Hybrids – Vehicles, Battery & Hydraulic Technology

Personal Use of Hybrids Declines, Business Use Rises

June 03, 2010

Consumers who purchase hybrids are increasingly using them for partial or total business transportation, instead of personal use, according to CNW Research.

The Bandon, Ore.-based research firm compared how consumers intended to use the Ford Escape Hybrid and Toyota Prius from 2006 to 2010, for its upcoming "Dust to Dust" report.

CNW found that pure personal use declined from 74 percent in 2006 to under 55 percent in 201 for the Toyota Prius. A mix of personal and business use of the Prius increased from 14 percent in 2006 to 26 percent in 2010. Pure business use has remained steady in the 19 percent range since 2007.

CNW also found that pure personal use declined from 77 percent in 2006 to 64 percent in 2010 for the Escape Hybrid. A mix of personal and business use grew from 14 percent in 2006 to 19 percent in 2010. Pure business use also jumped from 8 percent in 2006 to 14 percent in 2010.

The higher price of hybrids compared to their conventional models is leading the shift from personal to business use of these vehicles, according to CNW's Art Spinella.

"Because of the higher price of hybrids - in many cases more than 30 percent greater than the base price of the same model using conventional power - many personal-use buyers opt to bypass the hybrid," Spinella wrote. "For businesses, hybrids offer positive public relations, some tax advantages and incentives from both government agencies and automakers. Also, hybrids can generate additional profits for the car companies once development costs are amortized."

Spinella said he expects the price gap between conventional and hybrid models to narrow in the future, as fuel economy requirements will encourage more hybrid sales in the next decade.

"The only way to meet those federal standards will be through some significant increase in hybrid share of total auto sales," he wrote.

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