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Serial systems with limited batteries and great fuel consumption in the generator combined with a light weight vehicle is a more sensible short to mid term solution for rising fuel costs.
BMW seem to agree with that basic philosophy. There is a heck of lot more efficiency available going down the serial route in my opinion. Mass uptake of electric vehicles is gonna take a lot longer.
The biggest challenge is getting consumers out of big fat tanks and 4wds that they plainly don't need. Consumer are going to have to kiss some luxuries goodbye if they want to keep the freedom of personal transport. The freedom itself will be the luxury in the future.
I think Lotus have got a market for this approach. In fact I've been looking for just such an engine for a project. Combine this with a wheel motor and a small battery/electronic control unit in a light weight vehicle and we've got something interesting.