"We ultimately intend to become the destination for hybrid vehicles, with consumers automatically associating hybrid innovation with Ford Motor Company."

7k Ford hybrids sold in 2006 (4 mos.) vs. 42k Toyota hybrids sold in 3 mos. 2008 is a long time to wait for a Fusion hybrid with 50+ mpg. Innovation? Lets hope Kermit the frog helps them jump higher, faster.

"A hybrid leadership for the company" Against whom? GM? I'm sorry, but I dont' appreciate beging spun. We get enough of that from our political leaders.

They say there is greater consumer awareness in regards to the use of oil, yet V-8 engines are still selling like hotcakes. I will be sad when gas prices settle down after the summer. I really do wish they would go up to $4 per gallon and stay there. People won't ever make the socially responsible decision...they make the decision that pleases them the most.

In the USA, the top 20% by income earn 50% of all the nations GDP. (By contrast, the bottom 20%, only earn 3%). For the upper 20%, the high (and higher) gas prices will not affect their decision to by a gas guzzler. To get these upper income consumers into hybrids, the auto makers are going to have to do a lot of education about performance (V6)hybrids. Of course V6 hyrids are not as good for the national security, trade deficit, and climate, as 4 cyclinder hyrbrids, but they are 25% better than a V8.

Of course the other way to get those top 20% into more fuel efficient cars is to increase the fuel efficiency standards significantly. For that though I think the people have to make it known that this is an election issue.

Increasing efficiency standards has its drawbacks too.
First, there are always gonna be loopholes in those standards.
Basically if cars get more efficient people will drive more because there is no incentive at the pamp to decrease number of miles traveled.
Declining sales of big SUV is prime example how effective market is at forcing people to be more efficient.
Slowly increasing tax on gasoline would save us more gas than all those efficiency standards combined.
I know,(you don't have to remaind me) that no politician would vote for it.
I also know that it would penalize poor more then rich, but that capitalism, it was design to do just that.

Given the rather inelastic demand for gasoline, one has to have a massive increase in gas prices and/or taxes to effect much change in consumption. After all, despite higher gas prices, our consumption of gasoline continues to increase. In short, given the demand curve, relying on higher prices is a very crude way to affect behavior.

Without a goal,any road will get you there. Therefore, we need a goal, to decrase consumption by x percent each year for so many years until we reach a total reduciton of y percent. It would be more effective and less painful for the not so rich to institute a ration system with tradeable gas credits. This way, those who consume a great deal for whatever reason get their gas at a very steep additional price. Those who can or choose to conserve make money by selling their credits and or are rewarded directly and tangibly for their frugality.

One would be rewarded by this system in other ways. If one chose to take mass transportation, one would, in essence, be paid for that decision. The same principle would apply to the use of bicycles, feet, or just staying home.

Environmental groups could even use their resources, if they chose, to retire gas credits from the system, just as they do in programs like Terrapass currently.

There are no doubt people who would be willing and able to pay almost anything to keep their SUVs on the road. People like me could just stay home and reap a windfall for other's profligacy. Instead of screaming at them under my breath, I could just smile and say, "make my day".

W2,

I am with you. The CEO of AutoNation has recommended it -- raise the gas tax $.10 per year for 10 years. People will know it is coming and adjust. (Of course I would say $.25 per year for 10 years, but that is me.)Don't call it a tax, call it a National Security Energy Independence Fee.

Meanwhile, combine that with Amory Lovins' proposal to Congress for "fee-bates" but apply them to gas, not cars. Charge everyone the "fee" and then rebate it to those earning less than the median income.

I have to admit that though I am against raising taxes generally, raising the gas tax a dime a year for ten years is a good idea. It gets the poor people off of the road and lets me get to work quicker, and it will tend to encourage even middle class people to get a bit better mileage vehicles. The thing with Ford's choice of hybrid vehicles is driving me crazy though. How many police cars are there in the US? 500,000? Replaced every 4 to 5 years. Most of them are Crown Victorias, and guess how many cities would love to buy all hybrid Crown Vics? Nearly all of them. Conspicuous by its absence on the list of hybrid Fords coming out soon...

I'd be more worried about the bottom 80%.

Fuel economy meaured in MPG may not be making the gains we would like.

Fuel efficency is going up even if it is being put to use for faster acceleration etc rather than economy.

Emissions standards are getting better such than even the SUV's that everyone loves to hate are cleaner than cars x yrs ago.

It is expensive for car manufactures to design a new engine but they will tweek an existing design and get the most they can out of it.

Combine that with all vehicles getting bigger and heavier, and having more features and your fuel economy gains that could have been dont add up as fast.
Even "small" vehicles are getting larger, honda civic, toyota rav 4 ...

It ain't the weight, it's the horsepower. 50 years ago we did alright with large cars with 100 hp engines. When I was young and foolish I thought more power could help avoid accidents. Years of bus driving taught me that patience prevents accidents. High power just gets you to that accident faster.

W2:
Why is it so bad for a high number of miles to be driven? Especially in a high fuel mileage car? People in this country travel. I personally can think of very few things much more enjoyable than driving through west Texas or northern Arizona on a long trip. Also, high mileage delivers the goods in your stores via truck drivers. My father has driven over a million miles since 1996 delivering consumer goods across this beautiful country. And all a higher price for fuel would do to him is make his business more expensive to run (he spent over $40,000 last year on diesel for one truck).
People like my father need lots of fuel to deliver your Priuses (Prii?). Don't try to villify those who don't have a choice about consumption.

I think the idea should not necessarily be to take people off the road but to substitute CO2 producing, dependency increasing gasoline for something else sustainable. To do this probably requires a multipronged approach. Raising the fuel price with tax is probably part of it. Increasing mandatory efficiencies is another. Tax breaks and incentives are also valid and improving public transport is another option. Given a clear goal (as stated above) whether each policy helps can be tested more easily.

Ziv, I've been wondering the same thing for a while now-- why no hybrid Crown Vic? It's not just the cops either-- think of all the big city cabs that spend hours sitting in traffic or idling at the curb with the A/C running. Just an electric A/C compressor and idle shutoff system could probably save a ton of fuel for those guys. And if they switched the 4.6l V8 for the 3.0 or 3.5 V6 and a full hybrid system (aw heck, throw in some cylinder deactivation while you're at), they'd have something that these high mileage commercial and govt users would see pay for itself much more quickly than the average suburban commuter considering a Prius.

I can't fathom why they haven't done it.

Hybrid police cars would save a lot of money considering that they are on the road quiet often and would reach the required mileage to pay for the extra cost of hybrid fairly quickly.

As for the Crown Victoria. I can't believe that Ford are still building cars on an ancient ladder frame chassis platform that should of been retired 20 years ago. If Ford had any sense they would allow there Australian division to engineer a left hand drive version of the RWD platform they use for the Ford Falcon here in Australia which is considerably more technologicaly advanced than the old Panther platform. This is what GM is doing with Holden here down under with the next Commodore platform and will be used in GM North America vehicles to help GM build more appealing cars and hopefully become less reliant on SUV sales.

But from what I hear this is unlikely to happen because of political disputes between Ford Australia and headquarters.

I'm starting to speculate at this point, but I'm guessing that the reason there is no hybrid Crown Vic at the moment (or on the horizon) is that the Crown Vic is a fairly old design using a fairly old fashioned rear wheel drive chassis and overall body construction. Bringing full hybrid capabilities to that model would probably require a ground-up redesign. Meantime, the new Five Hundred sedan (my example of the month, it seems) is supposed to have an equally roomy interior and significant luggage space in the trunk. It is also slated to go hybrid within the next three years or so. I wonder if Ford is hoping to migrate taxi and police sales over to that platform.

Meantime, installing a displacement-on-demand V8 engine might be help those users who spend a lot of time on the highway. A start-stop micro hybrid system with electric a/c is also a good idea. But it seems as if GM has barked up those two trees more than Ford has, so I'd be surprised if Ford got those goodies into its cars anytime in the near future.

That's quite some bold claims being made by Al Giombetti. I wonder if he will get blasted by someone like Peter DeLorenzo by showing how arrogant Ford is, just like Mr. DeLorenzo bashed Toyota for being "arrogant" with it's LS600hL release.

Ford is hardly in a position
to be claiming hybrid leadership. Toyota's Highlander Hybrid *alone* outsold Ford's entire hybrid lineup for the month of April in US sales. The Highlander Hybrid also outsold Honda's entire hybrid lineup.

Including the newly released Camry Hybrid and GS450h, Toyota now has 5 hybrid models on sale in North America, with several more available in other parts of the world, including Hino diesel hybrid commercial trucks.

For April, 66% of all North American hybrid sales belonged to Toyota.

Again, I'm still puzzled as to exactly how Ford is able to claim hybrid leadership, especially in areas such as technical expertise and innovation.

Correction ... 66% of US hybrid sales, but you get the point.

Here in Vancouver police is switching to Impala (FWD V6) and taxi are switching to Prius.

Here in Western Australia police a few years back switched to V6 Holden Commodore sedans only. Before they had a lot of V8 Holden Commodores and I think also V8 Ford Falcons in there fleet. They were banned because of high speed accidents that have occured in the past that have killed police officers.

Police in other states still operate V8 Holden Commodores and V8 and I6 turbo Ford Falcons.

As far as I'm concerned large NA 6 cylinder sedans are all police need as high speed pursuits end up costing lives including those of innocent motorists caught in the middle. I'm not saying ban high speed pursuits completely but high speed pursuits to the extent of police needing high performance V8 sedans are not worth it considering the ultimate price some people pay.

I've also noticed media reporting on high speed pursuits has quietly dropped out so we don't end up having ridiculous situations like in LA where it is reported all the time which probably encourages some people because I can still here high speed pursuits come thundering down the nearest highway every so often.

Most taxis here are LPG Ford Falcons.

Oh yes and switching to more fuel efficient cars saves fuel/money/emissions etc.

Ford needs to get moving with the diesel hybrid it debuted at the auto shows!

Given the rather inelastic demand for gasoline

In the immediate term, demand for gasoline could probably be reduced to 80% of current demand with very little change in habits. We're talking about driving the speed limit and making sure your tires are fully presurized. I wouldn't call that relatively inelastic.

In the 5-10 year term, demand for gasoline is extremely elastic. Consumption *could* be cut 50% with very little change in lifestyle. That's a time frame in which
* People can move to a location that provides sufficient public transportation.
* People can move to a location closer to work, shopping centers, etc. to reduce consumption.
* People will replace a household vehicle. They can certainly purchase one with substantially better mpg than their current vehicle in nearly all cases.

This claim that gasoline demand is (relatively) inelastic is simply bogus. If gas prices stay near $3/gallon for a while, I'll bet that gas consumption per capita is reduced, as is ratio of gasoline consumption to GDP.

"* People can move to a location that provides sufficient public transportation.
* People can move to a location closer to work, shopping centers, etc. to reduce consumption."

Considering housing prices are in the 100's of thousands of $ and cars are in the 10's of thousands and yearly gasoline usage amounts to 1's of thousands of $
and intrest rates are on the rise ...

It would seem foolish to spend a few $100k to save $3k in gas as housing prices closer to "the city" sky rocket rather quickly.

(@ 15,000 mi / yr @ 20 mpg @ $3 gallon = $187.5 / month in gas costs)

Appart from the large citys near the coasts many areas do not have any public transportation much less "sufficient"

We can't all live in NYC.

We own a car that is basicaly the siv version of the common police car. It actauly gets about 30 mpg wich is amazing concidering how big it is.

In the immediate term, demand for gasoline could probably be reduced to 80% of current demand with very little change in habits. We're talking about driving the speed limit and making sure your tires are fully presurized. I wouldn't call that relatively inelastic.

Demand isn't what it could be. It is what it is, and in the short run, it is inelastic -- meaning, people don't reduce their consumption commensurate with the sharp and quick increase in price. It's because there are no quick substitutes for motor fuel for the vast majority of people, and much of their travel is locked-in with commuting and such. The fact that people could do something doesn't mean they do or will do something.

In the 5-10 year term, demand for gasoline is extremely elastic. Consumption *could* be cut 50% with very little change in lifestyle.

I wouldn't call it "extremely" elastic. It's all relative. If, for example, my local movie theater bumps ticket prices for the latest mediocre Hollywood release, demand will drop to zero, or very near it. But if the price of gasoline were to jump to $100/gallon tomorrow, people would still buy it, as they need to get to work etc. Over time, if the price of a good is high enough, substitutes which were formerly expensive may now be affordable, such that demand substitution can occur.

But again, elasticity has very little to do with what people *could* do and has everything to do with what they will do. Dealing with the "could" aspect is the job of entrepreneurs, not economists.