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I believe the performance potential of hybrids is in the fact that you can have huge short power outputs fairly cheaply and without too much weight. This doesn't help much in racing applications, but, it can help greatly in real world driving where you occasionally have the need for power for a short period. Electric drive gets heavy/expensive when you require high power levels for more than a few seconds.
Porsche's 918 is a good example of hyper-performance from a hybrid, but it is beyond most anyone's budget. What I would like to see is something along the lines of a Mustang with a low budget version of this. Use the V-6 RWD and add a light FWD e drive with a lightweight Li-Ion pack. Give it the ability to put out 100 HP for 5 seconds or sustained low power output for short periods of low speed electric only running. Add a lowpower generator to the engine, something along the lines of a first gen insight. Make it powerful enough to put out enough sustained power to the front drive for low speed crap weather driving.
This would give you GT like acceleration for 5 seconds, which, in the real world is long enough. It would also give you all weather AWD capabilities. When you need AWD, you DO NOT need high power output. This would not be a rally car.
Assuming the battery was kept quite small, I think such a system could be built for a reasonable price. And I believe it would have a better city mpg number than a regular V-6 mustang.
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