Hybrids offer more car with less guilt

Ford Motor Co. is to be commended for launching the new hybrid Escape, the world's first gas-electric hybrid sport-utility vehicle. Incorporating a sophisticated engine system that shifts between battery power for low-emission, in-town driving and gasoline power for faster speeds, the Escape achieves about 33 miles per gallon. This is almost double the mileage of Ford's popular Explorer. The Escape delivers what many Americans want -- an integration of SUV functionality and prestige with a rational concern about America's oil dependency and its impact on our national security, environment and future. Escape offers more car with less guilt.

The Escape is Ford's first hybrid vehicle, and the company has announced plans for additional models. Both Chrysler and General Motors, however, have been slow to accept hybrid technology, claiming that Americans won't buy fuel-saving cars. Indeed, the first hybrid cars launched five years ago by Honda and Toyota were small and lacked power. But the Japanese have since improved on the technology.

Toyota's second-generation hybrid Prius is more spacious with added zip, and it won Motor Trend's 2004 "Car of the Year." This past year, demand for the Prius was so intense that buyers had to get on six-month waiting lists and pay thousands of dollars over the sticker price to get one. In short, hybrids are hot, and Toyota is increasing production to meet growing U.S. demand.

Though Ford has been a maverick in Detroit, it nevertheless faced a number of technological delays in getting the hybrid Escape to market. Indeed, the carmaker was the target of consternation earlier this year when it announced that it was licensing components of Escape's hybrid system from Toyota. Couldn't Ford come up with its own hybrid technology?

Sadly, Escape's belated debut means Ford's monopoly on the hybrid SUV market will be short-lived. Next April, Toyota's Lexus division will launch its own hybrid SUV, the RX-400h. The upscale SUV will have greater power and acceleration over the regular RX-330 on which the new hybrid is based. Later, Toyota will release the hybrid Highlander, another high-performance SUV, which will compete directly with the Escape. Both the RX-400h and the Highlander will be Toyota's third generation of hybrids, and drivers will be drawn to Toyota's latest technology.

Interestingly, Ford isn't the only company licensing Toyota's hybrid technology. Nissan is as well, and Porsche just announced that it is seeking Toyota's hybrid system for its Cayenne off-road vehicle. According to Reuters News Service, a Porsche spokesperson openly admits that developing hybrid technology would be difficult for the German automaker. Another report says that Toyota is only licensing its earlier hybrid technologies to other auto manufacturers, keeping its latest innovations for its own car line up. Consequently, Toyota is rapidly setting the standard for hybrid technology, and through licensing, it is destined to control and profit from many of its rivals' hybrid vehicles as well.

How did Toyota move so far ahead? Detroit's myopic view of American car buyers partly explains it. But Toyota also trekked a cunning path in pursuing the innovation. Toyota launched its first generation Prius as a quirky, compact car that was priced so low that Toyota took a financial loss on initial sales. This signaled to most car makers that hybrids were unprofitable eco-experiments that would never appeal to SUV-loving Americans. With their rivals looking the other way, Toyota improved and transformed the technology into an envied, high-performance innovation.

Car manufacturers are rethinking their global strategies in the face of higher oil prices, continuing Middle East instability, and the recent ratification of the Kyoto Protocol, requiring most industrialized nations to reduce their carbon emissions. Toyota's hybrid technology is fast becoming the sought-after alternative to the industry's gas-guzzling ways, and Toyota looks to be all too happy to dominate the industry with it.

During the 1970s oil crisis, Americans disparaged Detroit for not delivering quality, fuel-efficient cars they suddenly craved. When Japan stepped in to satisfy the demand, Detroit never regained its lost market share. With Detroit's late entry into the hybrid market, history may be repeating itself.

Edwin R. Stafford is an associate professor of marketing at Utah State University, Logan, who researches how cleaner innovations can transform industries.

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