Business Week, "hybrids are going mainstream"

"When Toyota Motor President Fujio Cho predicted in June, 2001, that cumulative sales of the company's hybrid vehicles would hit 300,000 within four years, many industry watchers heard hype. After all, Toyota sold only 15,556 of its first-generation Prius hybrids in the U.S. that year." 

The quote, from a Business Week article posted on the Internet today by Chester Dawson, seemed silly just a couple of years ago, especially to Detroit. Yet, Prius sales are expected to hit 100,000 in 2005 in the U.S. alone, and Cho will probably be right, as Dawson states, "But Cho now looks prescient."

Even worse for Detroit, gas prices are still increasing. According to AAA Texas, "the national average for regular unleaded self-serve gasoline reached more than $2 a gallon this week", and further stated, "If price increases continue in the coming days as expected, several Texas metropolitan areas will likely set new price records."

And the bad news doesn't stop there. This year's hurricane season has significantly damaged U.S. oil refinement capacity. As America moves into winter, prices could go even higher.

"If we start to see quite a cold winter in the northern hemisphere, and particularly in the U.S., that will drive prices in the short-term," states industry analyst Daniel Hynes of Anz Bank in Melbourne.

Since hybrids cost around $3000 more up front, higher gas prices take some of that price-pain away, especially if filling up your SUV starts costing $60, $70, or even $80. At current gas prices, combined with the Clean Vehicle Tax Credit, it should take less than 5 years to recover your upfront costs.

Every time gas rises in price, that recovery time lessens, and in the years ahead, as Toyota rolls out possibly a 1,000,000 hybrids in the next few years, hybrids will start matching conventional cars in price - plus the fuel savings and tax credits.

What? Did I just say hybrids will cost less - after gas-savings - than conventional cars, while reducing foreign oil-dependency, helping fight terrorism, and reducing SMOG and global warming pollution emissions?

Yes, I did.

And it doesn't just end with Toyota's Prius. Already, the growing auto giant is set to release two hybrid SUVs, the Highlander Hybrid and the Lexus RX400h Luxury hybrid, and America's best selling car, the Camry, is just around the corner.

Then you have Honda, which already offers the Civic Hybrid Car, and is releasing it's Accord Hybrid car in December.

And with Detroit a couple of generations behind the Japanese, conventional car pricing might price Detroit right out of American market-share.

So, the question is no longer whether hybrids will go mainstream, the question is, 'Can Detroit survive without going hybrid?'