United Parcel Service has ordered 200 hybrid electric trucks and 300 compressed natural gas vehicles from Daimler as it seeks to make its delivery fleet more fuel efficient.

Daimler said the order represents the largest ever placed for "green" commercial vehicles. Retail value of the trucks has been estimated at $50 million.The chassis will be supplied by Daimler's Freightllner subsidary, the hybrid systems by Eaton Corp.

In addition to helping US "green" its fleet and cut its fuel bills, use of the trucks throughout the U.s. fleet could help spread awareness of alternative fuel and hybrid vehicles.

The hybrid delivery trucks, which combine a diesel engine and electric motor, achieve 40 percent improvement in fuel economy and a 90 percent reduction in emissions compared to non-hybrid UPS vehicles, Daimler said.

The CNG trucks produce about 20 percent less carbon dioxide and other emissions than diesel-powered trucks.

The vehicles will be used by UPS for daily delivery operations across the United States and will function in concert with the package service's fleet of conventional diesel vehicles, UPS said in a statement.

The 200 hybrid electric vehicles, which will be deployed next year, are expected to save 176,000 gallons of fuel annually. The 300 CNG trucks  will enter service later this year.

The order will raise to 2,218 -- slightly more than 2 ppercent -- the number of low-carbon vehicles in the 93,000-truck UPS fleet.

Scott Doggett, Contributor

Toyota's Prius is top hybrid in the world with more than a million sold so far.

Over the years, automotive industry analysts repeatedly have pondered the question of just what the gas-price tipping point might be.

 For a while it was thought, based on focus groups, surveys and gut feelings, that people wouldn't change their car-buying habits until gas hit $3 a gallon. Then it was $4 and some even said it would take $5 a gallon gas to do the trick.

Well, it seems that $3.60 did the trick.

 As gas prices hit that mark in early April, small car and hybrid sales began soaring. As we reported earlier, both segments captured record shares of the U.S. new vehicle sales market for the month.

Toyota's Prius, synonymous with "hybrid" for many people, was not only the top-selling hybrid but the eighth-best selling passenger car overall for the month.

Now Edmunds AutoObserver brings us news that Toyota has announced that the Prius sales motored proudly past the million-mark in April, hitting a global total of 1.028 million – and climbing.

Success like that is likely to spur Toyota's decision-makers to give a big green light to a project they've been discussing publicly for months now – an expanded line of Prius models.

John O'Dell, Senior Editor

Gorton Vallely stands with his company's prototype battery-electric, medium-duty truck at Alternative Fuel Vehicles show.

LAS VEGAS, Nevada --The Detroit Auto Show this year had a herd of diesel concepts, a few hybrids and a host of muscle cars, typical fare these days for a mainstream auto show.

Absent was much of anything to do about other "today" alternatives to gasoline, leading people who are concerned about the auto, the energy sector and the environment to wonder what the automakers are up to and why they aren't moving faster to throw off the yolk of demon oil.

Can't answer that question. If I could I'd be out making millions as a highly paid consultant and seer instead of sitting in front of my computer in a 'Vegas hotel room overlooking the scenic roof of the power plant that keeps the casino chilled.

But I can suggest that for every innovation we don't see coming from our mass market automakers there's a small business out there somewhere hoping to offer up a solution.

Many of them are serving the fleet business – the trucking, bus and taxi companies that buy lots of relatively expensive equipment, are subject to strenuous emissions regulation in most states and bleed profits every time the price of gasoline or diesel goes up even a penny a gallon.

Walk around the showroom floor at the annual Alternative Fuel Vehicles national conference here this week and you see that can do spirit everywhere.

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By John O'Dell, Senior Editor

The idea of spending less on gas seems to be driving far more people into the green car ranks than the idea that you are doing something good for the planet and those who occupy it.

We can see this pretty clearly in the astonishing growth of small car sales in the U.S. – hardly anyone was buying them a few years ago and last month they accounted for a record 22.6 percent of the new car market, according to Edmunds.com's market analysts.

Meantime, large trucks' market share plunged to just 11 percent, down from a high three years ago of 19 percent.

Small used to mean cheap. Now it means fuel efficient (although not all small cars are particularly miserly with gas). And as compacts and subcompacts continue to capture market share, look for automakers to start piling high-margin luxury goodies into their small cars as they seek ways to replace the profits they used to book from truck sales.

Hybrids Rising Too

We can also see concern about fuel prices in the steady rise of hybrid sales – they accounted for a record 3.2 percent of the market in April, with Toyota's Prius the month's 10th best-selling model of any type.

That hybrids are increasing their market penetration even though they cost more than comparably equipped conventional versions of the same models (except the Toyota Prius, which has no conventional counterpart) is testimony to people's desire to pare their fuel bills.

Just a year or so ago, the Prius was the only hybrid with a reasonable chance of providing sufficient fuel savings to pay back the so-called hybrid premium – the price a hybrid purchaser pays to get a car or SUV with two powertrains and enough complex electronics to make a NASA engineer jealous.

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Audi reportedly has inked a deal to work with Japan's Sanyo on development of high performance batteries for a pilot hybrid project for the Volkswagen Group, Audi's owner.

The alliance could lead to Sanyo batteries and other electronic components being used in future Volkswagen group models, British on-line automotive journal just-auto.com suggests.

Volkswagen's own hybrid development program has been scaled down dramatically by chief executive Martin Winterkorn, who thinks the 2,000 euro ($3,092) additional cost to hybridize a vehicle is too steep.

At Audi, there are plans for a hybrid Touareg SUV and a hybrid Q7 crossover. The German newspaper Süddeutsche Zeitung, which initially reported  the Sanyo deal, said the partnership could lead to hybrid technologies being used in Audi's passenger cars as well.

John O'Dell, Senior Editor

Audi sees "great opportunities" in electric vehicles and will offer battery-electric automobiles with no exhaust emissions within ten years, its top executive told a German weekly.
 
Chairman Rupert Stadler, in an interview with Welt am Sonntag published Sunday, said he expects diesel and battery technology to be a dominate force the automotive market in five to ten years.

"By then we will offer cars without exhaust emissions," Stadler said.

Asked if Audi was trailing domestic rivals Mercedes-Benz and BMW in the development of  batteries to power electric vehicles,  Stadler replied that he wasn't worried, that Audi's research capabilities are larger than those of its competitors.

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 After a speech Thursday at San Francisco's Commonwealth Club, General Motors Chairman Rick Wagoner was asked if the Chevrolet Volt -- still two-plus years away but already starring in the automaker's TV ads -- would be GM's Prius.

The high-mileage, gas-electric car from Toyota Motor Corp. still dominates hybrid sales nearly a decade after it first went on sale in the U.S.

 "We think it could be a big game-changer.," said Wagoner, an executive not prone to over-statement.

"When we get it to the market, we'll see. If we deliver on what we have on the drawing board, I think it's going to show a lot of people that we've got great technology at GM and we can compete with anybody in that field."

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Plug-in hybrids are seen by many, including Magna, as the next great  frontier.

By John O'Dell, Senior Editor

Another entry in the plug-in hybrid race, this time from a competitor with really powerful potential.

Magna International, the top-tier Canadian auto parts maker, says it will roll out a plug-in car late next year or in 2010.

So as not to foul relationships with the major automakers that it already supplies with scores of parts, Magna says it won't sell a competing plug-in but will sell them the bits and pieces needed to make their own.

In markets where its customers don't sell cars, though, Magna intends to field a complete plug-in under its own brand.

The company, which reported $26.1 billion in sales and a $663 million net profit last year, is serious about becoming a car maker.

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By John O'Dell, Senior Editor

CASCAIS, Portugal – Nissan Motor Co. which has promised to introduce an electric vehicle in North American in 2010, now sees enough market potential for battery-powered electric cars that it is planning a second model for as early as 2012.

The Japanese carmaker was late to the game with gas-electric hybrids and doesn't intend to get caught with a bare product portfolio as cheaper and more reliable batteries make EVs an economic and practical choice in coming years, product planning chief Tom Lane told Green Car Advisor in an interview at Nissan's global vehicle show-and-drive program in this coastal resort town just west of Lisbon.

Lane said that while Nissan began its green planning half a decade ago with a broad slate of possible technologies, economic and scientific changes have pushed battery-electric vehicles to the forefront as a near- and midterm market strategies to meet increased political and social demand for cleaner, more efficient vehicles.

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Ford is among the companies working on plug-in gas-electric hybrids.

In a bid to promote plug-in hybrid development, the University of California's Davis campus is cosponsoring what it calls the world's first international conference on plug-in hybrid electric vehicles.

The confab, to be held July 22-24 in San Jose, California, appears to be in response to California's recent endorsement of plug-in technology in the revision of its controversial Zero Emission Vehicles (ZEV) Mandate.

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