LeftLaneNews

Obama administration largest buyer of domestic hybrids

According to a new report, since taking office, Obama's administration has purchased roughly 25 percent of all hybrids sold by Ford and General Motors.

Since President Obama took office two years ago, the U.S. General Services Administration has purchased just shy of 25 percent of all hybrid vehicles sold by Ford Motor Company and General Motors in the U.S.

To understand the significance of the purchases, that means that, according to Bloomberg, the Obama administration has increased the percentage of hybrid vehicles purchased by the federal government from one to 10 percent in just two years. This 1,000 percent increase in take rate means that of the 145,473 vehicles the U.S. government has purchased in the last two fiscal years, 14,584 have been equipped with hybrid drivetrains.

For example, 64 percent of all Chevrolet Malibu hybrids - a model that was discontinued in 2009 due to a lack of consumer demand - wound up in the government's hands. The government also owns 29 percent of all Ford Fusion Hybrids and 14 percent of all Ford Escape Hybrids. By contrast, only 17 Toyota Prius hybrids and five Honda Civic hybrids were ordered by Uncle Sam.

Government goes against the tide
This trend of ever increasing hybrid vehicles purchases by the federal government is in fact directly opposing the current trend in the consumer market that has led to decreasing hybrid sales over the last two - going on three years - for all automakers. Bloomberg points out that, "The government is boosting investment in a technology that has failed to win broad acceptance after more than a decade in the marketplace."

"At some point, the reality is that for this technology to be accepted, it needs to be done without a government crutch," Jeff Schuster, director of forecasting at J.D. Power & Associates, said to Bloomberg. "But without a huge gas-price increase or further government demand, the natural demand just isn't to be there."

Expect the trend of the government subsidies and purchases to go against consumer take rates for years to come as the technology works its way to being naturally viable in the marketplace.


References
1.'Obama Bolsters U.S. Hybrid...' view