The problem is the $10,000 cost of the extra lithium ion battery. At $4/gallon the fuel savings amount to only $200 annually. Seattle's experience is by no means unique. Google's highly publicized experiment with PHEVs is yielding similar results with its fleet of Priuses averaging 54.9 mpg and a pair of plug-in Ford Escapes getting 37 mpg. For all practical purposes, existing hybrid vehicles can't reasonably be driven as electric vehicles except at excruciatingly slow rates of acceleration. Given the cost differential, it seems like PHEV conversions may be an economic dead end (One of Toyota's PHEV Priuses is pictured [ UPDATE: image removed at the request of Toyota PR). The Seattle and Google fleets feature vehicles converted by third parties).
[Source: Seattle Times]