Obama Orders 2,500 Hybrids

April 11, 2009

In a win-win move for both the environment and the US auto industry, President Barack Obama announced on Thursday that the US General Services Administration would order 17,600 fuel-efficient vehicles—including hybrids—from GM, Ford, and Chrysler by June 1. The purchase goal is fuel economy that’s 10 percent higher than the vehicle being replaced.

While auto sales have fallen 36 percent in the first quarter of 2009 compared to last year, the government’s purchase is still only symbolic, representing less than two-tenths of one percent of total US annual sales. But lawmakers from auto-industry states like Michigan and Ohio reacted with fervent support.

2500 Hybrids by Tax Day

Obama at SCE

Last month, President Obama visited Southern California Edison’s Electric Vehicle Technical Center. He repeated his promise to put 1 million plug-in hybrids on US roads by 2015.

The first step will be an order for 2,500 hybrid sedans by April 15. Qualifying cars include the 2010 Ford Fusion Hybrid, the 2009 Chevrolet Malibu Hybrid, and the 2009 Saturn Aura Hybrid. The Ford Fusion Hybrid received excellent reviews and generated intense public interest, but the incremental mileage improvements of the Malibu and Aura mild hybrids have neither sparked much enthusiasm nor sold particularly well.

Moving from a full-size sedan like the Chevrolet Impala to the Fusion Hybrid saves a lot of gasoline, though. Because gasoline mileage is not a linear scale, converting from the Impala’s 20 mpg to the Fusion Hybrid’s 40 mpg saves 2.5 gallons per 100 miles. Going from the Fusion Hybrid to a plug-in’s 100-mpg-equivalent displaces approximately 1.5 gallons—though it cuts costs, since driving a mile on grid power costs 3 or 4 cents versus 10 to 15 cents on gasoline.

The total cost of $285 million would come from the $787 billion economic stimulus bill passed by Congress last month. A statement from the White House said the entire purchase will “reduce gasoline consumption by 1.3 million gallons per year and prevent 26 million pounds of carbon dioxide from entering the atmosphere.”

The President also highlighted the program’s benefits for the US auto industry. “I am 100 percent committed to a strong American auto industry,” his statement said. Obama called this program “only a first step.”

Within the total $285 million cost is $15 million that the GSA, the government’s purchasing arm, will allocate to orders for advanced technology vehicles, including “commercially available” buses that run on either compressed natural gas or hybrid-electric power. This category also includes all-electric vehicles, which might include neighborhood electric vehicles for certain government uses. That order is to be placed by September 30.

Weighted Toward Small Cars

With at least some vehicles in the order to be expensive buses and commercial trucks, the average per-vehicle cost of $16,200 is likely to indicate large numbers of the smallest US-built cars.

Even at the heavily discounted rates offered for government fleets, the order will likely include US-built high-mileage vehicles with conventional gasoline engines. These could include such vehicles as the 2009 Chevrolet Cobalt, 2009 Ford Focus, and 2009 Dodge Caliber—all of which have seen their sales fall as the price of gasoline plummeted.

Sadly for the civil servants who will drive them, some of these cars receive poor consumer ratings in their categories. Only the Focus is remotely modern, and its sales have held up better than the other two. The Cobalt will be replaced for 2011 by the new global Chevrolet Cruze, and the aging Caliber received tepid reviews several years ago on launch.

Ambitious Administration Goals

The Obama Administration’s auto task force is currently pressing GM and Chrysler to improve their restructuring plans if they expect additional funds beyond the $17.4 billion received to date. Obama’s goal of creating a viable auto industry will emphasize building more efficient cars.

Other policy measures include working with Congress to pass a “cash for clunkers” bill, which would subsidize trade-ins of older, less efficient vehicles for new, high-mileage replacements. Those vehicles, however, would likely not be restricted to US-built models, to improve the array of choices for car buyers and avoid running afoul of international trade restrictions.

During his campaign, Obama pledged to put 1 million plug-in vehicles on US roads by 2015. He also said he wanted to convert the White House fleet to electric vehicles, and would urge the government to make half of its new-car purchases plug-in hybrids or electric vehicles by 2012. But experts question whether this goal is achievable, given the huge capital investment required for battery manufacturers to build domestic lithium-cell plants and for automakers to tool up for that volume of new vehicle designs.


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  • Todd1964

    Great!! Now, the government is competing on the purchase of hybrids. This makes it very difficult for those of us in smaller states. It is extremely hard to get a hybrid of our choice. I would like the FFH and now with orders from the Government, the price is going to stay very high and availability very low in my state. Dealers here are asking for full-sticker, plus additional dealer fees! They will not even take an order for a reduced price!

    Mr. President, the auto industry is hurting because their “current” inventory and non-hybrid inventory is not selling! Buy that stuff and convert to Natural Gas, heck you seem to think you can afford it!

  • Collin Burnell

    Hmmm. I don’t think so. I got $1000 off of my Nissan Altima Hybrid the first month they were being sold. Shop around some more and you will find what you are looking for. Actually the 2008-2009 Prius’ are in abundance. Check CarMax. They have PLENTY of inventory. In the case of the Ford Fusion Hybrid… if you wait until they have been out for a few months, you’ll get a good price. The Hybrid ‘competition’ will be heating up this year. The days of premium (over) pricing should be coming to an end.

  • Hurls

    Well, they do not even sell the Altima Hybrid in my state! That is what I am saying, smaller states have a very hard time getting certain hybrids. Of course, there are several Prius (09 and older) and Civic’s on the lot, but only after supply caught up with coastal demand. Basically, if you live in a non-coastal state you do not see multiple hybrids on the lots until they have been out about two or three years. Sure, they come in a very limited supply (one or two per dealership), which is why they get full sticker or more. The local Ford Dealers (I have visited with six) all have said they want full sticker for the limited supply of FFH they are being allowed. I offered to pay $1K above the invoice if they order me one (which also has dealer hold-back profit included) and they all said NO! I was told by ordering me one that it would count towards their annual allotment and they can get a higher price if they just get it for their lot. I did get an offer of $500.00 over invoice from a California dealership, which says they have a huge allotment. So, I can order and have it shipped to me and that will add $600.00 to $800.00 to the price.

    Plus Ford is already behind on orders for the FFH and our Government has decided to spend our money and order new hybrids for our government employees. Sorry, but the Government should have to play the same game of finding one on the lot! Obama means well, but he is spending like a drunk lottery winner in a liquor store! Of course, I will play the political game and President Obama can order me a 2010 FFH 502A and I will give him the “factory” price that he is getting!

  • Ross Nicholson

    You could do what I did and build your own 300 mpg car. It’s not rocket science.

  • Rusty Ranger

    I want it now, and I want it at a reduced price so low that the manufacturer actually loses money on the sale, and the saleman and dealer do it for free, and I want it delivered to me, and I will blame any troubles I’m having on you, or the government, or the competition, or somebody else, . . but it’s not MY fault.

    So Ford ponies up and builds a car that we actually WANT, and then (though we are complete believers in a free market and minimal government) we complain when Ford tries to get Market Value for each sale (so they don’t go bankrupt, or at least cut wages on the line [of course, although I'm underpaid, everyone else are overpaid, lazy slackers]).

    Ford originally only planned a tiny percentage of Fusions to be hybrids, because at 2 bucks a gallon, surveys showed most people wouln’t pay 6 large extra for a slower car with better gas mileage. So the government steps in and says, “go ahead, build ‘em, we’ll gaurantee a minimal sales level so you don’t get stuck holding more stock that nobody wants”.

    No matter what the gov does, somebody isn’t happy. You can please all of the people some of the time, and some of the people all of the time, but you just cant’ please all of the people all of the time (with apologies to Barnum).

  • Hurls

    Rusty,

    An offer of $1k OVER invoice is hardly wanting it at a loss to anyone! Save the lecture for someone else that wants something for nothing! You probably live somewhere coastal or where large quantities of new hybrids are headed. Yes, I would like the FFH before it is sitting on lots (Carmax, etc.) all across this country and the resale values plummet. Nothing wrong with that is there Master Rusty? As for the government, last time I looked they do not have money to order so many new vehicles. I think Obama is doing a great job, but he needs to scale back the spending. Just when do you think we are going to pay for all of this?

    Of course, no matter what the government does, somebody is always happy; no matter the consequences.

  • Samie

    I’m sure paying MSRP or up to 1k more is expected but I would not pay anymore yes its a scam when most dealers assume you are some “rich green snob” that will pay anything to help save the earth. This is the same type of assumptions that annoy many women who buy cars, feeling like they are not treated the same as a man would be treated. Anyways stick to your guns even make up a story of getting one ordered from out of state. Go with something like its too bad I can’t support my local economy or some other junk..like the out of state guys want to showcase my story as having exceptional service over the others…. I’m a honest person but every time I get a new vehicle I remind myself that I’m not usually dealing with the most honest people.

    Anyways a car like the Hybrid Fusion will make a excellent commuter car. The power is not outstanding on a Fusion but it seems that Hybrids are improving in this category and the Fusion maybe attractive to people who like more conventional types of vehicles.

    As for the Government, it maybe smart to buy at this time, if they get better rates due to poor sells of cars. But they should be careful, they need to stick with cars that are marked for replacement. Don’t buy vehicles just to boast sells of hybrids or car brands. Fuel economy should be key not getting vehicles for 7-9K more that get only a 2-5mpg improvement. Would be nice to see all those Chevy Suburban Gov. type of vehicles switched over to Ford Hybrid Escapes. Up-front costs to save money in fuel over the long haul is smart even if its a break even proposition but the tax payer should get the most fuel efficient cars foreign or domestic.

  • Blue

    I’ve been told Ford Fusion Hybrid is made in mexico. Now our stimulus money is going to mexico.

  • Canadian

    If it’s not rocket science. Could you teach us on how to convert a car to get 300 mpg? My dream is to stop buying dirty oil from company that support terrorism in middle-east.

  • Lost Prius to wife

    Hurls, try going through a reputable auto broker or buying from another state’s dealership. In 2006, by going through my credit union’s suggested auto broker, we only had to pay the sticker price. Yet we got the same dealer prep ($560 added to sticker price), fabric mats ($100 added to sticker price), and no additional mark-up (~$500 to $1000+ depending on which dealership). The dealership that our broker got vehicle from, less than one mile away from the broker, would have charged us ~$1900 more than the sticker price.

  • Lost Prius to wife

    Samie, I like your comments, but I do not think the government will allow any “foreign” cars into the mix. If Toyota starts building the new Prius in the south, maybe it would be allowed to compete, but I still doubt it.

    Blue, I am fairly certain that there are very few cars in any country that are made with 100% of that country’s parts, including Toyota and Honda.

    Canadian, Ross Nicholson is correct. The internet has numerous articles on the subject of increasing mileage (water cars, hybridizing, hypermiling techniques, air / gas flow sensors, etc.). The ability to reach 300 mpg is there. It will always come down to where the crossover point is, time wise, for how much money one wants to spend up front compared to the money saved in the long run. For me, recover times of about five years or less are acceptable. Since I usually keep cars longer than ten or fifteen years (or 300,000+ miles), I could use a long period of time, but that would result in less savings for me. Even driving technique will save money. EPA says that I can get only 25 mpg from our 1994 Celica, but I can get 29.5 mpg. I know that it does not seem like much, but it amounts to an ~18% increase in mileage. We may even sell it before 300,000 miles for something that will save us more mileage and money (it is only 200,000 miles old at this time).

  • Rob M

    The goal should be to create American jobs and get the entire American fleet of cars and light trucks up to an average of 45-50 mpg ASAP. The way to do that is to have a fee-bate program that will drive design innovation by creating immediate and sustained demand for high MPG vehicles. Within a vehicle class, e.g. a 4 person car, a consumer would get an instant rebate on a car that got greater than a certain MPG and pay a fee for a car that got a low MPG. The program would be technology neutral (the most cost effective high MPG design wins) and would be revenue neutral ( no net cost to the Gov).

    And yes the gov should buy vehicles for its fleet that create the most American jobs. It should buy the most cost effective High MPG vehicles that are assembled in the U.S. and whose parts are 40% (in value) made in the U.S. If Toyota and Honda meet those requirements, fine. This will push U.S. companies to innovate.

  • Lost Prius to wife

    Rob M, I think you ideas are good, but can anyone get the government to buy into them? I might like a slightly higher percentage of parts “made in the US”, but 40% would be acceptable to me.

  • sean t

    Lost Prius to wife,
    I don’t want the info from the web. I want to know what Ross did to get 300MPG. The 29.5 MPG on your Celica is just 10% of what Ross said.

    Ross Nicholson,
    Can you share with us your “not a rocket” science or it’s a secret? We’re dying to know.

  • Lost Prius to wife

    sean t, your right. It would be nice to hear how Ross Nicholson did it. My one associate, that does the all electric conversions, does 300 miles per charge (mpc) with large plug-in battery packs along with regenerative braking, lower speeds (I believe <45), and hyper mileage technique. It is capable of 90 mph, but it will cost one in the “electric mpg”. The last conversion was an older Mustang. It still will get over 100 mpc with any normal (keeping to the speed limits) driving.

  • Anonymous

    why

  • Zero X Owner

    re: Ross Nicholson. Who cares? MPG is so last century.

    My made in the US by a US company already sold to regular Joe SixPacks street legal highway capable electric vehicle that I use as my daily driver commuter uses 2 kWh per 100 miles (less than $0.25 in most states) with regular style (expect for the 0-30 mph in less than 2 seconds part) driving. Beat that. For those who have been hiding under a rock, a gallon of gasoline has about 36 kWh (DOE Kids Page) of energy, so do the math.

    Oh, it’s 100% wind powered, so don’t try the long tailpipe fallacy on me.

    Yawn, wake me when everyone gets a clue about electric drive. I’m sorry to sound dismissive, but its getting increasingly painful to see the utter lack of fundamental general education about electric drive efficiency and capability when it’s been used for transportation for decades.

  • Johnny

    Hmmmm, Lithium batteries? Guess where we get Lithium from? How about Bolivia!!!! Bolivia hates the United States more than the Arabs we are held hostage by for oil. Great move Obama. Try investigating the whole situation. Drill drill drill.

  • Looks things up

    Sigh. Do your homework.

    Tired old, wrong fallacies about lithium from Johnny.

    1. Other energy carriers are developing, so if even all of worst fears and misunderstandings abou lithium came true, it’s a simple matter of using whatever energy carrier is best/cheapest at any time and switching energy carriers when what’s best/cheapest changes. It’s electric drive that matters, with its vastly superior efficiency and performance.

    2. Lithium is recyclable. Oil is not. Lithium is an energy carrier and does not get used up. The particular carrier it’s used in becomes obsolete eventually and can be plug and play replaced with a higher perfroming or cheaper one using the same lithium if desired. Once used in a gasoline engine as an energy source, oil is gone forever.

    3. No one part of the world has a majority of lithium, although the United States has susbstantial amouts. Lithium in general is abundant on the planet (hundreds of billions of tons), not especially concentrated in any country, and is currently used in make up and other common products. There is currently an oversupply of lithium power cells.

    4. Despite the shortcomings that every country has, Bolivia is a democratic country in Latin America. Bolivia does not hate us more than middle east terrorists, but if they don’t want to sell lithium to global commodity markets, that’s fine as there’s no shortage of other places for energy cell makers to get it, including the US.

    5. Collecting partially used makeup kits from landfills in the US could provide all the lithium that electric vehicles will need for decades, but there are even cheaper sources for now.

  • Big whoop-de-nothing

    For those who can’t do research, 2,500 hybrids is a 5 day supply. Big whoop. Way to sluggishly follow the pack, gov’t.

    I bet the other 85% of fleet purchases were full size “Flex-Fuel” SUVs which means they get even worse mileage, if they ever bother to use E-85 instead of gasoline (which is now E-10 or E-20), which would be rare indeed.

    Peterbuilt has a wicked cool new diesel hybrid utility truck out.

  • NOBama in 2012

    Republicans say “drill baby drill” and NObama says “Buy Baby Buy”. I say “Think Baby Think”. Think about what we are doing with our taxpayers dollars before we start buying up $285 million worth of cars nobody in government needs right now.

    Just because you buy them NObama, doesn’t mean we all are going to empty our empty pockets and follow your lead. What’s the point in this purchase anyway????

  • Federal Mule

    I hope one of these hybrids lands in my Federal Building for use by my department (the odds are probably worse than winning the lottery, but I can dream, right?). Right now we’re driving a Jeep Liberty – what a completely miserable excuse for a vehicle THAT is.

    GSA buys vehicles all the time. Anything that can be done to decrease the amount of gas used to keep Feds mobile will be a savings to the government. And hopefully the policy will continue into the future so that the impact will multiply.

    I’d like to see more Governors follow Obama’s lead. Several years ago Gov. John Lynch of NH ordered all state departments to decrease overall energy usage by 10%, and all replacement cars to get at least 33 mpg. Small changes resulting in significant savings for state taxpayers.

  • Club Penguin Cheats

    Yawn, wake me when everyone gets a clue about electric drive. I’m sorry to sound dismissive, but its getting increasingly painful to see the utter lack of fundamental general education about electric drive efficiency and capability when it’s been used for transportation for decades.

  • tapra1

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