Working at an unprecedented pace, today’s automotive engineers are exploring new technologies to revolutionize cars for a post-petroleum era. Innovative battery chemistries, advanced biofuels, and hydrogen fuel cells—will likely be future game-changers. Yet, it will take many years to convert the American fleet to these new technologies.

Meanwhile, there’s another track of innovation aimed not at revolutionary future technologies, but at reducing the cost of today’s most efficient cars that still run on gasoline. For example, what if a relatively simple change in the technology powering today’s hybrid cars—there are nearly 2 million gas-electric vehicles already on U.S. roads—could make them much more affordable and therefore nearly ubiquitous? How in the world do you disconnect hybrids’ high mpg from its higher cost?

With a single motor, two clutches and a standard transmission, it turns out. Mostly escaping notice, a new crop of 2011 hybrids—including the Hyundai Sonata Hybrid and the Infiniti M35 Hybrid—are using a second clutch to achieve the critical goal of separating operation of the gas engine and electric motor. Some existing hybrids already have a clutch to disconnect and reconnect the transmission from an engine and electric motor, which are integrated and bolted together. That’s Honda’s approach. Alternatively, using two electric motors and a special transmission, as Toyota and Ford do, achieves the same goal of freeing the electric motor from the engine—but at a higher cost.

However, these new parallel two-clutch systems—hence the name P2—could provide 95 percent of the fuel efficiency benefits of an expensive two-motor system, like the one in the Toyota Prius, but at cost reductions of one-third or more.

The P2 hybrids could match or even beat the cost of Honda’s simpler one-motor system, which has the major drawback of not being able to run the electric motor without simultaneously operating the gas engine. In fact, the P2 hybrids are similar to Honda’s IMA (Integrated Motor Assist) technology, but with the key advantage of a clutch allowing the gas engine to shut down, and the electric motor to do more of the work.

Driving Down Cost

“It’s the next evolution of hybrids,” said John DeCicco, senior lecturer at the University of Michigan School of Natural Resources and Environment. “What you have with this next round of systems is a lower cost solution to providing the efficiency benefit comparable to a two-motor powersplit system. That’s significant for public policy because it makes higher Corporate Average Fuel Economy (CAFE) levels less costly to achieve.”

Hyundai says the Sonata Hybrid can travel up to 75 mph purely on electricity. It also means better efficiency on the highway, rather than the city. Other advantages include the ability to recapture more regenerative braking, eliminate engine drag, and to increase the size of, and acceleration from, the electric motor. It also paves the way to plugging into grid energy and storing that energy in larger batteries—but that would defeat its most compelling advantage: reducing cost.

A September 2010 technical paper—co-published by the U.S. Environmental Protection Agency, National Highway Transportation Safety Administration, and the California Air Resources Board—compared manufacturing costs of various hybrid and electric cars. It showed the price of batteries for P2 hybrids at a quarter the cost of a Volt-like plug-in hybrid and about a tenth the cost of 100-mile electric vehicle, projected all the way out to 2025.

Additional cost advantages also come from being able to use standard off-the-shelf transmissions, and eliminate the use of a torque converter.

Preferred Approach for New Hybrid-Makers

“Look at the manufactures who have not already made a substantial investment in hybrids, who have not locked themselves to the [Honda] IMA or [Toyota/Ford] powersplit design,” said John German, senior fellow for the International Council for Clean Transportation. “Every one of those manufactures is coming out with P2 systems. And it’s not just Hyundai, Infiniti and Volkswagen that have products hitting dealerships this year. Mercedes and BMW are also coming out with P2 systems, just not this year.” To German, this is clear evidence of the cost and efficiency advantages of the one-motor, two-clutch approach.

German believes it will take five to seven years before these new hybrid-makers catch up with Toyota’s technology. “Toyota is so much further down the learning curve, they’re operating at such higher volumes,” acknowledged German. Yet, he believes that by 2020, these P2 hybrids will penetrate the mass market. “They will become standard on vehicles.”

That timing is significant, because the California Air Resources Board, NHTSA, and EPA are all working on legislation out to 2025. Widespread adoption of hybrids in the 2025 timeframe—assisted by a smaller number of electric and fuel cell cars—would make a fleet average of 60 mpg highly achievable at cost. At that point, German believes P2 hybrid systems could mean cost-competitive 40-mpg SUVs.

Hybrid systems like the P2 will be the mainstay drivetrain to achieve the next round of 2025 standards just like the turbocharged gasoline direct engines are the for the 2016 standards,” said Roland Hwang, transportation program director for the Natural Resources Defense Council.

“Engineering advances are lowering the cost of higher fuel economy levels,” DeCicco said. “Automakers might say that they’ve already picked all the low-hanging fruit. What we’re seeing now is that the tree of innovation grows new low hanging fruit every year.”