California was chosen to study because, given the fact that it is often at the leading edge of energy conservation policy and practices, plug-in hybrids are expected to be popular there. For the simulations, researchers compared the Chevrolet Volt with the Toyota Prius and Chevy Cobalt to estimate relative economics of the alternatives.

The researchers determined the plug-in hybrid would be less economical than the Toyota Prius, a hybrid that does not charge its battery through a plug, or the Chevrolet Cobalt, which uses only an internal combustion engine. When oil prices are high, the Prius would be the most economical, with the advantage going to the Cobalt when oil prices are low.

Tyner said to make the Volt more economical than either the Prius or the Cobalt, oil prices would have to rise to between $171 and $254 per barrel, depending on which electricity pricing system is being used. That's because the Volt has a higher purchase price and will cost more in electricity than gasoline over the life of the vehicle.

The simulations accounted for a $7,500 federal rebate to consumers for purchasing plug-in hybrids. Tyner said electricity costs would have to decrease to allow the plug-in hybrids to compete.

"People who view the Volt as green will pay $10,000 more over the lifetime of the car because it's green," Tyner said. "Most consumers will look at the numbers and won't pay that."

Purdue's Center for Research on Energy Systems and Policy funded the research.