
One of the largest hurdles yet to be overcome by the average hybrid car is the inherent high cost of its gasoline-electric powertrain. The average hybrid will set the manufacturer back around $6000 more than a car with a conventional powertrain. However, this difference could be brought down to just $2000 within the next ten years.
Just about every automaker out there is developing a next generation hybrid vehicle. General Motors recently unveiled its new Chevrolet Volt plug-in hybrid, and Toyota already released photos of its next-generation Prius. Honda, BMW, Mercedes-Benz, and Nissan are also getting into the mix with hybrids of their own design.
In a recent Bloomberg report, the potential drop in hybrid costs is said to be primarily due to technological improvements, economies of scale due to rising production numbers, and a greater amount of experience with the technology.
Considering the recent jump in demand for hybrids, pressure for the vehicles will surely increase in the future from possible higher gasoline prices and more arduous emissions standards. This demand rise is expected to be over 16 times its current level or around 10 million hybrids by 2018. JP Morgan Chase and Co. analysts predict that sales of hybrid vehicles will increase to 10.2% of the overall market. The U.S. is anticipated to see the largest growth after 2013, with Europe and China not too far behind.
+ Motor Authority: Hybrid costs expected to drop by two-thirds over next decade