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Hybrid Vehicles (HV) provide a glimpse of the future of environmental vehicle design but what is needed to succeed in the marketplace? In this paper, I will analyze the market penetration of HVs in the long and short run. This paper also studies the factors influencing the sales of HVs such as gasoline prices, government subsidies and environmental concerns.

















The American way of life has developed around the automobile. Personal and public transportation allows people to live in suburban communities and commute to work where the majority of jobs are; the urban centers. However this freedom comes with a high price. Urban air quality problems persist and increase. With increase in motorized travel and congestion comes an increase in energy use, emissions and air pollution. Greene and Santini (1993) stated that “dependency on foreign energy sources decreases the American energy security and adversely affect the balance of trade.”
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