(By Mayur Pahilajani - iStockAnalyst Writer)
Washington, D.C. - Despite an uncertain future of hybrid vehicles in the U.S. market, there is already a lot of buzz about a complete switch to fuel-efficient cars as oil supplies decline and gasoline rates surge, prompting a drop in consumer spending. As hybrid car makers prepare to deliver a most fuel-efficient car in international market, the United States government has only recently started pushing the domestic automakers to retool their factories to build hybrid vehicles.

The U.S. House of Representatives late Wednesday passed $25 billion auto industry loan program to ease financial distress and help the firms meet new federal fuel-efficiency standards. The members voted 370 to 58 to approve the spending bill that would provide funds at low interest rate. The bill is expected to become legislation by the end of this month after the Senate and President George W. Bush approve the package.

But Detroit's Big Three auto makers may not be necessarily pleased with the current proposed rescue package by the government. General Motors Corp. (NYSE: GM), Ford Motor Co. (NYSE: F), and Chrysler LLC have been demanding for a $50 billion low-interest long package to be paid for over the three years from the government to help boost the companies' retooling.



But the request encountered strong resistance from the members on both sides. The current package may help the U.S. automakers to shore up their financial statements till 2010 and overhaul plants that are at least 20 years old to produce cars and trucks with 25 percent extra fuel efficiency. Based on the last year's energy bill, the government is likely to push for raising fuel efficiency to 35 miles per gallon by 2020.

However, the companies have already launched their individual projects to build hybrid vehicles that would attract most of the domestic as well as international consumers.

On September 23, Chrysler unveiled working prototypes of an electric vehicle and two plug-in electric hybrids and said that it plans to launch one of the vehicles to market in the U.S. by 2010. Chrysler claims that the Dodge EV has a driving range of 150-200 miles, approaching the range and performance of the all-electric Tesla Roadster.

Ford has pledged to produce more hybrid cars and trucks, following its recent announcement of launching more than six small, fuel-efficient cars and sell in the North American market. The company already manufactures the cars for the European markets.

On September 16, GM unveiled the Chevrolet Volt plug-in electric car on its 100-year anniversary celebration. According to the company the car would be ready for mass production and would be sold in the U.S. market by the end of 2010.

Some of the major competitors to the three automaker giants include Toyota Motor Corporation (NYSE: TM), Nissan Motor (NSANY) and Honda Motor Co., Ltd. (NYSE: HMC). Out of these three automakers, the Japanese carmaker Toyota is one step ahead. The company recently indicated it is prepared to launch the world's first car powered by compressed natural gas (CNG) and electricity. The company is likely to present its latest concept hybrid-car at the Los Angeles auto show in the month of November.

Meanwhile, the market analysts on Wall Street are more concerned about the financial status of the companies compared to the revenue generated by the hybrid vehicles.

A report, however, may provide some insight on the future of fuel-saving cars and trucks. In fact, plug-in hybrids may gain more popularity than the standard hybrids. According to a report by San Diego Gas & Electric (SDG&E) released on Wednesday, a year-long study has shown the plug-in hybrid cars achieve far better gas mileage and generate less pollution than standard hybrids.

"The potential for plug-in hybrids to reduce our dependence on foreign oil, reduce greenhouse-gas emissions and reduce consumer expense for transportation fuel is significant," Hal Snyder, vice president of customer programs for SDG&E, said in a statement.

With the plug-in hybrids, the consumers will require to recharge the car batteries through a standard 110-volt household outlet and charge in five to six hours for a 5-kilowatt-hour lithium-ion battery. The automakers are aiming to provide plug-in hybrids to showroom floors across the nation in late 2010.  


Source: http://public.sempra.com/newsreleases/viewpr.cfm?PR_ID=2305&Co_Short_Nm=SDGE