Ford Penalized for Successful Hybrids
Poor Ford. The only one of the Detroit Three who took on the responsibility of guiding its future without government assistance is about to suffer a fate created by the success of its hybrid program.
A few years back Congress came up with a rebate plan to encourage consumers to gravitate towards more fuel efficient low emission vehicles. The hybrid was the perfect vehicle to become a beneficiary of tax credits.
Ford has received great reviews for two of its hybrid offerings, the Ford Focus and Mercury Milan. Unfortunately if you were contemplating the purchase of a 2010 version of either of these hybrids and benefit from the $3,400 tax credit you would receive you will be out of luck if you didn't buy by March 31.
Ford has sold 66,000 of its hybrid fleet which also included the Ford Escape and the Mercury Mariner SUV. General Motors has sold half that amount. With 66,000 units being the government threshold for the tax credit, Ford is actually being penalized for having more desirable hybrid offerings!
Ford has banked heavily on the much publicized release of the new 2010 Focus hybrid but might suffer in sales from the phasing out of the tax credit. As it stands, the credit will be slashed from $3,400 to $1,700 after March 31. After that, it will drop an additional 25% in the fourth quarter of this year and then be totally phased out after March 31, 2010.
Penalized for success and rewarded for failure? Something doesn't seem right.