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You're right, the EV range of many hybrids is low, although it has become much better in new models.
The difference to existing hybrids would be that the electric motor only has to move the car very slowly, so energy demands are lower. The electric motor could also give additional boost to the ICE, but the goal is to have a traditional ICE car (no matter of what size) that has an EV mode to enter zero-emission zones.
Due to the area of operation, the power of such a car's electric motor wouldn't necessarily have to match those of EVs or current HEVs.
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