General Motors Corp. President and CEO Rick Wagoner, Ford Motor Co. head of North American Automotive Operations Martin Inglis and DaimlerChrysler Corp. President James Holden appear in agreement about hybrid-powered vehicles: Their respective companies aren't planning on profits from their initial hybrid efforts.
Mr. Holden says that DC projections of a 100,000-unit build for its now-prototype hybrid Durango show the vehicle would have to sell at a price "penalty" of $1,500 to $3,000 - meaning the company would lose that much on each of the hybrid sport/utility vehicles (SUVs) it sold.
Meanwhile, Ford's Mr. Inglis intimates that when it launches a hybrid-powered version of its new Escape SUV in 2003, Ford also will have to sell its hybrid SUV at a loss.
Mr. Wagoner, without mentioning how these cost concerns relate to GM's recently announced plan to sell hybrid-powered pickups in 2004, adds that the business case for hybrids "might be more compelling in other countries, particularly in Europe," where exorbitant fuel costs could inspire customers to pay a meaningful premium for hybrids.
Mr. Holden adds that the "lack of a fuel policy" in the U.S. means consumers aren't driven to pay a higher price for vehicles that promise increased fuel economy, yet regulators continue to press for enhanced fuel economy and reduced emissions.
The two auto companies currently selling hybrid-powered vehicles in the U.S., Honda Motor Co. Ltd. (Insight) and Toyota Motor Corp. (Prius), are believed to be selling the vehicles at a substantial loss.
Mr. Holden also suggests that hybrid SUVs initially might force buyers to accept certain other compromises, particularly in towing capacity. "If you've got a 28-foot boat, you probably don't want a hybrid - at least as we envision them today."
All agree, however, that the eventual goal for hybrids is to increase every measure of performance.
