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Wednesday, November 24, 2010

Hard Economic Realities for Hybrids

Bloomberg.com, after interviews and research has brought some harsh realities of the market & economics of hybrids. I personally own a hybrid (Toyota Highlander), and am usually positive in my reports, but to honestly report reality, I have to report the research and expert interviews.

Bloomberg quotes a J.D. Powers Director of Forecasting:

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.


J.D. Power also reports "Global sales of hybrids, plug-in hybrids and electric cars are projected to be 954,500 vehicles, or 2.2 percent of the 44.7 million passenger vehicles projected to be sold this year, J.D. Power said in an Oct. 27 report. That may rise to 5.2 million units in 2020..."

Others interviewed in the article were concerned that government subsidies seem to be needed to make economic sense for consumers. The article states that "The government purchased about 64 percent of GM’s Chevy Malibu hybrid models and 29 percent of all Ford Fusion hybrids manufactured since Obama took office in 2009, the data show. GM stopped making the Malibu hybrid in 2009 after lack of consumer demand."

Bloomberg.com also quotes Dan Becker, Director of the Safe Climate Campaign with a positive view of the US government's alternative fuel vehicle purchases:
“At a time when we’re just beginning the era of the hybrid, it’s a positive sign that the government is stepping up to the plate and helping build that market.”

The article states that the Obama administration is promising over $11 billion in taxpayer funds to develop plug-in hybrid vehicles.

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