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By Mark Kleis

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. 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.



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Steady gas prices and a recession have stunted hybrid sales, but that doesn't mean we should just write them off. Assuming that there will always be gasoline to burn and that it doesn't affect the environment, let alone world politics, at all is silly. The government is doing exactly what it's supposed to, looking well into the future when individuals can't see past their next fill-up.

I do agree that the technology will eventually become naturally viable in the marketplace, but until it does it will take government incentive. In my opinion, the sooner automakers incorporate auto start/stop and brake regen in all vehicles, the sooner we'll see negligible price increases from including this technology.

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U.S. Government Buys 1 out of 4 Hybrid Models Produced by GM and Ford



Hybrid vehicles have been on sale for more than a decade now, but despite all the efforts, they have not yet won broad acceptance in the United States. Two years ago, President Obama’s administration set out to to simultaneously support auto workers and a national transition to fuel efficient technologies by heavily investing in a government fleet of hybrids. According to a report from Bloomberg, Uncle Sam bought almost one out of every four hybrid cars produced by Ford Motor and General Motors since President Obama took office in early 2009.

The outcome, though, wasn't what they would have wanted it to be, as hybrid sales remain on a downward slope for the third consecutive year. Nevertheless, the U.S. General Services Administration (GSA) will continue to buy hybrid vehicles in the hope that the public will eventually follow suit.

“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.”

In the first two years of the Obama administration, GSA bought some 14,584 hybrids, or about 10 percent of the 145,473 vehicles acquired by the agency the same period. In 2008, hybrids accounted for just 1 percent of total government fleet purchases. Most of the cars were bought from Ford and GM. The prices for these models ranged from $23,072 to $47,079, with the report claiming that the government paid an average of $5,281 less for the cars than dealerships sticker prices.

According to data acquired by the news agency, GSA purchased about 14 percent of Ford Escape hybrids and around 29 percent of all Ford Fusion hybrids manufactured since Obama took office. In the past two years, the U.S. government bought only 17 Prius models and 5 Honda Civic hybrids.

The eco-friendly fleet purchasing trend will continue in the future with the GSA announcing that it will add all-electric vehicles such as GM’s Chevy Volt to the government fleet. President Obama has set a goal of 1 million plug-in vehicles on the road by 2015 and has committed more than $11 billion for this purpose.

A recent J.D. Power report said global sales of hybrids are expected to rise from 954,500 units this year to 5,2 million in 2020.



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