What Does the Future Hold for Advanced Technologies

1. What Does the Future Hold for Advanced Technologies? John German American Honda Motor Co., Inc. Advanced Powertrain Forum August 5, 2005 I will start off discussing Honda�s commitment to bringing environmental technologies and products to market. Then I�ll switch to discussing drivers for and barriers to bringing these products to market. Hopefully, this will help to illustrate the complexity of the climate change and transportation issue. As usual, I have way too many slides, so hang on.I will start off discussing Honda�s commitment to bringing environmental technologies and products to market. Then I�ll switch to discussing drivers for and barriers to bringing these products to market. Hopefully, this will help to illustrate the complexity of the climate change and transportation issue. As usual, I have way too many slides, so hang on.

2. 3 Issues for the Future Automobile: But going forward, what are the key �green issues� facing our industry? Clearly, they are: - the Sustainability of Energy (both supply and demand) - Climate Change concerns - and Urban Air QualityBut going forward, what are the key �green issues� facing our industry? Clearly, they are: - the Sustainability of Energy (both supply and demand) - Climate Change concerns - and Urban Air Quality

3. Transportation�s Social Issues These three issues are not static, but will change over time, with Air Pollution becoming less of a concern, and the issues of climate change and energy sustainability increasing in terms of social priorities.These three issues are not static, but will change over time, with Air Pollution becoming less of a concern, and the issues of climate change and energy sustainability increasing in terms of social priorities.

4. Honda is Committed to Clean and Efficient Gasoline Vehicles Technically advanced F.E. leading models in the market Popular mass-market models with continual efficiency improvement Highest CAFE of major OEMs

5. Honda�s Environmental Leadership Honda�s history of environmental vehicles has involved focusing our investment and efforts on those technologies we believed have high real world potential. These efforts have yielded results, and valuable lessons. Honda�s history of environmental vehicles has involved focusing our investment and efforts on those technologies we believed have high real world potential. These efforts have yielded results, and valuable lessons.

6. Honda�s Power Train Roadmap Honda continues to work on improving fuel economy by advancing gasoline engine technologies. One example is Honda�s application of variable valve timing, or VTEC, which we started in 1991. We introduced our first hybrid vehicle, the Insight, in 1999, equipped with Honda�s unique Integrated Motor Assist system, called �IMA�, and have adapted the system to the Civic and the Accord V6. Starting in 2002, we introduced a new generation of gasoline engines, the i-VTEC series, which adds cam phasing and DOHC. Simultaneously, we have continued development of CNG and fuel cell technologiesHonda continues to work on improving fuel economy by advancing gasoline engine technologies. One example is Honda�s application of variable valve timing, or VTEC, which we started in 1991. We introduced our first hybrid vehicle, the Insight, in 1999, equipped with Honda�s unique Integrated Motor Assist system, called �IMA�, and have adapted the system to the Civic and the Accord V6. Starting in 2002, we introduced a new generation of gasoline engines, the i-VTEC series, which adds cam phasing and DOHC. Simultaneously, we have continued development of CNG and fuel cell technologies

7. Honda�s Building Blocks for the Future Honda�s approach to vehicle technology and alternative fuels is based on establishing fundamentals we can build on for future transportation options. The super clean gasoline vehicles promote catalyst know-how, and will help assure healthy air quality goals are met in the near term, (Press ENTER � this is a slide which builds) The battery EV development has promoted electric component know-how, and the value of home refueling. (Press ENTER � this is a slide which builds) Natural gas vehicles promote gaseous fuel know-how and offer a clean and economical alternative to petroleum.Honda�s approach to vehicle technology and alternative fuels is based on establishing fundamentals we can build on for future transportation options. The super clean gasoline vehicles promote catalyst know-how, and will help assure healthy air quality goals are met in the near term, (Press ENTER � this is a slide which builds) The battery EV development has promoted electric component know-how, and the value of home refueling. (Press ENTER � this is a slide which builds) Natural gas vehicles promote gaseous fuel know-how and offer a clean and economical alternative to petroleum.

8. Honda�s Building Blocks for the Future Some of the positive learnings from EVs and CNG combine to enable home refueling of Natural Gas Vehicles, as a way to expand the practical use of AFVs to the consumer market. (press ENTER � this is a slide which builds) And, combining the technology of our efficient gasoline vehicles with EV know-how has enabled the super-clean, super efficient hybrids now offered.Some of the positive learnings from EVs and CNG combine to enable home refueling of Natural Gas Vehicles, as a way to expand the practical use of AFVs to the consumer market. (press ENTER � this is a slide which builds) And, combining the technology of our efficient gasoline vehicles with EV know-how has enabled the super-clean, super efficient hybrids now offered.

9. Honda�s Future Dream The experience with home refueled AFVs and with Hybrid technology helps provide the practical know-how that can help us succeed with fuel cell vehicles and a hydrogen infrastructure in the long term. It is the steps we take today, that move us most effectively down the road of sustainable transportation. The experience with home refueled AFVs and with Hybrid technology helps provide the practical know-how that can help us succeed with fuel cell vehicles and a hydrogen infrastructure in the long term. It is the steps we take today, that move us most effectively down the road of sustainable transportation.

10. Conventional Technology

11. Honda VTEC Combustion: One of the effective technologies for improving combustion is variable valve control. Honda calls it �VTEC�. This can help promote stable, lean operation during cold engine operation before the catalyst is active to reduce emissions. It also can be used to reduce fuel consumption through increased fuel efficiency. It is now applied to most of our power plants, including our larger trucks such as the 7-passenger, 260 horsepower Acura MDX Sport Utility Vehicle. This vehicle is already meeting EPA�s future Tier 2 bin 5 standard. That makes it the cleanest gasoline truck in the world.One of the effective technologies for improving combustion is variable valve control. Honda calls it �VTEC�. This can help promote stable, lean operation during cold engine operation before the catalyst is active to reduce emissions. It also can be used to reduce fuel consumption through increased fuel efficiency. It is now applied to most of our power plants, including our larger trucks such as the 7-passenger, 260 horsepower Acura MDX Sport Utility Vehicle. This vehicle is already meeting EPA�s future Tier 2 bin 5 standard. That makes it the cleanest gasoline truck in the world.

12. This chart shows a typical pattern of the speed, acceleration, and deceleration of a vehicle running. We roughly assumed that the vehicle would run in this red region with three cylinders, and in the other regions with six cylinders.This chart shows a typical pattern of the speed, acceleration, and deceleration of a vehicle running. We roughly assumed that the vehicle would run in this red region with three cylinders, and in the other regions with six cylinders.

13. Honda Announced Improvements 2006 Civic VTEC Delays intake valve closure timing during cruising and other low-load conditions Throttle-by-wire used for larger throttle opening and a major reduction in pumping loss Switches valve timing for excellent acceleration Advanced VTEC Continuously variable intake valve timing and lift + 13% efficiency (vs. 2005 i-VTEC engine Advanced VCM Increased flexibility to expand range of driving conditions Improved active control engine mounts + 11% efficiency (vs. 2005 Honda V-6 engine)

14. Transmission Advances Dual-clutch automated manual Smooth shifting and potentially cheaper But launch concerns (no torque converter), huge investment Continuously Variable Transmission (CVT) Excellent city efficiency and extremely smooth Can deliver steady-state engine speeds to facilitate HCCI But torque limited, highway efficiency lower (belt friction), huge investment Improved shift points and lock-up strategies Low investment Lapillier 6-speed automatic

15. Incremental FE Technology Engine technology High specific output (including 4 valve/cylinder) Variable valve timing/lift Cylinder deactivation Direct injection Precise air/fuel metering Transmission efficiency 5/6 speed-AT/6-speed MT CVT Dual-clutch automated MT Reduced losses Lightweight materials Low drag coefficient Low resistance tires Lower accessory losses

16. Worldwide Fuel Control On a systems basis, good fuel is needed to enable many technologies Growing countries, such as India and China, need to improve fuel quality Sulfur Heavy metals Aromatics Deposit additives etc

17. Diesels

18. The situation is entirely different in Europe. The situation is entirely different in Europe.

19. Diesels good for towing and highway efficiency But hybrids get better fuel economy in city driving Diesels are currently cheaper than hybrids, but are not cheap $1500 for 4-cyl., $2000-$3000 for V-8 Tier 2 emission standards will add significant cost Less convenient service stations (only ~ 20% carry diesel) Will take time for public to recognize improvements in noise, vibration, smell, starting, and emissions Plus pickup customers want a �tough� diesel, not a wimpy quiet one Must compete with improved gasoline engines and hybrids Europe refineries already shipping unwanted gasoline to US With continued fleet turnover to diesel in Europe, who will buy gasoline if US also shifts to diesels? Diesel Market Potential in US You may have notice that I haven�t talked about diesels. That�s because there are also barriers to introduction of diesels in the U.S. Unlike Europe, diesel taxes and fuel price are similar to gasoline. Diesels are expensive, even before considering the additional cost to meet Tier 2 emission standards, and most customers don�t care much about the fuel savings. Add to that less convienent service stations, hard-to-change perceptions that diesels are noisy, rough, smelly, hard to start, and dirty, and introduction of improved gasoline engines and hybrids, and it�s hard to make a case for substantial diesel penetration in the US, at least in the short run. Certainly there is a market for trailer towing in the larger light trucks, but diesels are likely to be only a niche market for cars and smaller light trucks.You may have notice that I haven�t talked about diesels. That�s because there are also barriers to introduction of diesels in the U.S. Unlike Europe, diesel taxes and fuel price are similar to gasoline. Diesels are expensive, even before considering the additional cost to meet Tier 2 emission standards, and most customers don�t care much about the fuel savings. Add to that less convienent service stations, hard-to-change perceptions that diesels are noisy, rough, smelly, hard to start, and dirty, and introduction of improved gasoline engines and hybrids, and it�s hard to make a case for substantial diesel penetration in the US, at least in the short run. Certainly there is a market for trailer towing in the larger light trucks, but diesels are likely to be only a niche market for cars and smaller light trucks.

20. Hybrids

21. Hybridization is particularly effective for conserving fuel. By coupling a clean engine with an electric motor assist system, fuel consumption and carbon dioxide emissions can be reduced significantly. Hybridization is particularly effective for conserving fuel. By coupling a clean engine with an electric motor assist system, fuel consumption and carbon dioxide emissions can be reduced significantly.

22. Integrated Motor Assist Hybrid Honda�s motor assist hybrid system supplements the engine to enable a relatively lightweight construction, which is appropriate to the goal of reducing fuel consumption. This particular hybrid system is quite effective in a wide variety of driving conditions, including both city and highway driving. Honda�s motor assist hybrid system supplements the engine to enable a relatively lightweight construction, which is appropriate to the goal of reducing fuel consumption. This particular hybrid system is quite effective in a wide variety of driving conditions, including both city and highway driving.

23. Honda HEV Technology Evolution The Insight was developed as a 2-seat commuter car combined with an extremely lightweight aerodynamic body, targeting the worlds best fuel economy. Next, a second generation IMA system and a new dual-spark plug engine were developed for the Civic. This expanded the scope of the technology into a mass-production vehicle for the first time.The Insight was developed as a 2-seat commuter car combined with an extremely lightweight aerodynamic body, targeting the worlds best fuel economy. Next, a second generation IMA system and a new dual-spark plug engine were developed for the Civic. This expanded the scope of the technology into a mass-production vehicle for the first time.

24. Powerplant

25. Engine and Motor Output Characteristics

26. Hybrid power trains do add new values to vehicle ownership: With an idle stop system, you come to a stop in complete silence. Because of the highly efficient power plant, there are far fewer trips to the gas station over the course of a year. And, a Hybrid instills �pride of ownership� in one�s personal vehicle choice. Hybrid power trains do add new values to vehicle ownership: With an idle stop system, you come to a stop in complete silence. Because of the highly efficient power plant, there are far fewer trips to the gas station over the course of a year. And, a Hybrid instills �pride of ownership� in one�s personal vehicle choice.

27. Alternative Fuels

28. Honda�s Advanced CNG Technology Honda continues to develop dedicated Compressed Natural Gas vehicles. The current Honda Civic GX is our 3rd generation Compressed Natural Gas design! Based upon EPA certification data, it is simply the cleanest vehicle in the world with an internal combustion engine. It also provides about a 20% reduction in greenhouse gas emissions. While this is slightly less CO2 benefit than a hybrid, it is significantly cleaner when measured on a well-head to wheels basis.Honda continues to develop dedicated Compressed Natural Gas vehicles. The current Honda Civic GX is our 3rd generation Compressed Natural Gas design! Based upon EPA certification data, it is simply the cleanest vehicle in the world with an internal combustion engine. It also provides about a 20% reduction in greenhouse gas emissions. While this is slightly less CO2 benefit than a hybrid, it is significantly cleaner when measured on a well-head to wheels basis.

29. Infrastructure Innovations To try to realize the opportunity presented by natural gas vehicles, we need to look at infrastructure. Natural gas offers new opportunities here, due to the possibility of distributed, dedicated refueling stations. For example, the FuelMaker company offers small scale refuelers to serve small fleets not close to a public station. And, with the vision of FuelMaker and Honda, a home refueling appliance is under development, targeted at a price of $1000. This would fill the car conveniently overnight - providing new consumer values. The great thing about this technology is that we are getting ideas on how to solve the infrastructure problems of pure hydrogen. And we can test out these ideas in relatively low cost, low risk ways with compressed natural gas.To try to realize the opportunity presented by natural gas vehicles, we need to look at infrastructure. Natural gas offers new opportunities here, due to the possibility of distributed, dedicated refueling stations. For example, the FuelMaker company offers small scale refuelers to serve small fleets not close to a public station. And, with the vision of FuelMaker and Honda, a home refueling appliance is under development, targeted at a price of $1000. This would fill the car conveniently overnight - providing new consumer values. The great thing about this technology is that we are getting ideas on how to solve the infrastructure problems of pure hydrogen. And we can test out these ideas in relatively low cost, low risk ways with compressed natural gas.

30. Honda started working on fuel cells in the 1980s. In 1999 we installed an onboard methanol reformer fuel cell stack on the FCX-V2. Since then we continued to improve the performance and reliability of fuel cell stacks. In 2001 we installed a high-pressure hydrogen tank on a pure hydrogen-fueled FCX-V3. And then, last autumn we presented the next-generation Honda fuel cell Stack.Honda started working on fuel cells in the 1980s. In 1999 we installed an onboard methanol reformer fuel cell stack on the FCX-V2. Since then we continued to improve the performance and reliability of fuel cell stacks. In 2001 we installed a high-pressure hydrogen tank on a pure hydrogen-fueled FCX-V3. And then, last autumn we presented the next-generation Honda fuel cell Stack.

31. Output density of Honda FC stack The Honda fuel cell Stack uses a new, simplier, hydrocarbon material. This reduces the weight and increases the efficiency. Both the volumetric and the weight output density are more than double the previous fuel cell stack. The Honda fuel cell Stack uses a new, simplier, hydrocarbon material. This reduces the weight and increases the efficiency. Both the volumetric and the weight output density are more than double the previous fuel cell stack.

32. FCX Equipped with Honda Fuel Cell STACK The New FCX improves all factors relative to the 2003 FCX. Not only is performance and fuel efficiency improved, but Honda�s new fuel cell stack can start up at temperatures well below freezing. As the output from a fuel cell is water vapor, operation at temperatures below freezing is a major challenge. The new FCX has been certified by the governments of Japan and the US and is being tested on public roads in Japan, California, and New York. Honda was the first company to put a fuel cell vehicle in the hands of an individual customer for evaluationThe New FCX improves all factors relative to the 2003 FCX. Not only is performance and fuel efficiency improved, but Honda�s new fuel cell stack can start up at temperatures well below freezing. As the output from a fuel cell is water vapor, operation at temperatures below freezing is a major challenge. The new FCX has been certified by the governments of Japan and the US and is being tested on public roads in Japan, California, and New York. Honda was the first company to put a fuel cell vehicle in the hands of an individual customer for evaluation

33. Looking to the future, we are working with Plug Power to develop a Home Energy Station using natural gas. A reformer is used to generate hydrogen from natural gas. The hydrogen is used to provide heat and electricity for the home, as well as compressed hydrogen for use in a vehicle. Tests began last autumn to evaluate the efficiency, reliability and running costs of the system.Looking to the future, we are working with Plug Power to develop a Home Energy Station using natural gas. A reformer is used to generate hydrogen from natural gas. The hydrogen is used to provide heat and electricity for the home, as well as compressed hydrogen for use in a vehicle. Tests began last autumn to evaluate the efficiency, reliability and running costs of the system.

34. Fuel Cells: The Holy Grail Advantages: Very high fuel conversion efficiencies Greatly reduced heat loss Virtually zero emissions Quiet Reliable and long lifetime Low maintenance Wide range of applications in addition to vehicles Challenges Packaging, size, weight Cost Waste heat rejection Air supply ? Compressor Cold temperature operation On-board hydrogen storage Hydrogen infrastructure Fuel cells will someday replace the internal combustion engine. They just have too many advantages. They are the only technology with the potential to solve all our problems. The real question is - When? Most discussion has focused on when fuel cells and the related infrastructure will be ready. I don�t want to minimize the substantial challenges in bring fuel cells to market, especially storing hydrogen onboard the vehicle and developing a hydrogen infrastructure. However, there seems to be an unspoken assumption that, once these challenges have been solved, fuel cells will naturally start to replace the internal combustion engine. Fuel cells will someday replace the internal combustion engine. They just have too many advantages. They are the only technology with the potential to solve all our problems. The real question is - When? Most discussion has focused on when fuel cells and the related infrastructure will be ready. I don�t want to minimize the substantial challenges in bring fuel cells to market, especially storing hydrogen onboard the vehicle and developing a hydrogen infrastructure. However, there seems to be an unspoken assumption that, once these challenges have been solved, fuel cells will naturally start to replace the internal combustion engine.

35. System Comparison

36. Comparison of CO2 Emissions Here is one example of a well to wheel analysis. The tank to wheels is shown by the blue bars and the wheel to tank is shown by the orange bars. As you can see, improvements in vehicles with internal combustion engines can progressively reduce CO2 emissions. Hybrid powertrains also offer substantial reductions. A natural gas vehicle can reduce CO2 emissions in comparison with gasoline vehicles. While the fuel cell itself has no CO2 emissions, production, delivery, and storage of hydrogen uses far more CO2 than comparable processes for fossil fuels. Thus, CO2 emissions from the hydrogen fuel cell vary according to the methods of producing and storing hydrogen. Fuel cells offer a substantial reduction in CO2 only if the hydrogen is generated from a non-fossil fuel source, such as solar or nuclear energy or renewable fuels. Here is one example of a well to wheel analysis. The tank to wheels is shown by the blue bars and the wheel to tank is shown by the orange bars. As you can see, improvements in vehicles with internal combustion engines can progressively reduce CO2 emissions. Hybrid powertrains also offer substantial reductions. A natural gas vehicle can reduce CO2 emissions in comparison with gasoline vehicles. While the fuel cell itself has no CO2 emissions, production, delivery, and storage of hydrogen uses far more CO2 than comparable processes for fossil fuels. Thus, CO2 emissions from the hydrogen fuel cell vary according to the methods of producing and storing hydrogen. Fuel cells offer a substantial reduction in CO2 only if the hydrogen is generated from a non-fossil fuel source, such as solar or nuclear energy or renewable fuels.

37. Current Evaluation of Power Plant Technologies This slide shows Honda�s current evaluation of several of these power plant technologies, across several factors. The first three columns address environmental and energy issues. The right three columns relate to marketability issues, such as packaging, cost and infrastructure. Conventional gasoline vehicles can satisfy customer demand more competitively in comparison with other fuel and power plant technologies. Natural gas vehicles and fuel cell vehicles can advance on environmental and energy issues, along with hybrids, which offer a natural extension of the internal combustion power plant, (though cost remains an issue.) This slide shows Honda�s current evaluation of several of these power plant technologies, across several factors. The first three columns address environmental and energy issues. The right three columns relate to marketability issues, such as packaging, cost and infrastructure. Conventional gasoline vehicles can satisfy customer demand more competitively in comparison with other fuel and power plant technologies. Natural gas vehicles and fuel cell vehicles can advance on environmental and energy issues, along with hybrids, which offer a natural extension of the internal combustion power plant, (though cost remains an issue.)

38. Development History of Honda Hybrids

39. Hybrid Synergies More efficient electric pumps and compressors Beltless engine Extend operating windows for Atkinson cycle and cylinder deactivation Provide quasi-steady-state load conditions for HCCI/CAI operation (especially with CVT) E-turbo High electric power � supercharger boost When power is not needed, use exhaust energy to drive e-turbo and recharge battery

40. Potential Operating Modes

41. Consumer Features Plenty of electric power to do anything On-board electric generator Construction, emergency power Individual climate-controlled seats Power everything Automatic load leveling and shock resistance Multiple video displays and high power sound Safety features � cameras, heads-up displays �Stealth� operation (military, police, crooks) No limit to the imagination

42. Mid-Term Evaluation of Hybrids vs. Diesels

43. Technology Conclusions Challenge is customer�s low value of fuel economy Real cost of driving very low Performance, utility, comfort, safety valued more highly Most only consider fuel savings during ownership period Hybrid technology is progressing rapidly Costs coming down Synergies with other technologies developing Consumer features will develop Crystal ball unclear Improved conventional engines keep raising the bar Fuel cells the endgame, but timing unclear (not near term) CNG may appeal to a segment who dislikes refueling Diesels for rural areas, hybrids for urban? Multiple transmission designs likely

44. Thank you for your attention.Thank you for your attention.

45. Barriers to Achieving Potential Fuel Economy Increases in Cars and Light Trucks Tradeoff with other attributes Declining fuel cost Consumers versus society

46. CAFE History

47. Effect of Attribute Tradeoffs - Cars

48. Effect of Attribute Tradeoffs - LDT

49. Real Gasoline Price Low fuel prices in the US are also a substantial barrier to alternative fuels. Here is the latest available fuel price data from DOE. Low fuel prices in the US are also a substantial barrier to alternative fuels. Here is the latest available fuel price data from DOE.

50. Fleet Fuel Economy

51. Gasoline Cost per Mile

52. Real Fuel Cost - % of Disposable Income

53. Willingness to Pay for FE J.D. Power Hybrid Vehicle Acceptance Study March 6, 2002 Press Release Consumer interest in hybrid vehicles increases as gasoline prices rise 30% of buyers would �definitely� consider - another 30% indicate a strong consideration Of these, 1/3 would buy even if fuel cost savings during their ownership period would be less than the extra cost of the hybrid option Two critical issues are the acceptance of hybrid technology by buyers and the value customers place on fuel savings. A recent press release from J.D. Power and Associates suggests that most customers would at least consider a hybrid vehicle for their next purchase. In addition, of these buyers, 1/3 would buy a hybrid even if the fuel cost savings during their ownership period would be less than the extra cost of the hybrid option. That�s the good news. The bad news is that this means that 2/3rds of the buyers would not pay more than the fuel savings during their ownership period.Two critical issues are the acceptance of hybrid technology by buyers and the value customers place on fuel savings. A recent press release from J.D. Power and Associates suggests that most customers would at least consider a hybrid vehicle for their next purchase. In addition, of these buyers, 1/3 would buy a hybrid even if the fuel cost savings during their ownership period would be less than the extra cost of the hybrid option. That�s the good news. The bad news is that this means that 2/3rds of the buyers would not pay more than the fuel savings during their ownership period.

54. New car buyers may factor in the first 5 years or so of fuel savings. For the Civic and Prius compact sedans, that saves about $500-$1000 U.S. at 1.50 per gallon. The Honda Insight hybrid, a �supercar� with tremendous fuel economy, also saves about $1000. Recently, J.D. Power surveyed the public, and found that a majority of new vehicle buyers would consider purchasing a hybrid electric vehicle, and many of them would be willing to pay $1,000-$1,500 for a hybrid power train. Power Report March 2002: Sixty percent of new vehicle buyers say they would definitely/strongly consider purchasing a hybrid electric vehicle. (2002 Hybrid Vehicle Consumer Acceptance Study by J.D. Power and Associates.) �Customers indicate a willingness to pay more - $1000 to $1500 � for a hybrid powertrain and 30% would do so even if they could not recoup the additional expense through reduced fuel costs.� New car buyers may factor in the first 5 years or so of fuel savings. For the Civic and Prius compact sedans, that saves about $500-$1000 U.S. at 1.50 per gallon. The Honda Insight hybrid, a �supercar� with tremendous fuel economy, also saves about $1000. Recently, J.D. Power surveyed the public, and found that a majority of new vehicle buyers would consider purchasing a hybrid electric vehicle, and many of them would be willing to pay $1,000-$1,500 for a hybrid power train. Power Report March 2002: Sixty percent of new vehicle buyers say they would definitely/strongly consider purchasing a hybrid electric vehicle. (2002 Hybrid Vehicle Consumer Acceptance Study by J.D. Power and Associates.) �Customers indicate a willingness to pay more - $1000 to $1500 � for a hybrid powertrain and 30% would do so even if they could not recoup the additional expense through reduced fuel costs.�