Bank of America Corp. on Wednesday said it will offer $3,000 rebates to thousands of employees who buy hybrid vehicles, a move that could lead other large companies to provide similar "green" incentives.
The No. 2 U.S. bank is by far the largest U.S. company to offer such incentives, in an era of $3 a gallon gasoline.
Together with tax credits, the rebates might save consumers more than $6,000 per vehicle. Online search company Google Inc. and insurer St. Paul Travelers Inc. are among other companies that offer incentives to buy hybrids.
"This is a very genuine effort to do the right thing," said Anne Finucane, Bank of America's global marketing chief, in an interview. "To do it at Bank of America, it's a formidable commitment."
The bank's program covers some 21,000 employees working in or near Los Angeles, Boston and Charlotte, North Carolina, where Bank of America is headquartered. It ranks No. 1 in deposit share in all three markets.
"It's a very clever move," said Fariborz Ghadar, director of the Center for Global Business Studies at Pennsylvania State University.
"Historically, niche players might introduce such incentives, but with energy so much in everyone's mind, larger companies may be realizing they can make a big statement, especially in their dominant markets," he added.
Google offers employees $5,000 rebates to buy, or $2,500 to lease, hybrids. St. Paul offers a 10 percent discount on insurance for hybrids. Some other California companies also offer such incentives.
Finucane said Bank of America may as early as 2007 expand the program to its 202,500 employees.
Other companies may follow
Theoretically, the bank could shell out $608 million if every employee took a rebate, something it can afford given its $16.5 billion profit last year.
But the cost will likely be far less because most employees won't be in the market for vehicles at a given time, and still fewer will buy hybrids.
Hybrids comprise 1 percent of U.S. new car sales, though demand is growing. About 500,000 hybrids are on U.S. roads.
"If employees respond well, other companies will follow, especially because the cost of such a program are not likely to be very high," Ghadar said.
Corporate incentives supplement federal tax credits based on the Energy Policy Act passed by Congress last year.
Such incentives might help consumers offset the higher list prices on hybrids, which they might not otherwise be able to make up through lower fuel costs. But some automakers may not have the production capacity to meet demand.
Under Bank of America's program, a purchaser of a $21,725 Toyota Prius, the best-selling hybrid, could save $6,150, or 28 percent, including a $3,150 federal income tax credit.
A buyer of a Honda Civic hybrid could save $5,100, with a $2,100 credit, while a buyer of a four-wheel drive Ford Escape hybrid could save $4,950, with a $1,950 credit.
William Reinert, Toyota Motor Corp.'s advanced technology manager, in May told Washington lawmakers that Japan's largest automaker might produce more than 1 million of the vehicles annually within the next decade.
Detroit's Big Three automakers, General Motors Corp., Ford Motor Co. and DaimlerChrysler AG's Chrysler Group, also plan to produce more hybrids, though their plans are less ambitious.