SOON ENOUGH:

Itching To Ditch The Slow Lane (David Welch and Chester Dawson, 4/25/05, Business Week)

[T]echnology will have to deliver more -- and for less money -- if hybrids are going to penetrate deeper into the market than just 0.5% of the 17 million U.S. car-buying consumers every year. To boost that share, carmakers must overcome daunting technological hurdles -- most of all, making hybrids' battery systems smaller, less costly, and more powerful. That would cut the nearly $4,000 price premium hybrids command and boost mileage. It could also deliver a big payoff in driver comfort. "Improving driving performance and pleasure is the next frontier for hybrids," says Takehisa Yaegashi, Toyota's senior manager for hybrid power train development.

Battery technology has already made great strides from the early days. Today's nickel metal hydride battery systems cost about $2,000 to $3,000 a car -- less than half the price of the first Prius power packs back in 1997. And they weigh half the 170 pounds of the batteries in that first generation.

Even so, better batteries may be the biggest barrier in reducing the cost of hybrids. Honda estimates that the battery accounts for about 60% of the $3,300 extra cost of its Accord Hybrid. One company insider says if the hybrid price premium could be halved, the technology could grab two-thirds of auto sales. For now, battery raw materials are expensive and, despite improvements, batteries still must be big to store a lot of energy. [...]

Battery technology has already made great strides from the early days. Today's nickel metal hydride battery systems cost about $2,000 to $3,000 a car -- less than half the price of the first Prius power packs back in 1997. And they weigh half the 170 pounds of the batteries in that first generation.

Even so, better batteries may be the biggest barrier in reducing the cost of hybrids. Honda estimates that the battery accounts for about 60% of the $3,300 extra cost of its Accord Hybrid. One company insider says if the hybrid price premium could be halved, the technology could grab two-thirds of auto sales. For now, battery raw materials are expensive and, despite improvements, batteries still must be big to store a lot of energy.

Rising car sales spread those high costs over more units, but battery manufacturing capacity is still constrained. [...]

As batteries improve, they will do more than save space. They could allow cars to drive in ghostly quiet electric mode longer. With faster computer processors, future hybrids should manage a smoother transition between electric power and gas. The goal: a switchover to gas that is barely noticeable to the driver. When hybrids are given cheaper, more powerful electrical guts, their popularity will really take off.