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.

Source: Bloomberg / Businessweek