A new study conducted by Carnegie Mellon University finds that subsidizing plug-in hybrid vehicles with smaller battery packs promises better returns on investment. The study suggests that since vehicles with smaller battery packs retail for significantly lower sums than those with bigger battery packs, these smaller battery pack vehicles will then sell more units, thereby providing a greater return on investments. The study argues that funding these less expensive, more commercially viable vehicles would lead to a far more rapid and significant reduction of harmful greenhouse gas emissions by replacing more gas-powered vehicles off of the road.

While the researchers’ logic is indeed sound, this logic hardly seems too sound a basis for future funding decisions as it is specifically those more expensive, larger-battery pack plug-in vehicles which need the most funding and subsidization to make perfecting this technology feasible for automakers.

Source: Carnegie Mellon press release

Read More:

The published results of the study  (pdf)
An interview with Prof. Jeremy Michalek at Bloomberg 
Further analysis and discussion on the Green Autoblog
Further analysis and discussion of the cost issue in general at Hybrdicars.com

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