Electrifying Our Way to Fuel Economy: Regulatory Perspectives on Hybrid Vehicles

This paper discusses some of the key issues that policy would need to address to effectively encourage significant innovation in hybrid electric vehicle technologies. Emphasis is placed in related provisions in the Energy Independence and Security Act of 2007, as the energy legislation that authorizes (though appropriations have not occurred yet) the allocation of public resources to vehicle technology programs. Private investment in vehicle hybridization is contingent on expectations about future oil prices, which in turn are highly uncertain. The importance of addressing this issue in the context of technology innovation policy is discussed.