John Huffman..thanks for a thoughtful post. Questions:

1)To what extent to you think that the elements of hybrid technology are subject to economies of scale…ie, if millions of these vehicles were being sold every year, what happens to the cost premium? Off the bat, I wouldn’t expect much improvement in the cost of the electric motors and generator, since these things have been manufactured in high volume for over a century…but maybe the batteries and control systems?

2)What do you see as the significant of the variable-valve technology, which eliminates throttling losses and seems to improve overall mileage by about 5-10%? (Being sold by BMW under the name “Valvetronic”(tm)). I don’t understand why there aren’t more auto manufacturers getting on board with this.

3)Ditto for the sequential automatic transmissions (basically, computer-controlled manuals), which could shave off another 5-10%.