Reaction to Ford Motor Company's lessened focus on hybrid technology and switch to ethanol has been strong. Treehugger, the websource for the environmentally-conscious buyer, points to the Alternative Fueled Vehicles Rule of 1998 and 2004 as one reason for Ford's change of heart.
The federal rule, which simultaneously encourages automakers to develop alternative-fuel vehicles while avoiding penalties, would be easier to comply with with more flex-fuel vehicles than hybrids. Ut would be a simple matter for Ford or any other automaker to update its vehicles to accept the ethanol and retool its factories to build them. Hybrid systems, with their complex gasoline-electric systems, are considerably more expensive to produce.

Toyota, the premium manufacturer of hybrid vehicles, has stated it will also pursue ethanol-powered engines as well as research into plug-in hybrids. 

[Source: New York Times via treehugger]

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