Hybrids May Get Boost in Next U.S. Auto Fuel Rules

The next round of U.S. fuel efficiency standards aims to push gasoline/electric hybrid vehicles into the mainstream as the Obama administration looks for steeper and more consistent mileage gains from automakers, reported Reuters.

Regulators were due on Thursday to complete an outline of where the administration wants to go on auto efficiency between 2017-25. An announcement was set for Friday, industry and other sources familiar with the plan told Reuters.

The document is expected to articulate goals for fuel savings and seek comment from automakers, environmental groups and other interests. A formal proposal would follow and a final rule would be in place 18 months before the 2017 model year.

The administration's plan, although far from finalized, is important for investors seeking clarity on prospects and costs of various efficiency technologies, like batteries for plug-ins, fuel cells, and lighter-weight vehicle and component construction materials like composite fibers and aluminum.

Automotive industry and scientific experts believe gasoline/electric systems powering vehicles like the Toyota Motor Corp (7203.T) Prius, the Honda Motor Co (7267.T) CR-Z, or the Ford Motor Co (F.N) Fusion hybrid are going to become much more popular with manufacturers under the new standards.

"You will have to go with the alternative that's on the table now," said John O'Dell, senior editor of Edmunds Green Car Advisor.com.

"Some combination of electricity with or without an engine - conventional hybrid, plug-in, extended range. It will be a combination of those things," O'Dell added.

Conventional hybrid automobiles are the only vehicles on the road today with a measure of commercial popularity that could come close to meeting new aggressive government targets for fuel savings and emissions reductions, these experts say.

For instance, the 2011 Prius achieves 51 mpg city/48 highway. It runs on a nickel-metal hydride battery pack and a 4-valve/cylinder gasoline engine.

Hybrid sales overall are down this year and represent roughly 2 percent of the U.S. automotive sales market, roughly 150,000 cars for 2010 through August. Prius accounts for about two-thirds of the total, according to industry sales figures.

Hybrid sales have traditionally gotten a boost from high gasoline prices, which this year have remained steady around $2.70 in 2010 after dramatic price swings in recent years. In 2008, gasoline hit a record $above 4 a gallon.

Government tax breaks and manufacturer incentives have also helped sales and some of those have expired.