Building a Better Hybrid
If there's one single explanation for the bold new deal between GM and DaimlerChrysler to develop advanced gas-electric hybrid technology, it's the Toyota factor. Neither GM nor DaimlerChrysler has a genuine hybrid vehicle on the market. Toyota has offered the Prius since 2000, with typical mileage in the mid-40s. And in 2005 the No. 1 Japanese automaker plans to offer hybrid versions of its Highlander SUV, its Lexus RX330 crossover, and perhaps even the bestselling Camry.
"Toyota got ahead of the domestics," acknowledges Larry Burns, GM's vice president of research and development and planning. "That's obvious."
Hybrids aren't the only alternative to conventional gas-powered engines. DaimlerChrysler is pushing new diesel technology that's clean and efficient. GM spent nearly $1 billion in the 1990s on electric vehicles and is now researching hydrogen-powered fuel cells. But the Prius has been a surprise hit while other technology evolves. "Clearly this is a success that has to be captured," says Chrysler CEO Dieter Zetsche.
GM and Chrysler hope to "leapfrog" Toyota's hybrids--along with those built by Ford and Honda--with a two-motor system that offers the power and safety of a gas engine with better fuel economy. Both companies plan to offer hybrid SUV s by 2007. But Toyota's green runs deep: It earned nearly $11 billion in profits last year, enough money to gamble on cars like the Prius.
Check out car reviews at www.usnews.com/auto -Richard J. Newman
This story appears in the December 27, 2004 print edition of U.S. News & World Report.