Jackson noted that trucks were still 53% of the business. As far as the hype and hope of hybrid and electric vehicles, there is a lot more talk than there is reality. He noted, “Yes, interest is extremely high… lots of conversations… 70% of our customers like to talk about hybrids. But, I have news for everybody at the end of the day it is about price. And consumers aren’t going to pay the price premium for electric vehicles and hybrids, even with the government subsidies.”
To show just how little of the business is really migrating, Jackson said that of that 70% of customers having an interest in hybrids, only about 2.5% of the customers actually buy the hybrids or electric vehicles.
On the Chevy Volt from General Motors Corp. (NYSE: GM), Jackson called it a technical marvel and he said people like to drive it. Unfortunately, he went on to note, “Customers say, ‘I will take a Chevy cruiser at 42 MPG and at half the price.'” He even noted that these vehicles often have $7,500 of subsidy in them, or $10,000 in California, so if you take out the subsidy there is nothing happening there.
Mr. Jackson ended by noting that prices of hybrid and electric vehicles will have to come down dramatically and at the end of the day. He even threw in the price point argument by saying that Americans are very practical and going to weigh what they save at the pump through time versus the higher up-front costs of these vehicles.
The question we would ask our readers is “What does this say about the world of hybrid and electric vehicles versus gas guzzlers?” It is probably not time to go out and short sell those oil companies any time soon.
The full CNBC video interview is here, and it discusses much more than just hybrid and electric vehicles.
JON C. OGG
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