The March Toward Plug-In Hybrids Continues

By · June 18, 2008

The line-up of plug-in hybrid converts is growing, with General Electric being the latest company to hop on a train that seems like its leaving the station. The train is an apt analogy since GE is trading on its locomotive diesel-electric hybrid experience as a rationale for why it will be able to help accelerate Chrysler’s late move into plug-ins. With GE as a partner, Chrysler will be joining GM, Ford and Toyota, who have all committed to rolling out plug-in hybrids during the next few years.

Chrysler and GE will be building 80 demonstration vehicles during the next three to five years to showcase a dual-battery energy storage system. Funding for the project will come in part, from a paltry $30 million the Department of Energy has committed to spend on plug-in hybrids over the next three years. The money will be parceled out $10 million each for Chrysler, GM and Ford. The same automakers had asked the government to spend $500 million to help make plug-in technology a reality in the marketplace.

The added irony to the small amount of money the government is putting into the mix is that GM and Toyota have both pledged to have commercial versions of their plug-in vehicles on the market before the federal money runs out. GM has said it would have its Volt, and Toyota said it would have a plug-in version of the Prius for sale in 2010.

In addition to the $500 million the auto companies were looking for in government battery funding, Ford and GM also chimed in that the government needed to offer some substantial incentives to make plug-ins viable in the showroom. GM had initially targeted a $30,000 retail price for the Volt, but has admitted more recently that it needed to charge more to recoup higher development costs for the vehicle. Ford’s President of the Americas, Mark Fields, reminded a recent plug-in conference that “the governments of Japan, China, Korea and India are significantly funding the research, development and deployment of plug-in hybrid vehicle technologies."

The bottom line in all this: the U.S. government is finally putting some money into plug-in hybrid development, but it looks like industry has already sunk its own change into the program. Now the auto companies would like the government to prime the early market—as it did with conventional hybrids—to help them to hedge their bets if these technologies don't take off, and absorb a smaller loss on the early models.

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