The US government program paid people cash to trade in their old clunkers for new models. In theory the new models were to be more fuel efficient too – although even the Hummer H2 made the list of eligible replacements.
Despite the rebate the Prius still cost more to own than other midsize cars. During the program Prius sales increased a little but it didn’t make the Top 10 most popular Clunker Replacements list. Neither did the H2.
In Strategies for the Green Economy, Cara Pike writes that the American Values Survey has tracked a steady decline of US interest in ecology values and a rise in fears about the economy, health care and security. These US trends are the opposite of values trends in other developed countries.
That back story played out in the Tale of Two Priuses.
So, cleantech companies face tough choices in the US. Going to market with a price premium attracts Idealists and Greenest Americans. But these segments may be too small for a product to achieve the economies of scale needed to lower prices and win in the mass market.
Or, cleantech companies can lobby to increase the prices of consumables like gasoline, electricity and water. Then the superior efficiency of their products delivers the lowest total cost of ownership. Or cleantech products can be launched without a price premium. So products enjoy a total cost of ownership advantage from Day 1. It’s a strategy that bets on rapid and seamless transition from Early Adopters to the mass market.