Ford plans to sell 20,000 of its new Escape Hybrid sport utility vehicles in 2005, though it will absorb much of the cost of adding the fuel-saving, battery-driven electric motor, the automaker reportedly said on Thursday.

According to the Reuters news agency, the cost of adding the battery and other components driving the electric engine, which sits in the engine bay side-by-side with a standard petrol engine, is between $US5,000 and $7,000, far less than the $3,400 premium Ford is charging customers.

“It’s not what you would call your bell-ringer investment,” Ford chief operating officer Jim Padilla told Reuters at a product demonstration in Seattle.

The report said Ford expects to have the Escape Hybrid in showrooms in September with estimated fuel consumption of 35 to 40 miles (56 to 64 km) per [US] gallon, or 50% better than the standard Escape, a mid-sized SUV.

According to Reuters, the base model 2005 Escape Hybrid, Ford’s first hybrid vehicle, will list at $26,970, or $28,595 for the four-wheel drive model – it also qualifies for various state and federal incentives, including a “clean fuel vehicles” federal tax deduction of $1,500 for 2004, saving $500 for Americans in the top tax bracket.

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But, the report added,  that tax break is temporary and Ford officials are actively discussing additional incentives with state and federal officials.

“We’re working on it,” Padilla told the news agency. “We think the government can play a role here.”

Anticipating rising demand for hybrid vehicles, Ford officials hope to boost annual Escape Hybrid production past 20,000, which is about 8% of the total Escape line, Reuters said.

“We are looking for ways to increase that,” Padilla reportedly said, noting the primary constraint is the supply of the hybrid components.

According to Reuters, rising petrol prices have boosted demand for hybrid vehicles in recent months and California’s mandate for sharp reductions in greenhouse gas emissions from automobiles has helped spark plans for hybrids from several manufacturers.

Ford offers an eight-year or 100,000-mile (160,000 km) warranty on the Escape’s electric engine and batteries, which draw a charge from the petrol engine and from friction created during braking, the report said.

Reuters noted that at some point the Escape’s battery will need replacing, though Ford has not yet determined what that will cost.

“I don’t think we’ve figured it out, yet, but it won’t be cheap,” Padilla reportedly said.