The US Energy Department is offering automakers incentives to develop plug-in technology for hybrids, allowing them to run up to 40 miles on electric power before needing to run on their gasoline engines. The goal of 40 miles coincides with average daily commute and around town driving distances.

By using the energy stored by plugging into a household outlet, much less use would be made of the combustion engine in hybrid vehicles. The benefit would be a significant boost, conceivably adding from 50 to 80 miles per gallon to a hybrid's fuel efficiency rating.

Needed in order to achieve the goal of plug-in hybrids in mass production will be overcoming the difficult hurdle of increasing energy storage. Nickel-metal hydride batteries now in use in gasoline-electric hybrids have a smaller storage capacity than the lithium ion batteries which are currently being developed.

An incentive of up to $30 million will be awarded to developers who demonstrate a plug-in hybrid with 40 miles of electric-only propulsion that can be ready for production within 5 years.