At the same time Toyota was announcing its hybrid technology product plans for the next five years Tuesday, DaimlerChrysler representatives were in Tokyo to promote their clean diesel technology for the Japanese market. Like the U.S., Japan has never embraced diesels for passenger vehicles, while fuel prices in Europe have driven diesel cars to about a 50 percent share of the new-car market.

Hybrids have yet to take off in Europe the way they have in the U.S., because diesels achieve similar fuel economy and low CO2 emissions much more cheaply. In the U.S., EPA regulations and high-sulfur diesel fuel have kept diesels to a small part of the product mix, although the availability of low-sulfur diesel fuel starting in 2006 is encouraging DaimlerChrysler to take a run at the U.S. with its clean diesel technology.

Toyota's take on the future of the two technologies is that upcoming tighter emissions regulations, particularly in the U.S. and Japan, will require more advanced (and more expensive) diesel technology. At the same time, Toyota says it is on track to halve the cost for hybrids. With the diesel-hybrid price gap narrowing, and the fuel efficiency and ultra-low emissions potential of hybrids, Toyota sees the balance tipping in its favor before too long.

[Source: Reuters]

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