The National Renewable Energy Laboratory (NREL) validated diesel-conventional and diesel-hybrid medium-duty parcel delivery vehicle models to evaluate petroleum reductions and cost implications of hybrid and plug-in hybrid diesel variants. The hybrid and plug-in hybrid variants are run on a field data-derived design matrix to analyze the effect of drive cycle, distance, engine downsizing, battery replacements, and battery energy on fuel consumption and lifetime cost. For an array of diesel fuel costs, the battery cost per kilowatt-hour at which the hybridized configuration becomes cost-effective is calculated. This builds on a previous analysis that found the fuel savings from medium duty plug-in hybrids more than offset the vehicles' incremental price under future battery and fuel cost projections, but that they seldom did so under present day cost assumptions in the absence of purchase incentives. The results also highlight the importance of understanding the application's drive cycle specific daily distance and kinetic intensity.