At present, hybrid gasoline technology appears to be the preferred route in the United States, not least due to its attraction as a visible badge of green awareness amongst higher income purchasers. Many original equipment manufacturers plan to launch hybrid products in the next few years, but the report highlights that this technology faces substantial manufacturing cost penalties, which are unlikely to be eroded even in mass production. Diesel has a clear cost advantage over hybrid, even when fitted with the type of complex exhaust after-treatment technologies necessary to meet future, more stringent emissions regulations.
Diesel already dominates in Europe. The conditions may now be right for a big acceleration in diesel sales in the North American market. Ricardo forecasts that combined diesel and hybrid gasoline will represent 15 percent of the U.S. light vehicle market by 2012, with sales of diesels outstripping gasoline hybrids by 1.5 million units versus 1.2 million. UBS highlights that European automakers and a number of global suppliers look set to benefit from the diesel trend.