The international economy, in the beginning of the 20th century, is characterized by uncertainty about the supply and the price of oil. Together with the fast decrease of electrical propulsion component prices, it becomes more and more cost effective to develop vehicles with alternative powertrains. This paper focuses on two questions: Are alternative powertrains especially cost effective for specific applications?; How does an increased fossil fuel price influences the choose of powertrain? To assess these questions, a computer tool named THEPS, developed in a Ph.D. project, is used. Three applications and three scenarios are analysed. The applications, a car, a city bus and an intercity bus, are vehicles all assumed to operate in Sweden. One scenario represents year 2005, the other two year 2020. The two future scenarios are characterized by different fossil fuel prices. The study, presented in the paper, indicates that alternative powertrains can be competitive from a cost perspective, in some applications, already in year 2005. It is for example cost effective to equip a city bus, running in countries with a high fuel price, with a hybrid powertrain. The study also indicates that pure electric, hybrid and/or fuel cell cars will probably be a more cost effective choice than conventional cars in year 2020. Another indication is that it will not be clear which powertrain concept to choose. The reason is that many cost effective powertrain concepts will be offered. The best choice will depend on the application. (c) 2005 Elsevier Ltd. All rights reserved.