Converting hybrid vehicles — particularly the Prius and Ford Escape — into plug-in hybrids has become a profitable niche industry for a few specialty companies. But the net impact of this new mini-industry has been much greater by influencing consumer and industry opinions.

Promoting the technical feasibility of PHEVs has been a significant factor in the auto manufacturers’ decision to develop the dozens of plug-in and all-electric vehicles now scheduled for delivery in the next five years.

But the earliest and strongest voice promoting PHEVs isn’t happy with that limited success. Felix Kramer, the founder of CalCars.org, says that getting to a million electrified vehicles by 2015 won’t do nearly enough to address climate change and energy independence, and now he’s setting his sights on electrifying internal combustion engine vehicles. He’s clearly on to something.

CalCar’s new “Big Fix” initiative wants to electrify some of the biggest emitters and gas-wasters — pickup trucks, SUVs and vans (PSVs). When used in delivery routes that are often well under 40 miles per day, they spend much of their time starting, stopping, and idling, and get among the worst MPG ratings around. Converting one of these vehicles to a PHEV or EV will reduce fuel consumption and emissions to a much greater degree than trading in a Sebring for a Prius.

SPVs, most notably the Ford F-150, have been among the top sellers for more than a decade, creating an inventory of millions of vehicles that could be converted. They also have much more space for battery packs, which makes for a simpler conversion than a compact car. Former Intel CEO Andy Grove and electric vehicle guru Andy Frank are fully on board, lending their considerable credibility to the idea.

The Japanese postal service has already begun converting its fleet of vehicles to EVs, and the U.S. Postal Service wants to do the same with more than 140,000 of its delivery vehicles. The cash-starved agency could save millions per year if the federal government decides to provide assistance, which would be more sustainable than a bailout.

The biggest impediments are the cost and potential resistance from the auto industry. The battery cost can be upwards of $20,000, making for a slow payback period if gasoline stays around $3 a gallon. The economics will improve over time, especially if conversion kits are produced in volume and battery manufacturing ramps up as the technology evolves.

But the harder sell will be convincing the auto industry that keeping vehicles on the road instead of buying new vehicles is a good thing, and that they should be a part of that business. Upgrading existing SPVs could be a multi-billion dollar business, extending the life of vehicles and preserving the energy cost sunk into building them. While Ford, GM and Chrylsler are best-suited to engineer conversions, this mass rethinking of the company would be an even bigger shift than the current change to becoming manufacturers of PHEVs and EVs.

Convincing fleet operators to convert will likely be easier than the consumers, legislators and car companies needed to make it happen. It’s not impossible, but it will take an extensive and well-orchestrated effort.

Appearing courtesy of Matter Network.

[photo credit: Flickr]

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By all accounts the cash for clunkers incentive program has exceeded all expectations in both volume of sales, as well as answering skeptics by getting fuel inefficient vehicles off the road.

The new vehicles being purchased average nearly 10 mpg higher, saving nearly 4 million barrels of oil per year and eliminating the production of tons of greenhouse gases.

More importantly, the program and its surrounding attention seems to have driven consumers towards hybrids and fuel efficient vehicles even more than a 50 cent spike in the price of gasoline. According to Brian Benstock, the VP and GM of Paragon Honda and Acura, the program is also introducing new customers to imports. Benstock said the program has reversed the ratio of domestic/import trade-ins at his dealership. Previously about 70 percent of his customers were trading one import (mostly Hondas) for another. Now it’s the opposite: 70 percent of people walking in the door are swapping American made autos for Hondas.

The simple reason for this switch — no Hondas qualify as clunkers under the program, so customers now Benstock’s talking to customers who previously bought American SUVs and pickups. He said the Honda Civic (37 percent of sales) is the hottest seller, followed by the Accord, and then the Insight hybrid. Paragon ran out of Civic Hybrids a few weeks ago, so for now his sales people are putting people in standard Civics by touting its fuel efficiency and adding incentives. He expects to have more Civic Hybrids by the end of the month.

Sales overall are nearly back to “pre-recession” levels Benstock says, with just as many additional customers who aren’t getting the cash-back as who are. He admits that this stimulus has “done exactly what it was supposed to do — stimulate sales,” but that at some point auto makers have to take over in generating sales on their own.

Ford and GM have also seen a strong increase in sales, while the impact at Chrysler has been more modes.

The Senate will likely push through another $2 billion to extend funding for the program. Benstock says the “right” vehicles are being driven off the road through the program. Most of the vehicles are older SUVs, minivans and trucks. “They’re junk.”

American consumers have proven that with the right incentives — monetary in nature — they’re willing to buy more fuel efficient vehicles. The lesson for automakers (especially Detroit) is that with Congress and gas prices leading the way, the shift to fuel efficiency will continue.

This article originally appeared on Matter Network.

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