Carmakers are rushing the development of smaller and more efficient models in the U.S. to help improve fleet average fuel economy levels in light of stricter CAFE regulations, but not all consumers are looking for such vehicles. There will always be a market for bigger vehicles such as fullsize SUVs and sedans but because of the stricter emissions and fuel economy regulations carmakers may no longer be able to offer them.

One solution is to install hybrid drive systems in these types of vehicles, an idea that a number of carmakers are seriously considering. Daimler, Toyota and Chrysler have all revealed commitments to offer full hybrid lineups in the future, and now GM Vice Chairman Bob Lutz has stated that hybrids may make up as much as one-third of GM’s U.S. fleet by 2015. Speaking with The Detroit News, Lutz explained that by 2015 it won’t matter whether people want hybrids or not because car makers will be forced to comply with the new 35mpg average imposed by the federal government. Lutz also admitted that the new standards may mean the disappearance of mainstream V8 models.

While Toyota has offered its hybrid-only Prius for several years, GM's first major entry into the dedicated hybrid market will be the much touted Volt plug-in hybrid (pictured), which is expected to be on sale by 2010. Sales of the Volt are expected to hit 100,000 by 2012 and will likely make consumers more receptive to other hybrid cars from GM if successful.