In what should be a marketing coup, the auto website Edmunds.com recently found that Ford Escape Hybrid buyers can pay off the extra sticker expense (compared to a non-hybrid Escape XLT) in less than three years, based on 15,000 miles of driving per year. This "payoff time" is far and away the shortest among hybrid vehicles with conventional counterparts. The Ford vehicle also compares favorably with Toyota's
At the same time, Consumer Reports recently found that fuel economy is now the top concern among vehicle buyers. The Escape Hybrid, as an affordable hybrid, certainly looks like a way to capitalize on emerging consumer trends, especially if Ford had decided to follow up with similar vehicles.
In March, it looked like Ford might embrace hybrids as a way to win back consumers. Back then, the company launched TV ads and offered low financing for the Escape Hybrid. The effect was fairly dramatic -- sales doubled in some markets and inventory disappeared. Then, in June, management backed off plans to expand hybrid production.
Instead, Ford is focusing on "flex fuel" models that can utilize high ethanol blends. Unfortunately, ethanol recently has been more expensive than gasoline. Ethanol prices are falling, but they will have to drop a lot more to save consumers cash, since cars and trucks are significantly less fuel-efficient when running on high ethanol blends than when running on gasoline.
Granted, General Motors
Meanwhile, Ford has lost an opportunity to reduce hybrid technology costs via economies of scale. Once again, it appears to be off track.
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Fool contributor Brian Gorman does not own shares in any of the companies mentioned. The Fool has a disclosure policy.
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