My ans is B.

Offering free rentals would drive up the price of the electric cars which can become another impediment to the acceptance of eletric cars.

B

This is a costly proposal.

I ruled out B thinking people already arent buying the electric cars so rise in price would not really matter to them..

can anyone suggest why is A wrong?

Plan: Give out free rental of usual cars for every 1000 miles of electric cars usage; maybe because people can make extended trip using the normal cars. It makes the offer attractive for users who were rejecting to buy an electric car just because they could not make extended trips. This plan should have definitely increased the sales, according to the strategist.

So, what could be wrong with the plan that may rule out its adaptation by the company?

B. Because a majority of commuters drive at least 100 miles per week, the cost of the producer of making good the offer would add considerably to the already high price of electric vehicles.

I find this sentence convoluted. Let's break it:

Because a majority of commuters drive at least 100 miles per week: So, approximately every 10 weeks, they become eligible for a free rental. Okay so far. This free rental is borne by the producer of the car.

Now,
"the cost of the producer of making good the offer would add considerably to the already high price of electric vehicles."
That's something additional that we see. It says that the producer will increase the electric car price because it's giving the offer. Bad question, because the plan should have mentioned this in the passage.

Anyway, if it's true that electric car will become costlier, then another factor comes into picture. Money; something although not mentioned in the passage, but can be a good factor to fail the plan. B is the best of the lot.

So, as per B, the plan takes care of issue in the passage, but gives rise to another perhaps more concerning issue.

A. Many electric vehicles that are used for commercial purposes are not needed for extended trips.
This is a fact that doesn't concern the discussion. We're dealing with an issue where purchasers are drifting away from electric car because they can't use it for occasional extended travel. And here, this pitiful A is telling us about SOME electric cars that are not needed for extended trips. Neither the author of the passage nor should we be concerned about this. Simply: Out of scope.
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~fluke

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Your conclusion is correct AND you think "A" weakens the argument by attacking the premise.

Electric CAR is a subset of Electric VEHICLES; they are not same. One is a part of another.

A. Many electric vehicles that are used for commercial purposes are not needed for extended trips.
Many electric vehicles MAY JUST NOT include the electric cars at all.

Even if we change vehicles to cars.
Many electric CARS that are USED FOR COMMERCIAL PURPOSES are not needed for extended trips.

See this:
A major IMPEDIMENT to wide acceptance of electric vehicles even on the part of PEOPLE WHO USE THEIR CARS almost exclusively FOR COMMUTING is the inability to use their electric vehicles for occasional extended trips.

The premise talks about the people who use CARS for commuting; Statement A talks about the CARS used for commercial purposes. Two things are NOT talking about the same thing. Thus, OUT OF SCOPE.
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~fluke

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can someone explain why no one was tempted to think of option E?
If people use their vehicles for small errands, they would not cover the required no of miles to avail the producer's offer.
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GmatPrep1 [10/09/2012] : 650 (Q42;V38) - need to make lesser silly mistakes.
MGMAT 1 [11/09/2012] : 640 (Q44;V34) - need to improve quant pacing and overcome verbal fatigue.