Hybrid vehicles achieve reduced fuel consumption by incorporating in the drive train, in addition to an internal combustion (IC) engine, both an energy storage device and a means of converting the stored energy into mechanical motion. Some hybrids are also able to convert mechanical motion into stored energy. In its most general sense, the storage device can be a battery, flywheel, compressible fluid, elastomer, or ultra capacitor.

The means of converting energy between storage and mechanical motion is through the use of one or more motors/ generators (e.g., electric, pneumatic, hydraulic). In motor mode, these devices convert stored energy into mechanical
motion to propel the vehicle, and in generator mode, these devices convert vehicle motion into stored energy by providing part of the vehicle braking function (regeneration).
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Light-duty compression-ignition (CI) engines operating on diesel fuels have the highest thermodynamic cycle efficiency of all light-duty engine types. The CI diesel thermodynamic cycle efficiency advantage over the more common SI gasoline engine stems from three major factors: the CI’s use of lean mixtures, its lack of throttling of the intake charge, and its higher compression ratios. In a CI diesel engine-equipped vehicle, there is an additional benefit of reduced volumetric fuel consumption (e.g., gal/100 miles) because diesel fuel provides more energy per gallon than gasoline.

Lean mixtures, whose expansions are thermodynamically more efficient because of their higher ratio of specific heats, are enabled by the CI diesel combustion process. In this process, diesel fuel, which has chemical and physical properties such that it self-ignites readily, is injected into the cylinder late in the compression stroke. Ignition occurs following atomization of the fuel jet into small droplets that vaporize and mix, creating pockets of heterogeneous combustible mixtures.
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As a general rule, reduced fuel consumption comes at a cost. The cost may be due to more expensive materials, increased manufacturing complexity, or a tradeoff with other vehicle attributes such as power or size. In addition to increased manufacturing costs, other costs of doing business are likely to be affected to a greater or lesser degree.

These indirect costs include research and development (R&D), pensions and health care, warranties, advertising, maintaining a dealer network, and profits. The most appropriate measure of cost for the purpose of evaluating the costs and benefits of fuel economy regulations is the long-run increase in retail price paid by consumers under competitive market conditions. The retail price equivalent (RPE) cost of decreasing fuel consumption includes not only changes in manufacturing costs but also any induced changes in indirect costs and profit.
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Although each vehicle manufacturer has a proprietary way of defining very precisely how its vehicle must perform, it is assumed here that the following parameters will remain essentially constant as the technologies that reduce fuel consumption are considered:

• Interior passenger volume;
• Trunk space, except for hybrids, where trunk space may be compromised;
• Acceleration, which is measured in a variety of tests, such as time to accelerate from 0 to 60 mph, 0 to 30, 55 to 65 (passing), 30 to 45, entrance ramp to highway, etc.;
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The terms fuel economy and fuel consumption; these two terms are widely used, but very often interchangeably and incorrectly, which can generate confusion and incorrect interpretations:

Fuel economy is a measure of how far a vehicle will travel with a gallon of fuel; it is expressed in miles per gallon. This is a popular measure used for a long time by consumers in the United States; it is used also by vehicle manufacturers and regulators, mostly to communicate with the public. As a metric, fuel economy actually measures distance traveled per unit of fuel.
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