From: CleanTechies Guest Author, Clean Techies, More from this Affiliate
Published May 7, 2012 10:18 AM

Hybrid Vehicles Create Cost Advantages for Businesses

High fuel prices are back and are slowing our economy's growth, eating into businesses' profit margins and sapping household discretionary budgets. Today, consumers have a range of options for buying hybrid or even electric vehicles to help reduce their fuel costs. But businesses are far behind consumers in their adoption rate of hybrid vehicles. However, high fuel prices have created conditions in which hybrids are now sound business investments. Those businesses that take action now will outperform their competitors.

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Commercial vehicle market

Excluding long-haul tractor trailers and passenger cars, there are more than 10 million vehicles in business fleets in the U.S. comprised mostly of delivery trucks, cargo vans and pickups. Due in part to a lack of government regulation of commercial vehicle fuel economy standards (at least until President Obama's new regulations go into effect in 2014), most of these vehicles have a combined fuel economy well below 15 mpg. Many Fortune 1000 businesses operate hundreds or even thousands of vehicles in their fleets and watch rising fuel costs eat their margins. So why have hybrids seen little adoption in the commercial vehicle segment, where fuel savings for each vehicle can range from $2,000 to more than $4,000 per year at current fuel costs?

Businesses make rational investments

Businesses use their vehicles as tools to deliver goods or services. Managers have been reluctant to pay more for efficient vehicles, such as hybrid trucks, because they could not justify the investment based on the fuel savings available during periods of lower fuel prices.

Higher fuel prices, improved technology, and an increasing number of hybrid commercial vehicle models at different price points have created the right conditions to spur adoption. Hybrid commercial vehicles are now affordable for an increasing percentage of fleet vehicles, and the purchase of hybrids can provide an adequate return to justify the investment.

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