Do hybrid incentives match up with sales?

Hi everyone, Clean Vehicles Program Assistant Lindsay Vidal here.  One of my responsibilities is to work to keep the hybrid incentives list up-to-date (Scott and I are going over the state legislative records now and updating progress on legislation).  As I was looking for incentives, I ran across R.L. Polk & Co.’s list of the top ten states for hybrid registrations in 2005 (below).

Top 10 Hybrid States (2005 Calendar Year)
Rank  State                 Total New Registrations    Share of U.S. Volume (%)
1        California           52,619                             26.4
2        Florida              10,470                               5.3
3        Texas                 9,632                               4.8
4        New York            9,372                               4.7
5        Virginia               8,650                               4.3
6        Illinois                 7,286                               3.7
7        Washington         6,970                               3.5
8        Pennsylvania       6,948                               3.5
9        Massachusetts    6,060                               3.0
10      Maryland             5,673                               2.8

I thought it might be interesting to do a cross-section between the top states and see what their incentives looked like, just to see if there were any correlations.  Here’s what I found:

California: Hybrid HOV is the biggie, but two major cities, L.A. and San Jose, have hybrid free parking perks.  Also note that the Generation 1 Civic Hybrid was always the cleaner variety in terms of smog forming emissions because of the stricter California emission standards. 

Florida: A bit of a surprise to me at #2 on the list.  They have a hybrid HOV, but it has really seen its major public expansion more this year rather than in 2005.  Only other attempt at a hybrid tax benefit died in a State Senate committee.

Texas:  San Antonio has added a parking perk, but not until this year.  Austin has really been out on the forefront on hybrid benefits, including leading in plugin hybrid development.

New York: The Big Apple has had a “green car” tax incentive for some time (it’s scheduled to sunset this year), and is now experimenting with Hybrid HOV and EZ Pass discounts.

Virginia: Long the #2 hybrid state, and the first to go Hybrid HOV.

Illinois: The city of Wilmette offers a discount on its vehicle registration stickers for hybrids and other fuel efficient vehicles, and the governor has suggested some hybrid perks, but nothing major in the land of Lincoln.

Washington: No emissions inspection and a future (2009-2011) lifting of the sales tax on hybrids.

Pennsylvania: $500 tax rebate and before had a similar, but more cumbersome program.

Massachusetts: Lots of proposals, but nothing on the books.

Maryland: No emissions inspection, and in the fall of ’05, Baltimore started giving hybrids parking perks.

So, no real causative link here, as at least two states in the top ten (IL and MA) didn’t provide any state hybrid benefits in 2005.  Indeed, you could make an argument that it might be the burgeoning popularity of the vehicle in the state that in turn gets the attention of city and state legislators to develop, continue, or expand hybrid incentives.  Kind of an interesting chicken-and-egg argument. 

Certainly this shows that incentives are only one small part of the purchasing puzzle -- increasing consumer interest in a vehicle, but there are many other factors, including personal values, vehicle needs, and socio-economic constraints, that affect vehicle purchasing decisions. Yet, in light of continued concerns about U.S. oil consumption and greenhouse gas emissions, it remains important to provide consumers with sound incentives to help both expand the hybrid market, and direct its development toward hybrids that can do the most to reduce U.S. oil consumption and tailpipe emissions.

It will be interesting to see how the R.L. Polk & Co. top ten list and the provision of hybrid incentives change in the upcoming years in response to gasoline prices, an expanding hybrid market, and new political climate.

Posted by: Lindsay

Comments

[Markus]

I would suggest a different approach. Using the US share % is highly dependent on the population of the state. So it's not surprising to see many of the most populated states on the list.
What really matters is the percent of hybrid cars sold compared to the total sales in each state. That normalizes the data for the state population.
Take for example Colorado. I believe it has a high percentage of hybrids, in part because we have the highest state tax incentives of any state (~$3400 for a Prius). However, CO will never make the top 10 list of total US sales because of it's small popuation. Please try to redo your analysis.

[John Acheson]

Hybrid buyers don't switch away from conventional cars for tax incentives.

According to my research there are two main variables, fuel and environment.

Tax benefits, tax credits, tax deductions, local taxes, city taxes, county taxes, excise taxes, income taxes, etc. are beyond the scope of most purchasing decisions whether or not it's a hybrid or flat screen or iPod...

As a registered tax preparer, I've found that most buyers don't even know what to do with the tax benefits.

People buy hybrids to be selfish and change the world at the same time. To save money in front of everyone at the gas station with a big bumper sticker that says, "you pollute more than me!"

[pete]

Arnie has a huge following, do you think that is the reason why the state of california is top of this chart