GM's research executives work in sleek offices and conference rooms reached by ascending Saarinen's renowned floating spiral staircase; the spaces would make ideal sets for a revival of "How to Succeed in Business (Without Really Trying)." The executives seem to view hybrids as a steppingstone on the way to hydrogen-powered vehicles, which would use fuel cells to turn hydrogen into electricity. (The problem with hydrogen is that there's no guarantee of three important things: that hydrogen fuel will be cost competitive with gas, that it will be produced in an environmentally sensitive way and that a hydrogen fueling network will be built anytime soon. Consumers also associate the gas with an ill-fated blimp that crashed in New Jersey.)

"By 2010, we want to be ready with a commercially viable hydrogen car technology," says Byron McCormick, GM's executive director of fuel cell technology and commercialization. He spins out visions of hydrogen cars that could serve as electrical plants for individual homes, plugging into the garage at night to produce power. "If you had just 10 percent penetration of fuel cell cars in California, the cars would have more generation capacity than the electrical grid," he says. The company is investing more than $1 billion in its hydrogen car development program.

But the day when 10 percent of Californians will be tooling around in fuel cell vehicles is still far off, as is the fantastical year of 2010, when teenagers will travel by personal jet pack and Christmas dinner will be packaged in a pill. Today, consumers who care about gas mileage and limiting their impact on the environment are purchasing hybrids.

General Motors' first forays into consumer hybrids, its Chevy Silverado and Sierra pickup trucks, aren't really in the same category as the Toyota and Ford hybrids. They're "mild hybrids," which seek fuel efficiency by capturing energy lost in braking and by shutting off the engine when a driver is stopped at a red light, using batteries to power accessories like the radio and air conditioning. Full hybrids like the Prius do those things, too, but they also use banks of batteries and electric motors to actually propel the vehicle when it's moving at low speeds. GM won't offer a full hybrid until 2007. (DaimlerChrysler has yet to start selling its first hybrid of any sort in the U.S., though now it seems that a Dodge Ram pickup will likely be first in line.)

GM's Taub says the company is trying to "take the hype out of hybrids," introducing the technology slowly, and in vehicles where it will have the greatest environmental impact, like trucks and SUVs, which swill more gas and emit more pollutants than passenger cars. And he adds that GM doesn't intend to sell money-losing vehicles. "The question with hybrids is who will be the cleverest at driving down costs the fastest," Taub says.

It's true that hybrids will have more mass-market appeal once they're no longer priced at a premium. (Today's hybrids can cost $2,000 to $3,000 more than their nonhybrid doppelgangers.) But it's also true that the Japanese carmakers, by virtue of five years of production experience, are already figuring out how to drive down manufacturing costs more quickly than their rivals in Detroit. Toyota is already producing some of its Priuses on the same assembly lines it uses to produce traditional sedans -- rather than their own dedicated lines. That's a precursor to being able to cost-effectively offer any vehicle type in one of two flavors: regular or hybrid.

"It's natural to wonder how we can make a profit on these vehicles," says Wade Hoyt, a spokesman for Toyota Motor Sales USA. "I would chalk it up to sour grapes. We broke even on the first-generation Prius during its model run, and the current generation will be profitable after about two years on the market, which is typical for any vehicle." The company's high-end Lexus division, which will start selling its first hybrid SUV next year, has tallied up more preorders for the Lexus RX 400h than any other vehicle in Lexus' 15-year history.

Honda won't disclose whether individual car models are profitable, but spokesman Chris Naughton says that while "some things may not be profitable from Day One, we are in the business to make money." Naughton says Honda had its three consecutive best months of sales of the Civic hybrid last spring, when fuel prices were peaking. The company expects to sell about 20,000 of the new Accord hybrids in the coming year. "Hybrids are selling in increasing numbers as there are more available in the marketplace, and as customers understand that you don't have to plug them in," Naughton adds.

And neither company is ignoring hydrogen fuel cell technology, either. In 2002, Toyota and Honda were the first to begin leasing fuel cell vehicles in California. But, as Hoyt puts it, "whether or not the hydrogen market ever develops is something of a crapshoot." Toyota isn't giving up the bird in the hand for the one in the bush. The company is also licensing its hybrid technology to other carmakers, like Nissan and Ford, leading some analysts to compare Toyota to Intel. "They're kind of becoming the 'Intel Inside' for hybrids," says Pratt at JD Power. And it's highly unlikely that Toyota is selling hybrid technology to its competitors without turning a healthy profit.

"There's no question that Toyota and Honda are ahead of all the other carmakers, including the European manufacturers, when it comes to hybrids," Pratt says.

GM and its Detroit brethren do seem to be stuck in neutral, with GM in particular obsessed by the hydrogen-powered world of tomorrow. But that could change quickly. The forecasting firm CSM Worldwide expects 20 new hybrid vehicles to be introduced by 2007. "General Motors sells about 1.2 million full-sized trucks and SUVs every year based on one platform," says Lindsay Brooke, an analyst at CSM. "If GM prices its hybrids well, and markets them and advertises them in the right way, GM could well be the volume leader in hybrids."

Brooke says that while the Japanese carmakers have earned bragging rights by being first to market with hybrid vehicles, it's too early to pick a true winner. But if there is a victory in store for one of the Big 3, it'll be one of the come-from-behind variety.

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