, and eco-friendly status, while not sacrificing their creature comforts.

Toyota Highlander Hybrid
http://www.hybridcars.com/toyota-highlander-hybrid.html
Offering a hybrid power option for the popular and highly regarded Highlander sounds like a winning option, especially for those holding off on Ford’s unproven hybrid technology in the Escape, and those not interested in paying for the luxury features on the Lexus RX 400h.

Toyota Sienna/Estima Hybrid Minivan
http://www.hybridcars.com/toyota-sienna-minivan-hybrid.html
The Estima is marketed in the U.S. and Europe as the Sienna. It’s very likely that the Estima Hybrid will be the first hybrid-power minivan on the American retail market, with an anticipated launch in late 2005.

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Looking Further Down the Road: Plug-in’s

I’ve read a number of articles about and interviews with Dr. Andy Frank, Professor of Engineering at University of California at Davis and Felix Kramer of CalCars, about the virtues of a hybrid car that can charge up its batteries overnight using household electricity. With a plug-in hybrid, you would not be required to plug the car in, but you would have the option. As a result, drivers will get all the benefits of an electric car, without the biggest drawback: limited range. You’ll be able to go all-electric for the ninety percent of your driving that takes place close to home. When the electric charge runs out, a downsized gas engine kicks in.

> Read more of the details about a hybrid plug-in option

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Turning Hybridcars.com Over to You

For months, I’ve been contemplating adding discussion boards to hybridcars.com. To be quite honest, I’ve hesitated because so much of the conversation on the existing boards is filled with friendly chat about this hybrid feature or that—and I didn’t see a compelling reason to create one more place for hybrid drivers to compare notes.

Then, two things occurred to me. First, I’m not seeing a discussion forum that is very focused and highly organized on the most pressing issues: foreign oil dependency, details about hybrid technology, government legislation regarding hybrids, and market issues (e.g. waiting lists). Second, it seems that most of the existing discussion boards, most notably Yahoo groups, are organized by car—and a lot of good could come from pulling the owners of various hybrid models together to discuss areas of common interest. In the most grandiose terms, organizing hybrid car drivers into a cohesive group could help push the clean car agenda. So, the discussion forums are now set up and ready for you to use. Registering to post comments is free and easy.

Before you go there, I would like to invite you to apply to become a moderator of one of the forums. Send me an email and let me know why you would be especially good at keeping one of these forums on track, eliminating the distracting comments, posting informed comments, and evangelizing the forum on the Internet and in your offline life. I’m only going to choose one or two very well informed and committed people for each of the following inaugural forums:

Mileage Experiences | Hybrid Gas-Electric Technology | Alternative Vehicle Technology | Oil Dependency | Hybrid Car Incentives | Hybrid Car Waiting Lists | Cars and the Environment | The Cars

This newsletter is the first announcement regarding these forums, so now’s your chance to be the first to post your thoughts, issues, and concerns—or to become a moderator on one of these forums.

> Check out the hybrid cars discussion forum

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Wrap-Up: Status of Hybrid Cars eBook

In the last newsletter, I mentioned that I’m working on a downloadable eBook about hybrid cars. Well, all nine interviews have been edited. It should be ready for publication in about three weeks. Here are just seven of the hundreds of topics covered: (1) Improving Fuel Economy on Conventional Engines, (2)Hybrids and Constantly Variable Transmissions, (3)The Many Consequences of our Oil Addiction, (4) Rivalry between Toyota and Honda Hybrid Drivers, (5) Activism on the Sales Floor, (6) Hybrid Resale Values, and (7) Ford and the Coalition Supporting the CLEAR Act.

> Let me know if you would spend $10 for an eBook all about hybrid cars

That’s all for this issue. I hope you liked it. Thanks for your interest. Until next time…

Happy Driving,
Brad Berman
brad@hybridcars.com

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