Here come the hybrids

"Hybrid vehicles work. And more and more Americans are willing to buy them." That’s not some crazed tree hugger talking, it’s an editorial in the St. Petersburg Times (not the one in Russia).

Get ready for hybrid cars and trucks, because a growing number of automakers will soon be offering them. I went to Manhattan recently for a meeting with some top execs in the midtown General Motors Building (FAO Schwarz is at street level).

Robert Purcell, GM’s longtime environmental vehicle guru and now group director for new business development at GM Powertrain, outlined a multi-pronged hybrid strategy for the world’s number-one automaker. As the Associated Press noted, "GM’s new strategy sends a clear signal that auto executives are starting to consider energy-efficient hybrids as potentially viable offerings to the mainstream motoring public."

GM says it could be producing a million hybrids a year by 2007, and it plans on at least a dozen models. As Purcell outlined it, GM’s strategy will start with 40-foot city buses, which typically burn 4,000 to 5,000 gallons of diesel fuel annually. GM’s buses, first tested in Orange County, Calif., fleets, will be built by the Allison Transmission Division and will cut particulate emissions (the main problem with diesel) by 90 percent and nitrogen oxide emissions by 50 percent. They’ll also deliver 50-percent better acceleration. According to Purcell, if every one of the 13,000 city buses in the U.S. today were converted to hybrid power, it would save 40 million gallons of fuel a year. "That’s the equivalent of 500,000 Toyota Priuses," he said.

The next step is a "mild" hybrid version (with a belt alternator starter system) of the GMC Sierra and Chevrolet Silverado full-sized pickup trucks, coming late this fall. The fuel economy gain is modest — only 10 to 15 percent — but an added benefit is the ability of the truck to act as a generator. It can power a home or construction site, providing a good source of backup electricity. "But this is a generator with a catalytic converter, so it’s relatively clean," Purcell said.

Then there’s a hybrid Saturn Vue sport-utility vehicle, on sale in 2005. The hybrid Vue features a dual electric motor system and a continuously variable transmission that will increase fuel economy by 50 percent, to 40 miles per gallon. Other forthcoming hybrids using the same motor system include the Chevy Equinox SUV in 2006 and the Chevy Malibu sedan (in 2007).

GM remains skeptical that Americans will ever be attracted to small cars, and its strategy is quite different from the Japanese automakers. The GM executives in New York praise the forthcoming Lexus RX hybrid, which offers a V-6 engine and dual electric motors to provide on-demand four-wheel-drive. Lexus claims it will offer V-8 levels of performance.

GM isn’t even sure it will sell huge numbers of Saturn Vue hybrids, though it definitely plans to subsidize them and hopes to see larger federal and state tax breaks. It is nonetheless prepared for its hybrid sales to be a small niche in a company that sells almost five million vehicles a year. "It’s very important to provide customers with the vehicles they want to buy," Purcell says. "We need a sound business case."

But even Wall Street is beginning to be bullish about hybrids. According to Mike Wall, an analyst with the auto forecaster IRN Inc., "If the tax breaks are sweetened, and if you push the envelope for better gas mileage, I think you’ll see more [market] penetration."