Gas prices may be fueling trend

By John Porretto
Associated Press

Emma Komp takes a test drive in a Toyota Prius at a dealrship in Merriam, Kan. Registrations for hybrids in the United States have increased nearly 26 percent since 2002 and more auto makers will offer versions soon. Associated Press photos

Emma Komp checks the sticker of the Prius she test drove. Hybrids are generally priced $2,000 to $3,000 more than comparable models that are not hybrid.

U.S. registrations for hybrid vehicles rose to 43,435 last year, a 25.8 percent increase from 2002, according to figures from R.L. Polk & Co., a firm that collects and interprets automotive information.

California had the most registrations, followed by Virginia, Florida and Washington.

"People are buying hybrids because of mileage benefits and environmental concerns," said Lonnie Miller, director of Polk's analytical solutions unit. "With the rising cost of gas, hybrid registrations will likely increase in 2004."

Since 2000, hybrid sales in the United States have grown at an average annual rate of 88.6 percent, Polk said, but they account for only a fraction of total vehicles sold. Full-year U.S. sales for 2003 were 16.7 million.

Hybrids draw power from two energy sources, typically a gas or diesel engine combined with an electric motor. For now, the only versions available in the United States are small cars made by Honda Motor Co. and Toyota Motor Corp., but nearly every automaker is investing in hybrid technology.

Honda's hybrid Civic accounted for 50 percent of the registrations last year, slightly ahead of the Toyota Prius, Polk said.

Hybrid sales so far this year have been mixed.

Toyota sold 9,918 Prius models through March, 62.4 percent more than it sold in the same period last year, according to Autodata Corp. Toyota was the first in the world to commercially mass-produce and sell hybrid cars with the Prius in 1997.

Honda said it set a monthly sales record in March for the hybrid Civic, though first-quarter sales were off from a year ago — 5,982 versus 6,494.

Because of the relatively new technology, the hybrid Civic costs about $2,000 to $3,000 more than a comparable non-hybrid Civic, the automaker said.

Hybrid choices will increase. Ford Motor Co. is set to introduce a hybrid version of its compact Escape sport utility vehicle this summer, and luxury brand Lexus also plans a hybrid SUV. Honda plans to introduce a hybrid version of its midsize Accord passenger car this year.

Ford has said the hybrid system in the front-wheel-drive Escape allows the vehicle to get 35 to 40 miles per gallon in city driving, compared with 20 miles per gallon in a 2005 Escape with a V6 engine. It also plans another hybrid SUV and midsize sedan in the next few years.

Having more choices will make the hybrid vehicles more popular, Miller said.

Ford chairman and chief executive Bill Ford has said the federal government should offer tax breaks of about $3,000 or perhaps boost taxes on gasoline to spur consumer interest in hybrids.

Already, officials in some states have successfully pushed for incentives to make buying more energy-efficient vehicles more appealing. Others are trying.

Frank Hornstein, a state representative in Minnesota who drives a Civic hybrid, has introduced legislation that would give state residents a sales tax exemption for buying certain hybrid vehicles.

While one state senator has called the legislation social engineering, Hornstein said he believes Minnesota should promote the technology even if it means roughly $1 million a year in lost revenue, as the state estimates.

"The cost is somewhat minimal," he said. "The state should say: We think this is a good thing and we want to let the auto industry know that we'd like to see more of it."