In spite of the significant progress that battery technology has experienced in the last 20 years, the battery is still the most challenging technology in the design of hybrid vehicles.

All production hybrid vehicles used batteries employing nickel-metal-hydride (NiMH) chemistry. It is anticipated that the NiMH battery will be replaced by Li-ion batteries in the near future. The acceptability of today’s hybrid vehicles has been shown to be strongly dependent on the price of gasoline, as evidenced by the rapid growth of hybrid sales in 2008, when gasoline prices were high, and the fact that hybrid sales dropped dramatically in early 2009 when prices returned to lower values.
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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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