Bank of America has expanded its program to subsidize employee hybrid purchases.Â Â Work at least 20 hours a week for Bank of America and you’re eligible for $3000 to go with that hybrid purchase (but watch out for the payroll and income tax implications).Â Marrying up with tax benefits for buying a hybrid and Bank of AmericaÂ eliminates the Cost to Buy penalty for a hybrid, making that Cost to Own benefit come true for day one.
And, the employees recognize this …
“Our associates were very enthusiastic about this program and have responded well to the opportunity,” said Anne Finucane, Bank of America chief marketing officer and head of the company’s environmental council. “In fact, since we launched the program and within the three cities where it was piloted, hybrid vehicle purchases by our associates have more than quadrupled. The program continues to expand our commitment to the environment and offers our associates a way to participate in making a difference while cutting down on their commuting costs.”
Is this, then, the price point at which market penetration skyrockets for hybrids?Â
Now, what is the business case for such subsidy?Â
WhenÂ introduced as a test program in Boston, Charlotte, and Los Angeles, the press release included the following:
Â “Given the size of our commuting associate base, the hybrid program expands our commitment to the environment and helps our associates to participate in making a difference while cutting down on their commuting costs,” said Anne Finucane, Bank of America Global Marketing & Corporate Affairs executive and head of the company’s environmental council. “We are pleased to be one of the first corporations offering this benefit and strengthening our long-standing leadership on environmental issues.”Â
Well, is this simply because “Bank of America is committed to continued leadership on environmental issues”? Is this simply leadership? A path toward scoring public affairs points (such as this post) and/or gain credit in environmental stewardship? Perhaps all of those … and, well, there is reason to believe that this is an extremely popular program with employees for the “greening” impact, the direct payments, and the chance to lower commuting cost. Is the core business purpose that this improves employee morale and loyalty to Bank of America?Â
In any event, whatever the purpose, this is not isolated to Bank of America — even though this is now the most far-reaching program.Â Dozens of leading U.S. companies, including Google, Bank of America and Timberland, already reward consumers who buy hybrids.Â Hyperion Solutions started offering $5000 payments (200 a year) back in 2004. And, unlike Bank of America’s one-shot offer, this is available to employees every four years.Â Â And, unlike Bank of America, the rebate is offered for fuel-efficient vehicles (more than 45 mpg) rather than hybrids (which include SUVs, the best of which get mileage only in the low 30s).
“Companies and individuals have extraordinary power to make a difference,” said Godfrey Sullivan, president and chief executive officer of Hyperion (Nasdaq: HYSL), in announcing the initiative in a written statement. “One of the most important steps an individual can take to improve the quality of our air is to drive a vehicle that goes further on a gallon or liter of gas. One of the most important steps a company can take is to help them.”
In other words, just as in Government policy, the best results are achieved if the target is technology neutral — subsidizing hybrids to subsidize hybrids does not promise a path forward to a sustainable and prosperous future. Hyperion recognized that — Bank of America and the Federal Government evidently not.
Now, Bank of America seems to have found a price point … and Hyperion a better target.Â Combining the two and spreading through Corporate America could truly accelerate the path toward a more fuel efficient transport future.