DOD Plug-in Purchases May Hurt LSV Market

The Department of Defense has announced plans to purchase approximately 1,500 plug-in vehicles, mostly Chevy Volts over the next few years.  This could potentially hurt the LSV market.  The DOD has made it a priority to reduce petroleum consumption and one approach is to replace passenger vehicles used on bases and in other areas with alternative fuel vehicles.  Starting in 2007 and 2008, primarily with the US Army, LSVs were tested and then purchased in large quantities.  At the time, all the military branches were drawing up plans to purchase LSVs.  In total, these purchases would number several thousand per year.

However, government data on Federal fleets indicates that these large volume purchases did not materialize as expected.  While a number of factors could have impacted LSV sales including budgetary and performance issues, the advent of other electric vehicle alternatives such as the Volt may have played a role as well and might do so in the future.  Although considerably more expensive than LSVs, the Volt does offer highway capability, more versatility and overall greater vehicle performance.  Until the comparative cost versus performance trade-offs can be evaluated over the next few years the long-term impact on the LSV market won’t be known but in the short-term there will likely be fewer LSV sales in this market sub-segment.  Learn more:

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