In the contest between battery hybrid electric hybrids (BHEV) and plug in hybrid electric vehicles (PHEV), Google is placing a big bet on PHEVs. Google is developing software to deal with the additional load PHEVs will put on the smart grid. Not only the software aim to minimizes energy demand spikes, it also helps take advantage of solar and wind power. Both solar and wind, as inconsistent and lumpy sources of energy, can increase volatility to the electricity supply and prices.
PHEVs may overload the grid if consumers recharge their cars around the same time. Google believes that the grid must be able to handle this additional demand for PHEVs to become widely adopted. The company has a fleet of Toyota Priuses that have been converted to PHEVs.