Prices are high, so the advantages of buying hybrid cars are quite large.  Even if we could replace every car in America in the next three years, we don't have to.  Americans are going to buy lots of smaller cars and hybrids over the next two years - sorry Detroit - and that will reduce oil demand a few percent.  

And, because the demand is so inelastic, that few percent will do a lot to hold down prices.

Silent E

And do you think the Europeans would manage the Peak Oil better with all their effective diesel cars? They will just drive less. Increasing fuel efficiency will help you in the beginning, with oil supply down 10 -20%, but  it costs a lot and changing all cars will take much energy, so the net effect is not so great. But don't worry. Oil crisis ususally bring recession, recession brings unemployment, unemployed stop commuting and use less gas. Statistics show that even a mild recession cuts fuel usage effectively. The rest will buy smaller cars because many can't afford bigger - if they have money for a new car. This is the easy part. The difficult part is coping with the recession.