Corrected on 1/16/08: An earlier version of this story incorrectly reported how soon Toyota expects to sell a million hybrids a year. The car company says it will do so in the next decade.
It's not a car show anymore. It's a science fair.
The Detroit auto show has traditionally been a manhood contest among carmakers trying to out-horsepower one another. But the geeks have taken over. Every manufacturer is boasting about green technology that will save the planet, displace petroleum, and delight customers. General Motors executives have been giving primers on ethanol chemistry and battery science. Chrysler announced its muscular Hemi V-8 engine will morph into a mannerly hybrid. Even Ferrari presented a car with "Bio Fuel" painted on the hood.
Hyperbole always dominates this annual bragfest, but this time the automakers have good reason to deliver on their promises. For one thing, $3 gas is starting to look permanent, raising the bounty for anybody who comes up with alternatives. The government has upped the ante by hiking gas-mileage standards, which will force automakers to seek technology breakthroughs. And the runaway success of hybrids like the Toyota Prius has converted the deepest skeptics—many of them from Detroit—into green gurus. Here are the trends that will shape the cars we buy over the next several years:
Must-have gizmo: an ecostrategy. Every manufacturer will offer hybrids, but the costs and benefits will vary—which means consumers will have to get a lot smarter about the technology to tell the pack leaders from the pretenders. Toyota and Honda will continue to lead, with Toyota pledging to sell a million hybrids a year in the next decade and Honda coming out with the cheapest hybrid on the market next year, priced at about $20,000. General Motors is catching up, with a new but expensive hybrid system for big SUVs. Ford, Chrysler, and Nissan are further behind, with fewer announced models.
Power moves. The next innovation, after hybrids, will be plug-in models with a gas engine and an electric motor charged from a regular electric outlet. Toyota and GM are duking it out on plug-ins, with both promising cars on the market by 2010. It's doable—but the question is how much it will cost them. The needed battery technology is still unproven and expensive, which means the automakers will either set exorbitant prices for the cars or subsidize them. Meanwhile, a start-up called Fisker Automotive, backed by the legendary venture capital firm Kleiner Perkins Caufield & Byers, aims to beat the giants to market, with a luxury plug-in hybrid coming in 2009. The cost: $80,000. One option will be solar panels on the roof that help run the air conditioning and other accessories.
Diesel redux. Americans don't like diesels, but the European automakers, which sell many in Europe, will try to make them sexy. BMW, for instance, will bring a 3 series and an X5 diesel to the United States this year, emphasizing the muscular acceleration that comes from the high-energy fuel, along with new technology that makes diesels much cleaner. Mercedes, Audi, and Volkswagen will bring new diesels as well.
Small becomes big. Another way to get better mileage and reduce emissions is to build smaller cars. After a tortured history, the cute and puny Smart fortwo, barely bigger than a golf cart, will arrive in the United States in 2008. The company, a division of Daimler-Benz, expects it to be so popular it could take months to get one. Ford plans to bring more small cars from Europe, and most automakers will build up the low end of their lineups. Bucking the trend is Mini, which is going maxi: The Clubman, coming this year, is an expanded version of the Cooper, aimed at people who love the car but need more storage space.
Gas-powered cars will still occupy a tiny little niche. Right—like over 90 percent of the market for the foreseeable future. But even in conventional cars, a lot will change under the hood. New kinds of transmissions and other technology will help make gas-powered cars more efficient—and a bit more expensive, too. With more power from a smaller package, the vaunted V-8 engine will become a rarity, reserved for muscle cars and heavy-duty vehicles like pickups.