I don't think you're giving it quite enough credit. For a hybrid car what you can do is marry this to a more powerful electric motor (say, 40HP). When the car is cruising at a constant speed it's running on the engine and charging the batteries (or using just the batteries with the motor off). When the car is accelerating a lot it's using the batteries/motor and the engine at the same time (generating say 70HP or more). Given the lower weight and higher efficiency of this engine that's pretty significant. If it's possible to create a hybrid drive-train (including batteries) that weighs only as much or only a little more than a pure gasoline drive-train that could translate into much cheaper hybrid vehicles on the market.
P.S. For clarity's sake, modern hybrids are enormous compromises due to the weight of the battery and electric motor. For a hybrid you want the highest efficiency possible and thus the lowest total vehicle weight you can manage without compromise safety. The necessity of heavy batteries fights in the opposite direction, so in order to produce a fuel efficient vehicle car makers use more expensive, lighter weight materials in the construction of the vehicle. This increases the complexity of manufacturing (more different materials are being used) and raises the price of the vehicle. If you could drop in a drive-train which kept the weight the same that would change the industry dramatically.
Further research in to this engine design suggests it has a very narrow efficient range and the intended application is as a generator only, not to directly power the wheels. The electric motor would have to provide all the power required to propel the car. Of course, pure electric cars have already been done with some success, and a hybrid based on this system could have electric motors with a lot more than 33, 40 or 70 hp.
P.S. For clarity's sake, modern hybrids are enormous compromises due to the weight of the battery and electric motor. For a hybrid you want the highest efficiency possible and thus the lowest total vehicle weight you can manage without compromise safety. The necessity of heavy batteries fights in the opposite direction, so in order to produce a fuel efficient vehicle car makers use more expensive, lighter weight materials in the construction of the vehicle. This increases the complexity of manufacturing (more different materials are being used) and raises the price of the vehicle. If you could drop in a drive-train which kept the weight the same that would change the industry dramatically.