In another 10 years or so, you might look back on 2004 as a turning point in American transportation. Perhaps you'll see it as the time when a promising technology finally carved out more than a toehold in the marketplace. Call it "the year of the hybrid."

Hybrid powerplants --technology that couples a gasoline engine with an electric motor for better mileage and less pollution-- aren't new. They hit the U.S. market in 1999, when Honda introduced its two-seat Insight and Toyota debuted its five-passenger Prius. Two years later, Honda offered a hybrid powertrain on its popular Civic compact. By comparison, however, this year brings a veritable flood of new entrants. At least five automakers will introduce combination gas-electric vehicles, including sport-utility vehicles, pickup trucks, and a top-selling family car. What's more, Toyota has redesigned its Prius, making it larger and even more fuel-efficient. As if to officially recognize hybrid technology's coming of age, the 2004 North American International Auto Show in Detroit named the new Prius its "Car of the Year."

David Friedman, research director of the Clean Vehicles Program at the Union of Concerned Scientists (UCS), calls such progress "stunning."

"Five years ago, most American consumers didn't know what a hybrid was," he says. "Now, one is named Car of the Year. Our country faces huge problems with oil dependence and the production of greenhouse gasses. But the progress and potential of hybrid technology represent real hope for the immediate future."

A Question of Degree

According to experts, not every vehicle called a "hybrid" deserves the name. Automakers have incorporated hybrid technology to varying degrees, with decidedly different results. Most experts agree that, at a bare minimum, a hybrid must have an electric motor powered by a metal hydride battery, which is recharged by a technique known as "regenerative braking." It captures energy ordinarily lost through braking, converts it to electricity and stores it in the battery. Some hybrids also recharge their batteries from a generator connected to the gasoline engine, much like the alternator in a conventional car. This self-charging ability means that you never need to plug in a hybrid as you would an electric car.

In the simplest application of hybrid technology, the gasoline engine shuts down instead of idling at a red light, for example. The battery supplies power to run accessories and the electric motor, which restarts the engine when you press the gas pedal. General Motors uses such a system in some of its Chevrolet Silverado and GMC Sierra pickups to improve gas mileage by about 12 percent. As Friedman sees it, this technique merely represents an imaginative use of conventional technology --"a beefed-up starter motor combined with an alternator"-- and doesn't qualify as a true hybrid.

"Mild hybrids" use their electric motors to move the car under certain circumstances, achieving better performance and fuel savings. But mild hybrids such as the Honda Insight and Civic Hybrid never shut off their gasoline engines. Their electric motors provide extra oomph only when you accelerate from a dead stop, pass or merge on the highway. The best mild hybrid should increase fuel efficiency by 35 percent or more compared with a similar-size conventional vehicle.

"Full hybrids" can drive solely under electric power at least some of the time, achieving the best gas mileage of all. For example, the Toyota Prius shuts off its gasoline engine completely not only at stop lights but also in stop-and-go traffic, running just on its electric motor. At higher speeds --roughly 15 mph-- the gasoline engine kicks in automatically. The Ford Escape hybrid SUV, due later this year, will use a similar system.

Why Hybrids?

Besides great gas mileage, hybrids offer other big advantages. Because they use smaller, more efficient engines, true hybrids can meet very stringent emissions standards. Smaller engines heat up quickly (reducing start-up emissions), reach their peak efficiency zone faster, and stay there longer.

Hybrids aren't completely "green," however. For one thing, they still burn fossil fuel. For another, their "idle-off" feature requires frequent restarts -- and the dirtiest emissions usually come during and right after starting. However, most engineers consider this and other hybrid pollution problems manageable.

Even better, hybrids don't demand that you sacrifice much performance for fuel economy. Because electric motors produce their best torque at relatively low engine speeds (below 2,000 rpm), a well-designed hybrid can accelerate quite fast from a dead stop. And, because its gasoline engine shuts off at idle, it's exceptionally quiet and vibration-free around town.

Market in Motion

Nowadays, the market for hybrids has evolved beyond gee-whiz technophiles and passionate environmentalists to just plain folks. "At first, forward-thinking people came in to look at the Prius," says Dennis Dagger, general manager of Smithtown Toyota on Long Island. "Then there were those who were interested because a lot of famous people like Larry David, Leonardo DiCaprio and Cameron Diaz had one. Now we're seeing ordinary buyers who used to look at Corollas or Camrys. They're not what I would call 'Wall Street environmentalists.' They're regular, middle-class people shopping in the $15,000 to $20,000 price range."

Statistics confirm those observations. A recent study by J.D. Power and Associates reveals that more than 60 percent of new-car buyers would "strongly" or "seriously" consider a hybrid for their next purchase.

AAA member Gene Pritz may represent today's typical hybrid buyer. He bought a Prius for a combination of environmental and economic reasons. "I've always been very conscious of the environment," he admits, "but I owned an SUV and was tired of paying $20 a week for gas." Now he ranks his satisfaction with the Prius as 8 on a scale of 10.

Most others would agree. According to a survey conducted last year by the Oregon Environmental Commission, 98 percent of hybrid owners would recommend their vehicle to a friend.

Realistic Expectations

Despite such overwhelming satisfaction, owners find a few thorns among their hybrid roses. Surprisingly, their No. 1 complaint is gas mileage. Nearly 8 percent of the hybrid owners in the Oregon survey said that their hybrid doesn't live up to its advertised fuel economy. In fact, separate surveys indicate that Prius owners get 45 to 49 mpg in real-world driving--not 55 as promised by the EPA ratings.

The reason for this discrepancy lies in part with the U.S. Environmental Protection Agency's ratings, says Friedman. The method that EPA uses to estimate fuel economy usually overshoots the real-world mark by about 10 percent. "If you have a vehicle that's supposed to get 20 mpg and the estimate is off by 10 percent, you're really getting about 18 mpg," he says. "Most consumers wouldn't notice it. But if a hybrid is supposed to get 50 or 60 mpg, suddenly 10 percent seems a lot larger."

Furthermore, explains Friedman, hybrids require drivers to practice good behind-the-wheel habits to maximize mileage. "Because hybrids use regenerative braking, you won't get as much benefit if you brake hard and fast," he says. Slowing down with your foot off the accelerator and then applying the brakes gradually--sound practice in any car--makes an even bigger difference in hybrids. Using the air conditioner and taking short trips also lower a hybrid's optimum fuel economy. Finally, "the battery's capacity tends to go down in cold weather, so the hybrid has to rely more on the engine," says Friedman. "That will affect real-world fuel economy to some extent, too."

Hybrids present other behind-the-wheel challenges. Although they accelerate well at low speeds, they deliver less torque at higher engine speeds--which translates to slightly reduced passing performance. This doesn't bother most drivers. "The pick-up and passing response are adequate for me, " says Prius owner Pritz. "But then, I'm not interested in going to 60 mph in three seconds or so."

Also, as noted in a recent report by UCS, hybrids have difficulty sustaining high speeds on very long, very steep grades; the battery drains, the car downshifts, and the gasoline engine assumes more of the load. For the same reason, hybrids struggle to tow loads over a ton. Here again, most people seldom encounter such situations or need such heavy-duty towing.

A Hard Sell

With sophisticated energy-saving technology, the new generation of true hybrids will cost more than conventional gas-powered vehicles. No one really knows how much more. At press time, manufacturers hadn't set prices for the Ford Escape and Lexus RX, the next true hybrids due to hit the market. But most observers expect hybrid versions to cost $2,000 to $4,000 more than their conventional counterparts.

Such a price difference may change the whole sales dynamic. With consumers considering two models side by side --one conventional, the other a premium-priced hybrid-- will dealers make the extra effort to educate customers about the differences? For instance, will dealers invest the time to explain when a buyer can expect to recoup the higher initial cost in gas savings?

Some observers note that hybrids appeal to knowledgeable consumers who've already done their homework and know what they want when they walk into a showroom. In that sense, the cars have "sold themselves" so far, and sales personnel need to do little but write up the orders.

After Gene Pritz bought his Prius, he had to resort to the Internet and e-mails from the manufacturer to answer questions that his dealer couldn't. "They didn't seem to know much about the car," he says of the dealer, "and the answers they gave me weren't always the right ones."

Uncertain Tax Incentives

Realizing that potential gas savings alone may not encourage buyers to embrace hybrid technology, governments have tried tax incentives. New York State had offered a $3,000 sales tax credit and a $2,000 income tax deduction for hybrid purchases, but those breaks expired on Feb. 29, 2004, and Dec. 31, 2003, respectively. As this issue went to press, the Legislature was considering an extension of the sales tax credit to Feb. 25, 2005, and the income tax deduction to Dec. 31, 2004, as part of the pending budget bill.

Federal tax incentives also face an iffy future. Currently, the law allows a $1,500 income tax deduction for hybrids purchased this year. Because the federal tax break comes as a deduction rather than a credit, the amount you save depends on your tax bracket ($420 if you pay 28 percent, for instance, or $495 in the 33 percent bracket). Furthermore, the hybrid deduction shrinks to $1,000 for purchases made in 2005 and $500 in 2006. It disappears altogether in 2007. (Whether you itemize or not, you'll find precise instructions on how to claim the deduction at www.fueleconomy.gov; click on Hybrid Vehicles under Possible Tax Incentives in the Special Features box.)

But that may change. The energy bill now stalled in Congress contains generous federal income tax credits --not deductions-- for hybrid vehicle purchases. However, they're tucked away in a huge, politically divisive bill with an uncertain fate in this election year.

What the Future Holds

With fuel cells still 10 or 20 years away even by the sunniest predictions, hybrid technology represents the best available bridge to a truly pollution-free vehicle. Still, UCS emphasizes that hybrid technology requires a real commitment by manufacturers, the government and consumers to succeed.

This year brings the first signs of such a commitment, especially from carmakers. "Up until this point, hybrid technology was confined to the compact car segment with the Honda and Toyota models," notes Friedman. "But this year, consumers will have two SUVs and a family car among their hybrid choices. That blows the image of hybrids wide open." If they perform as well in the marketplace as the Prius has so far, then 2004 will truly become the year of the hybrid.