Chrysler, owned by Cerberus Capital Management, has begun production of several hybrid vehicles as of last week, according to the troubled automaker.

Like its larger U.S. competitors, Chrysler is desperately trying to shift its product mix into more fuel-efficient cars, trucks and SUVs as buyers look for the best fuel economy possible while not giving up the creature comforts of gas guzzlers.

Chrysler is now building the Dodge Durango and Chrysler Aspen SUVs with hybrid capability in its Newark, Delaware plant and the company says both will be available on dealer showrooms soon. "Soon" can't come soon enough and it'll be interesting to see what gas mileage these SUVs have, even after undergoing a hybrid transformation.

Chrysler desperately needs a hit here, but this sounds like a "me too" approach similar to General Motors Corp. (NYSE: GM)'s Tahoe hybrid and other vehicles. Yes, the fuel economy moves into the V6 level with these hybrid SUVs. Will that make customers buy them at a time when 4-cylinder vehicles are blowing off dealer lots, though?

This post is part of a series where personal finance expert Dan Solin looks at money moves that may seem smart in tough economic times, but are actually quite dumb. See all 12.

I know it is tempting. With gas at $4 a gallon and your SUV making frequent stops to fill up, the cost seems overwhelming. But does it really make sense to sell your gas guzzler and buy a new hybrid?

We have been led to believe that the greater the miles per gallon (MPG) of a car, the more we will save on gas.

However, a recent study by two professors at Duke University concludes that measuring fuel efficiency solely by MPG is misleading and inaccurate.

Look at these two examples. Which do you think will reduce energy costs and emissions the most:

1. You replace a car that gets 16 MPG with one than gets 20 MPG; or
2. You replace a car that gets 34 MPG with a hybrid that gets 50 MPG?

General Motors Corporation (NYSE: GM) investors, as well as auto industry trackers, will want to read Jonathan Rauch's "Electro-Shock Therapy" in the July 2008 issue of Atlantic Magazine. Mr. Rauch was given unprecedented access to all personnel involved in GM's company-wide commitment to have a market-ready electric car by late 2010. GM personnel note the Chevy VOLT, as the car is named, will not be a hybrid per se, but will be the first mass market electric car with a range of 40 miles per charge, enough to cover the daily commute of 75% of American workers. The car's small gasoline engine will be used to recharge the battery, while only electricity will be used to power the wheels. GM is trying to wow consumers by manufacturing an affordable electric car that will sever the connection between driving and the gas pump.

GM lost the engineering and publicity wars on electric cars to Toyota's Prius years ago. Toyota has been eating GM's lunch ever sense. According to GM's VP Bob Lutz, it's payback time. Using the same rhetoric President Kennedy used to launch the Apollo space program and race to land on the moon, GM has sectioned off the Volt division and given it complete decision-making and spending authority to reinvent not only the electric automobile, but also the company itself. In one Volt engineer's words: "Go big or go home."

Yes, there are problems with the weight to power ratio in the battery. And yes, production of both the battery and the car body are being rushed towards production without the normal period of evaluation. But GM has staked its future on the Volt, and unlike my colleague Michael Rainey who isn't that positive on the Volt, there's reason for at least cautious optimism, a quality currently in short supply coming out of Detroit.

Presumptive Republican presidential candidate John McCain's plan to award a $300 million prize "for the development of a battery package that has the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars " raises many questions.

For one thing, what does he mean by "leapfrog?" Does the McCain car have to be 10?% better? 20% better? or 30% better? Will a marginal improvement suffice? Moreover, who is going to decide whether the goal is met? environmentalists? the automakers? the government? These people can not agree on what we should do to reduce air pollution; I can't imagine the fights that will occur over what constitutes a technological "leap."

McCain wants the car to deliver a power source at 30% of the "current costs." Does that mean costs as of 2008 or whenever this wonder car is ready to be sold to consumers? How does he define "costs?" Is it the total cost of ownership or a reduction in the sticker price or something else entirely? Why limit it to batteries? What about hydrogen fuel cells whose only pollution is water vapor?

In a speech he delivered today, McCain pointed out that "right now we have a hodgepodge of incentives for the purchase of fuel-efficient cars." Indeed, purchasing a hybrid only makes economic sense for the most die-hard of tree huggers. But is the answer to skyrocketing gasoline price to be found in a contest? I am not so sure.

All of those green people in all of those green cars. The Toyota (NYSE: TM) Prius was a gamble when the auto company first designed and built it. The price was more than its "all gas" counterparts because the electric component of the engine was expensive to build. The Japanese firm had to bet that buyers would want to save the environment by purchasing an automobile aimed at cutting emissions.

All of that planning by Toyota worked. The Prius has now sold one million units worldwide. Reuters says that the car company said "Toyota believes that Prius vehicles worldwide have contributed to a reduction in carbon dioxide emissions by producing approximately 4.5 million tonnes less CO2 when compared with gasoline-powered vehicles in the same class and of similar size and driving performance."

And who is to say that the calculation is wrong, at least by much.

Toyota has once again put its competition in a situation where they have to catch up. When the company began to produce almost flawless cars 20 years ago, Detroit and Europe had to up their quality to stay in the game. Now they will need to aggressively follow Toyota into the hybrid market.

Being first to market sometimes has its advantages.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

Yes, you did read the headline right, ExxonMobil (NYSE: XOM) is hoping to cash in from the growing demand in hybrid cars. I know what you are thinking... ExxonMobil and hybrid cars don't exactly sound right in the same sentence, but when you think about it, it makes perfect sense. ExxonMobil loves cash, and if they see business potential in hybrid cars you can be sure they are going to go after their fair share.

While the hybrid market has been steadily growing, it is still a very small percentage of overall vehicle sales, but ExxonMobil thinks that hybrid popularity is going to grow at a quicker pace that the government is currently estimating.

According to Jim Harris, president of ExxonMobil's chemical division, "We are interested in good business opportunities, and that is what this is." While it is true that ExxonMobil's fascination with hybrids is due to the money-making potential, it is still good to see interest from the same company that held out so many years claiming that fossil fuels were having no impact on global warming.

General Motors Corp. (NYSE: GM), after seeing sales plummet for larger cars and SUVs over the past 18 months because of higher energy prices, is now doing a major about-face. It's no secret that a large part of GM's future strategy is tied up in alternative fuels and electric vehicles for the consumer market. Translation: inflation and energy prices are changing consumer gas price attitudes.

Robert Lutz, GM's product design expert extraordinaire (oh, and Vice Chairman), is placing a large bet on the Chevrolet Volt, a 100% electric vehicle that GM hopes will capture the imaginations -- and wallets -- of energy-conscious consumers. Lutz even calls the Volt GM's "moon shot" in a reference to a once-in-a-lifetime NASA goal to place a man on the moon in the 1960s. GM has a once-in-a-product-cycle chance to get a mass-produced, well-liked electric vehicle into dealer showrooms before any other global auto manufacturer.

Lutz, who speaks the best geek-speak there is concerning vehicle dynamics and drag coefficients, seems certain that GM can outfox Toyota Motor Corp. (NYSE: TM) by getting a popular, 100% electric vehicle into mass production first. Toyota's existing Prius is a hybrid (gas and electric), and the race is on to get a completely electric car onto the showroom floor. Since there is no gas engine, which provides power for air conditioners and many other components, all systems from entertainment to windshield wipers had to be created from the ground up for the new Volt. From reading this Lutz interview, the Volt has the potential to place GM on top of the auto world again. That is, if done right and before the competition beats it to the electric vehicle game.

Last week I wrote about GM's plans to bring its hybrid Volt to market in 2010. As I mentioned in that post, the competitors won't be standing around waiting for General Motors (NYSE: GM) to catch up. In fact, Honda (NYSE: HMC) and Toyota (NYSE: TM) are already preparing for a 2009 green-on-green smackdown.

According to Newsweek, both corporations have big plans to grab a lion's share of the green market. Honda, still licking its wounds over the failure of the hybrid Accord, is pulling that model out of their green lineup. To take its place, the company will introduce an entirely new marquee, one that will (hopefully) outrun the Prius in fuel efficiency and price. The company hopes to sell 100,000 of this model a year, a quantum leap beyond its current hybrid sales.

Toyota, the clear leader in the field to date, is treating its Prius as a new brand, much as it did with the Scion line. By 2009, look for compact, midsized and crossover models under the Prius moniker.

J.D. Powers estimates that by 2011 there will be 75 hybrid models in America's showrooms. And I'm betting every one of them will be better looking than Honda's original ugly mutt hybrid, the discontinued Insight.

Bloomberg.com reported today that unnamed sources privy to Chevrolet's plans for their version of the hybrid, the Volt, say that General Motors (NYSE: GM) hopes to build as many as 60,000 of the vehicle in the first year of production, 2010-11.

In its current iteration, the car would be capable of traveling up to 40 miles on its lithium-ion battery alone, or 640 miles between gasoline fillups. A (much more expensive) fuel cell version is also in the works for the Chinese market.

Industry experts are skeptical of the company's ability to reach such lofty goals. The process will be expensive -- GM expects to spend a least half a billion dollars in bringing the vehicle to market. The plan compresses GM's normal development cycle, and will test its corporate flexibility. The projected quantities also represent a real gamble on the car's popularity.

Chevy is also depending on the timely development of a new type of battery to power the E-Flex system. This system would allow the car to cruise at highway speed on battery alone, and could be recharged via house current, overcoming the limitations of current hybrids from Toyota Motor Corp. (NYSE: TM) and Honda Motor Ltd. (NYSE: HMC).

Hybrid vehicles as a category is picking up steam with the American public. As as prices hover around $2.80, there is little to no relief in sight for that go-juice that powers almost all our cars and trucks. With a hybrid Chevy Camaro being rumored for sometime in the future (General Motors (NYSE:GM) really needs to do this), how about hybrid versions of several popular full-size SUVs for the Detroit automaker? These are in addition to the E85 Ethanol-powered cars and trucks already on the market form GM.

These are not rumors, but are coming this fall to a GM dealer near you. The hybrid versions of the GMC Yukon and the Chevy Tahoe should be landing on the doorsteps of dealers here in a few months, with a combination V8 gas engine and an electric motor powered by batteries that are recharged using "regenerative braking" techniques widely used in hybrid cars and trucks already.

GM claims a 25% increase in fuel economy, with a slightly higher figure in city driving since quite a bit of driving will happen under 32 mph. When driving under that figure, the gas engine won't even be on (no gas burning). Although a 25% increase in fuel economy for a large SUV just barely brings it up to where most normal passenger cars (non-hybrid) already are, what is the point, you may say? Well, to those that must have an SUV and who are in the market, these hybrid versions may may be good options. But if prices are 30% higher than all-gas counterparts, GM may see sales sit on the sideline instead of replacing normal gas-guzzler SUV sales.

In the current age of anti-SUV vehicle-buying sentiment from the U.S. public, American automakers have had a tumultuous time trying to shift directions on a dime. Consumer sentiment can change with the wind, and triggers like a 50% increase in gas prices can come out of nowhere to completely obliterate profit margins of automakers that aren't in tune with those changes.

Toyota Motor Co. (NYSE: TM) is one automaker that seems to have seen this day coming years ago as it had early editions of hybrid vehicles on showroom floors and in volume long before other mass-market competitors. Sure, Honda and General Motors Corp. (NYSE: GM) were there with experiments too, but the Prius hybrid from Toyota stole the show.

Even now, with gas prices marching ever upward, both GM and Ford Motor Co. (NYSE: F) have been slow moving with hybrid vehicle introductions. In 2006, Ford's Escape small SUV was a great seller and the company is poised for more. What is in GM's back pocket?

Not much. At least not publicly. Projects like the GM Volt and E85 cars and trucks are there, but what about gas/electric hybrids? Nada. And the maddening part is, GM has the stuff to make it happen. What if GM came out with an iconic American nameplate (as in, a sports car brand) that had muscle and great gas mileage? Like matching a new hybrid system with GM's V8 Camaro (a Chevy product)? That could happen...but it's not. Why not?

GM could take the U.S. market by storm by having a sports car or slick entry into the fast-growing hybrid market soon (like, now). The automaker made a slight profit in its last quarter. Taking the lead in hybrid technology could be a major save for the company, although it still faces an uphill battle; it's own inertia toward innovation, for example. Without it, how does it hope to fend off nimble, ferocious Toyota?

Though it's not easy for consumers to be green, MSN Money's Abby Schutlz points out that it's possible to be environmentally sensitive and fiscally prudent.

Since buying organic food is expensive -- organic milk is about double the price of the conventional variety and produce can be 200% higher -- Schultz points out that people need to make an organic budget for their environmentally friendly purchases. This can be as simple as buying organic products when they are on sale to the price disparity isn't as great or purchasing produce such as cherries, grapes and peaches that retain less pesticide residue then their conventional counterparts.

I was particularly interested in the piece because I would like to be more environmentally conscious but, like many Americans, I'm not sure about how much I am willing to sacrifice economically to do that.

While hybrid cars are still quite expensive and will likely stay that way for awhile, Schultz advises readers that simply driving less is great for the environment too. And with our country in the midst of an obesity epidemic, walking or biking makes sense for a lot of reasons.

Similarly, simply cutting back on energy use probably does more good for the environment than expensive all-natural products.

So while being green-friendly might seem more expensive, many aspects of conservation will actually save money: Buying products in bulk with less packaging is cheaper, and so is using the library instead of the bookstore.

Does anyone have any tips for being environmentally conscious on a budget? I've talked to some friends, and one of the main reasons people don't make more of an effort to go green is the cost.

Wal-Mart Stores (NYSE: WMT) has been advertising its "green" environmental initiatives for quite a while now. Light bulbs, organic foods and potting soils, electronics packaging materials and recycled products are all available at Wal-Mart these days, and although I believe it could do more to promote its green stance, the retailer's effort so far is admirable.

Wal-Mart will soon be taking the green approach to its transport fleet by using more natural gas-powered vehicles. The Peterbuilt 386 hybrid truck reclaims wasted energy from the engine and uses it for power later on. Just as in hybrid passenger cars, the truck's "regenerative braking" reclaims lost power for battery charging in the vehicle's electrical system.

Even an efficiency gain of a few percentage points is enormous considering the number of Wal-Mart trucks all over the landscape daily. Gains of five to seven percent can be made in efficiency with these new Peterbuilt transport vehicles, which is sizable all things considered. The system, not expected to be in full use until 2010, is a great move by a big retailer. What it needs to do is market this to its customers, even though it is not directly product related. Will it do this? It's not clear. But some marketing along these lines might be a good break from "everyday low prices."

Toyota has long been interested in the hybrid car market. Their first introduction to the field came 10 years ago when they launched its first hybrid car, the Prius. So far Toyota's market for hybrid cars has not been very material to their business, but the company expects that the trend is coming it way and within a couple years we could see massive growth in consumers thirst for hybrid cars. Last year the company "only" sold 300,000 hybrids, but by its estimates expects that it will be selling a million plus hybrids each year starting in 2010.

Toyota could definitely be on the right track here. Societal concern of global warming the past couple of years has definitely been on the rise, and this is inevitably going to keep interest in hybrids increasing. Add on top of the current social movement, we also are dealing with record high gasoline prices. Sure, the current high prices of gas are bound to recede, but even if prices do fall back down towards $2 a gallon, that is still not exactly "cheap" gas (although we would all be jumping for joy to pay $2 for a gallon of gas these days).

Toyota rolled out the newest hybrid LS today in Japan and will be starting to offer the car in Europe, North America and Asia, including China, beginning next month.

So all you environmentally friendly consumers with an extra $124K laying around, get ready... your new luxury car is on the way!