Why Traditional Hybrid Cars Are Becoming Obsolete

To most of us, Toyota's snazzy Prius hybrid still seems like the cutting edge of cool, the latest and greatest technology in cars. But nine years after the Prius was introduced in the United States, some are calling it obsolete. "The hybrid is yesterday's technology," says San Francisco Mayor and recently announced California gubernatorial candidate Gavin Newsom. To be sure, Newsom has a political ax to grind—he's trying to lure electric-car makers to the Bay Area, which already is home to Tesla Motors, maker of a sexy electric roadster, and Better Place, another startup focused on greentech transportation. But Newsom has a point. A new generation of carmakers is shunning the traditional hybrid format in favor of pure electric powertrains (driven completely by batteries) or "plug-in hybrids." Indeed, the auto industry is being disrupted by rapid waves of new technology, a phenomenon that feels normal for the folks in Silicon Valley but is perhaps unfamiliar for the folks in Detroit. "We are on the cusp of a period of technical innovation like the automobile industry has never seen," says Mike Jackson, CEO of AutoNation, the largest U.S. auto retailer. "There will be more change in the next five to 10 years than there was in the last 100."

The first victim of that rapid change may be the Prius-style hybrid. "The traditional hybrid is an in-between solution as we make the transition from gas engines to plug-in hybrids," says Henrik Fisker, founder and CEO of Fisker Automotive, an Irvine, Calif.-based company whose new $87,500 sports sedan, called the Karma, uses a plug-in hybrid powertrain. Fisker, a legendary automotive designer who worked at BMW and Ford before striking out on his own, says the Prius-style hybrid is "very complicated" and "doesn't make sense." While the Prius delivers 46 miles per gallon, Fisker says the average owner of a Karma will get 100 miles per gallon—and those who rarely travel more than 50 miles at a time will do even better.

That's because in a traditional hybrid, like the Prius, both the gas engine and the electric motor drive the wheels. In a plug-in hybrid, you have both an electric motor and a gas engine, but only the electric motor powers the wheels. The gas engine only generates electricity to recharge the battery pack. If you don't travel beyond the range of the battery pack—about 50 miles—the gas engine never starts up, and you run in pure electric mode. In theory, some owners of plug-in hybrids might never use the gas engine at all.

Even the automakers in Detroit are jumping on the plug-in hybrid bandwagon, though they don't use that name. The Chevrolet Volt (due out in 2011) uses a plug-in hybrid powertrain, but General Motors calls it an "extended-range electric vehicle." Chrysler calls its forthcoming line of plug-in hybrids (due out in 2013) "range-extended electric vehicles." Chrysler is also making pure electric cars, like its Dodge Circuit EV roadster, which has no gas engine and can travel only 150 miles before needing a recharge. One thing Chrysler hasn't announced is a traditional hybrid like the Prius. Ford and GM both make Prius-style hybrids, but they represent a tiny percentage of overall sales.

Others are doing an even more radical rethinking of the automobile. Better Place, in Palo Alto, Calif., intends to operate networks of "switching stations" where owners of pure electric cars can swap out a low battery for one that's fully charged. You'll pay for the car the way you pay for a cell phone—some money upfront, and then a monthly subscription fee, based on how many miles you drive. Who knows if it will work? But it's an example of the kind of innovation that outsiders and newcomers are bringing to the industry.

No surprise: Toyota gets a bit vexed when it hears auto-industry newbies bashing the Prius as outdated. "The fact that the Prius has been around for 10 years does not mean it is old news or obsolete. In fact, it keeps getting better and better," says John Hanson, a company spokesman, adding that next year's model will get 50 miles per gallon, up from 46mpg in the current model. The most outdated thing about a Prius is its nickel-metal hydride battery. The new pure electric and plug-in hybrid cars use lithium-ion batteries, which can store more energy. Hanson says Toyota is doing research on lithium-ion batteries, and plans a plug-in hybrid prototype for next year. But he insists that for now its tried-and-true batteries are best, and that lithium ion isn't ready for prime time. "Battery science is not where it needs to be," he says.

Prius sales in the U.S. are already slumping—they were down 56 percent in March, in part because of the lousy economy and also because of lower gas prices. Which raises the question of whether any of these new car technologies will succeed as long as gas remains cheap. Jackson, from AutoNation, says we should levy a steep fuel tax and pump the money we raise into new car technologies. That sounds like a great idea. But even hard-core greenies like Newsom don't dare endorse it. "That requires someone to give up their political future," he says. "There's nobility in that. And I'm all for nobility. So I'm looking forward to someone else doing that."

Which means one thing: like it or not, the dirty old internal-combustion engine probably will remain with us for a good long time.