For hybrid sales to keep climbing 2 things have to happen:

1) battery supply addressed

2) performance 2X of conventional

#1 should be obvious.

So long as there are many choices of 40-50mpg convnentional cars, Prius and Civic Hybrid doing 55mpg are just not very appealing. They need to be close to 100mpg. Hybrid will always cost more due to batteries and electronics. For them to justify that price premium which often can be significant, they must offer a substantial efficiency improvement. A small 20%-30% just doesn't cut it. They need at least 50% better efficiency, ideally 100% better.

Looking at the current Prius and Civic Hybrid having tiny 1-2 kWh batteries they will never be able to offer significant efficiency improvement. Thus the 1st step is to use a bigger battery. I imagine that 3-4 kWh is a minimum.

So that means that for the time being hybrids are stuck at the present level of 2%-3% of car sales. As pointed out Volt with its huge battery is coming in the middle of a recession so won't sell much.

Still GM hybrids will use a lot of Volt tek, so they may offer some significant improvements.

The next Honda hybrids that are supposed to have a small $2K premiums over conventional must ensure that pricing around the world. You cannot offer $2K premium in the US, but to boost the margins demand $5K premium in Canada and elsewhere. That won't work.

Hi Anon(July 3,2008-8:41PM)... My last 3 cars & motorcycle, I OVERALL AVERAGED well OVER the EPA HIGHWAY ratings. My highway trips are way, way over the EPA highway ratings. I give tips to people who raise their MPG 10% to 15%. My 41.5 to 42.6MPG (as you stated, ~10MPG over the EPA ratings) were over 3000, 4000, & 5500 foot mountain passes. The 45.1MPG included one 1400 foot mountain pass & two 600 foot hills ending up at my origin,~100 foot altitude. Yeah, I'm surprised by the Accent too, as you obviously are. I've heard reports from other feather footers that Honda Fit can come close to 45MPG(~ 11MPG over the EPA) & two Toyota Yaris reports said their Yaris's got 48MPG(~ 12MPG over the EPA).

Clearly, most people are accelerating & driving too fast, don't know how to feather foot their gas pedals, don't know how to approach hills to keep from losing lots of MPG, are too concerned with their fast paced lives to slow their fast paced cars, or ever look at the scenery. I'm not saying to stop & smell the roses, but while driving past the roses, you should roll the window down, while slowing down & see if you can get a brief whiff of the flowers.

I'm not a hypermiler, but do care how much pollution comes out my tailpipe. & don't let anyone tell you that what comes out the exhaust pipe is clean fresh air.

This is an interesting phenomenon, one that I cannot fully explain, but I do think the fuel economy advantage to increase in price ratio is poor for many hybrids. In Europe, where virtually every car is available as either gas or Diesel and where the Diesels carry either a small premium or none at all, Diesels outsell gas. In France, around 70% of the new car market is Diesel. Hybrids don't do as well, for various reasons, likely: not every model is available as a hybrid so there is more choice in Diesel, many Diesels get mileage similar to hybrids, the Diesel premium is less than the hybrid premium. Also Diesel fuel is not higher-priced than gas, unlike here. We don't have much choice in Diesel here, although that will change, with a few companies planning to introduce 50-state legal Diesels in the coming years. Others, notably GM, who sells some nice Diesels in Europe, stubbornly refuse to make Diesels available in the US (for cars, not trucks). If you look at the price of used Diesels in the US, you will note there is the same problem as for hybrids: some asking prices are in excess of the new car price for a car that is several years old.

Another explanation for weak hybrid and weak car sales in the US may be shown by my using two friends as examples: One just got engaged and moved very far from work. He was thinking of switching jobs or trading in his SUV for a small car but instead he bought motorcycle for his commute. Another one is on the wait list for the Mariner Hybrid (Mercury version of the Ford Escape). He may be switching jobs soon. Instead of driving to work every day, he would take the train and use a scooter to get to the train station. He would take his name off the list for the Mariner, saving a whopping $35K, and use his current SUV only on the weekends. Ok, this is only anecdotal evidence, but it shows two things: most people care about saving money, not fuel; there are ways to save money, and lots of it, that don't involve buying a new car, whether conventional, Diesel or gas, which normally requires a large upfront payment, and in the case of fuel efficient cars in short supply, an even larger upfront payment.

Hybrids DON'T pay off.
Times are getting harder and there are less limosine liberals out there to pay the $5,000 premiums.
Civics (non hybrids) that get 38mpg on hwy are flying out of the showrooms as are fits.

"Looking at the current Prius and Civic Hybrid having tiny 1-2 kWh batteries they will never be able to offer significant efficiency improvement. Thus the 1st step is to use a bigger battery. I imagine that 3-4 kWh is a minimum."

Please remember Prius history.
NHW10:288V*6.5Ah=1.87kWh
NHW11:274V*6.5Ah=1.78kWh
NHW20:202V*6.5Ah=1.31kWh
Toyota Reduced the battery capacity model by model, but both fuel economy and performance were increased.
That's the innovation!

How many times does it take to permeate. Despite EU propaganda their diesels are not "clean diesels". They are polluting pigs.

The only even merely "cleaner diesel" is one equipped with T2B5 complaint emissions controls that are some ten - twenty times cleaner than EU "clean diesel" phonies. And that T2B5 merely makes it as clean as the dirtiest gasoline powered car with a catalytic converter. Hardly something to brag about.

Peter

In the UK Diesel prices used to be the same as petrol but not anymore the price is now around 10% to 12% higer in my area. ( Hamphire )

There are several problems right now for those of us who want high quality cars that are efficent. These issues go beyond the current supply problems of the existing models.

1. Can someone please build a decent hybrid? Maybe a small entry-luxury sedan with mileage equivalent to a Prius, or a mid-size, sporty looking wagon. The hybrids with mediocre mileage and V6 performance missed the mark (Accord, Highlander and the Lexus models). I just don't like the image of the Prius "hey, look at me, I'm cool and green." We need a broader selection. It will happen.

2. Because my perception is that better (for me) cars will be out in the next few years, I'm chosing to drive my current car into the ground. By a back of the napkin calculation, this seems to save more carbon than buying a new, hyper efficent car. In 4 more years I will be buying a new car, and I will buy a car with 35+ mpg EPA combined mileage.

It seems, based on conversations I've had with folks on the street, that many people are in the same boat as me. I'm ok with this, as the car industry has long lead times for new models. They are now starting to develop a full line of cars for the US market that are more efficient.

We will eventually get more efficent cars due purely to consumer demand and the economics of expensive oil, but waiting sure is hard. Even though I have libertarian views on many gov policies that affect individuals, I'd really appreciate stronger government leadership on CO2 emissions since the effect on society as a whole is so profound.

It seems like market forces are usually lagging forces. We wait until something gets so bad and until there is so much profit in it before anyone even considers doing anything. Then they look for government assurances that there will be no downside risk. There better be a better way than this or we are all doomed.

I don't doubt there may be shortages of some components to make the batteries. However the shortfall in production is a problem encouraged by the Toyota manufacturing cycle.
Since the 2009 MY is to be a short one - the 2010 redesign starts in January next year - it's reasonable to expect reticence on the part Toyota to start the building of a new line for the current NHW20 model and then to have to tear it down months later. I was told by someone, from the Corolla plant, that over the years it has been policy to throw out all the robots etc at the end of every five year manufacturing cycle. This ensures that the new manufacturing machinery will therefore have the latest robotics and programming along with all new programs and computers. In this way Toyota can avoid ending up with the legacy costs incurred by dated and worn equipment that would pose a 'spares' and reprogramming nightmare.
In this case the prospect of discarding brand new equipment against the possibility of losing sales is a risk that they are mitigating by selling off their future production, thus the long lead times. They must be hoping that eventually customers will be so close to the 2010 release date that this 'leakage' will become minimal.

Should Prius buyers be holding out for the new design ? For quality and reliability the quandry is that purchasing now will obtain a product that is guaranteed to be the most well built of the series. They have had five years to get it right, while for the new model there's always that possibility of a few initial bugs. For technology what then is the draw if Li-ion batteries are not coming in this release ? Well the new model will be getting the new-for-2007 1ZR-FE engine with dual VVt-i, again in Atkinsonised form. It's not clear whether this is just a place keeper for the 1NZ-FXE which first saw light in 1997 or whether the extra 20Hp this engine produces will be utilised. Probably, as a buyer, I would hope that this new 1.6L engine would have better fuel economy than the outgoing 1.5L. This would be a good time to trade up if you have a Gen I (NHW11) else the next milestone is Li-ion.
Yes Li-ion. The story of the Prius so far, as Ken's post shows, has a history of designers trying to reduce the energy storage without sacrificing power. This is because the Prius is not about being an electric car but being an electric transmission. It showcases what you can accomplish with a small engine and a battery assist. Unfortunately, in my opinion, consumer demand is pushing towards the Plug-in Prius. Although when the time comes I think few consumers will pony up for a 16kwhr battery of Li-ion or NiMH unless govts make significant tax rebates. That is to say the govt will step in and distort the market.

A market which won't be including the EV-1.
Surprising because lead acid with an EV-1 now makes perfect sense when you run the numbers. Compare a commodity 72A-hr at 14v holding 1.0 Kwhr priced at $100 to the Prius with its new price-reduced 1.3Kwhr NiMH at $3000. Now multiply both those prices by 10. Get my drift ?

Furthermore if the depth of discharge was drastically limited for the EV-1, in just the same way as the Prius and Volt, there would be probably be zero chance of failure.

The "boutique chemistries", as I like to refer to them, have excellent Power capability compared to lead but in their current packaging configuration they store about the same Energy for equal weight. Therefore if the 21Kw of POWER is OK using one of these 1.3Kwhr batteries then the extra kilowatt-hours of ENERGY you need for a PHEV can be added by a lead-acid system at a 90% savings over the other chemistry. If you pile on too much lead of course then the POWER capability of the lead-acid system itself grows to where it can subsume the role of the "boutique battery" itself. Which in the case of the EV-1 is what happens giving this vehicle 0-60 in 8.5secs as well as the 70/90 mile city/hiway range desired.
I am not making a case for the EV-1. Just observing that a successful vehicle will have to be an affordable one also.
T2

This is a supply issue - if there were more available Prius's, Camry Hybrids, Civic Hybrids and Ford Escape Hybrids they would sell more, but there aren't. Toyota didn't increase Prius production numbers this year, (I'm guessing Honda didn't do much with the Civic Hybrid numbers either), Ford only makes 24000 or so Escape Hybrids and has for the last several years (because they choose to do so - it shares the line with regular Escape's and they were making more money with the regular Escape's). Here's how to look at it, with roughly the same amount of production compared to last year, look at the sales for the last 4 months from last year compared to this year - they're just spread out a little more even (lower) this year because demand isn't going up and down, its exceeded supply and the extra vehicles from the winter were sold earlier in the year (that peak didn't happen till June/July last year). Normal, non hybrid vehicles, can have their production increased much more easily as they aren't constrained by mid term planning reqs of battery production (which is why we have to wait till next year for lots more Hybrids). BTW, we need them all, hybrids, small cars you name it and we need them faster.

Ford might be looking at their profit margins. The Escape hybrid at a selling price point may not be as profitable as a loaded V6 Escape. But when you are going out of business because no one will buy those profitable V6 Escape SUVs, then I would say that may be missing the key point of the analysis.

Is the Prius suffering end of model syndrome. Anyone who wants a green car needs to hold off till the next Prius or the Volt or a host of other vehicles coming in 2009-2011.

Personally, we're hoping for a Smartforfour electric cabrio as a second car.