The EPA's new fuel efficiency standards have auto makers scrambling to produce electric and hybrid vehicles, but the higher prices of these vehicles deter buyers.
54.5 mpg by 2025 - that's EPA's new fuel efficiency requirement. In order to get there, most analysts believe electrification is necessary - and auto makers are responding, producing a dazzling array of hybrid, plug-in hybrid (or 'extended range EVs), and pure electric (plug-in) vehicles (EVs).
"Analysts do not expect the (hybrid and EV) segment to grow significantly this year: the combination of gas prices below $4 a gallon and higher upfront costs for the cars is not attracting consumers. But that is not deterring Toyota, Honda, Ford Motor and several European carmakers from introducing new hybrid and plug-in models.
However, hybrids and electric cars typically cost at least several thousand dollars more than their conventional counterparts. And most consumers want to be able to recoup the additional cost of an alternative-technology vehicle within a year, Mr. Anwyl of Edmunds.com said. At today's gas prices, the payback generally takes several years, if not more".
Of course, should gas prices take a sudden rise, the market and the regulation may converge. AAA predicts a 'tumultuous year' for gas prices, which may prove fortuitous for these emerging models.
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