The National Renewable Energy Laboratory verified diesel-conventional and diesel-hybrid parcel delivery vehicle models to evaluate petroleum reduction and cost implications of plug-in hybrid gasoline and diesel variants. These variants are run on a field-data-derived design matrix to analyze the effects of drive cycle, distance, battery replacements, battery capacity, and motor power on fuelconsumption and lifetime cost. Two cost scenarios using fuel prices corresponding to forecasted highs for 2011 and 2030 and battery costs per kilowatt-hour representing current and long-term targets compare plug-in hybrid lifetime costs with diesel conventional lifetime costs. Under a future cost scenario of $100/kWh battery energy and $5/gal fuel, plug-in hybrids are cost effective. Assuming acurrent cost of $700/kWh and $3/gal fuel, they rarely recoup the additional motor and battery cost. The results highlight the importance of understanding the application's drive cycle, daily driving distance, and kinetic intensity. For instances in the current-cost scenario where the additional plug-in hybrid cost is regained in fuel savings, the combination of kinetic intensity and dailydistance travelled does not coincide with the usage patterns observed in the field data. If the usage patterns were adjusted, the hybrids could become cost effective.