Wednesday, November 24, 2010

Hybrid cars "still not cost-competitive"; US gov't buys one-quarter of domestic production

Bloomberg reports:
“The lesson learned is that it isn’t easy to make these vehicles mainstream,” said Brett Smith, who specializes in alternative propulsion vehicles at the Center for Automotive Research in Ann Arbor, Michigan. “They are still not near the point where they are cost-competitive in the market.”
“At some point, the reality is that for this technology to be accepted, it needs to be done without a government crutch,” said Jeff Schuster, director of forecasting at J.D. Power & Associates in Troy, Michigan. “But without a huge gas-price increase or further government demand, the natural demand just isn’t to be there.”
But the Obama administration is creating demand.  Bloomberg used a FOIA request to find out about the GSA's shopping spree :
President Barack Obama’s administration has bought almost a fourth of the Ford Motor Co. and General Motors Co. hybrid vehicles sold since he took office, accelerating federal purchases as consumer demand wanes.
The U.S. General Services Administration, which runs the government fleet, bought at least 14,584 hybrid vehicles in the past two fiscal years, or about 10 percent of 145,473 vehicles the agency purchased in that period, according to sales data obtained by Bloomberg under a Freedom of Information Act request. In fiscal 2008, hybrids accounted for less than 1 percent of government purchases, the data showed.
Federal "stimulus" money allocated to the GSA is paying for three thousand federal hybrid purchases.'s Eric Loveday comments:
The GSA's hybrid vehicle purchases have boosted sales of some of Ford's and GM's gas-electric models. At the same time, the government agency has failed to help out automakers such as Toyota, Honda, Nissan, BMW and others that employ thousands of U.S. workers. It's a one-sided buying binge that has impacted the bottom line of two automakers.

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