A variety of new technologies that can be combined in different configurations are being developed for hybrid vehicles. Government and industry efforts promise exciting new vehicle possibilities in the next ten years. Hybrid electric vehicles present an option for state legislatures examining alternative fuel fleet requirements and emissions reduction standards. Factors for legislatures to consider when evaluating policies involving vehicle technologies include vehicle cost, incentives and fiscal impacts. This report suggests options for state policymakers and explains how hybrid vehicles may fit into the future transportation picture.
Cost presents a concern and challenge for hybrid vehicle designers.
Even with new design and development of hybrid components, these vehicles are expected to be more expensive than traditional automobiles. So far, no hybrid has demonstrated sufficiently high performance that fuel savings over the life of the vehicle could offset the higher initial cost. Policies that encourage manufactures to produce fuel efficient vehicles cannot be effective without policies that encourage consumer demand for such vehicles. Utah established a clean fuels private sector vehicle loan fund offering reduced interest loans as an incentive to purchase vehicles that operate on cleaner fuels. Drivers who purchase cars that produce more emissions and use lots of gasoline would pay a premium or a tax for that vehicle.