While everyone these days wants a more efficient vehicle, and we know that for many applications hybrids are a good way to get that efficiency, the inescapable reality is there is an up-front price premium that must be paid. Hybrids are more complex and have more parts than conventional vehicles. If you add a battery, electric motor, variable transmission and all the associated electronics and wiring, it will always be more expensive than the same car without that stuff. Carmakers and suppliers are working overtime to drive cost out of those systems. Between cost reduction efforts and rising fuel prices, the payback time for saving that money in reduce fuel consumption is decreasing.

Battery supplier EnerDel wants to be part of reducing the economic payback and the company predicts that it will be cut to two years before long. The company plans to have a lithium ion battery production facility running by 2010 that has a capacity of 300,000 packs a year. Right now, many people trying to jump out of SUVs into smaller hybrids are finding the going particularly rough because with so many used trucks coming on the market with almost no demand, the resale prices are dropping by the day. EnerDel already has a contract to supply batteries for Norwegian EV maker Th!nk and expects to sign up two more OEMs before the end of the year.

[Source: CNet]

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