As crude oil prices continue to fall amidst a global oil glut and increased U.S. oil production, everyday consumers continue to experience a myriad of benefits with the biggest being substantial at-the-pump savings. Traditionally, the prices of gasoline during the summer rise for a couple of reasons: people usually drive more during the hotter months, and various regulatory requirements mean that U.S. refineries and facilities are required to switch to different blends of gasoline. Thus, as demand begins to outstrip supply during the summer months and energy firms make their seasonal switches, the price of gas usually rises.
However, consumers have been pleasantly surprised at how little, if at all, gas prices have moved this summer, staying in-line with prices from the one previous. With new extraction techniques coming into the fold and the U.S likely to top its 1970 record of barrels produced per day next year, how are the counterparts of petroleum-based vehicles been faring?
Firms like Volvo have publicly pledged to stop manufacturing their gas-powered vehicles by 2019, reiterating a one-million combined hybrid and electric sales goal by 2025. Even the government of France has promised to completely ban the sale of gas-powered vehicles within its borders by 2040, an unprecedented step taken alongside countries like Norway and India.
While many large players like Tesla are making a substantial splash in the electric car market, there are numerous practical concerns that have arisen as electric vehicles (EV’s) have become more and more popularized in the U.S. According to a Wall Street Journal article written by Spencer Jakab, new EVs like the Chevrolet Bolt cost around $30,000 after the $7,500 federal subsidy, which is still quite a bit higher what a comparable, gas-powered vehicle from the same manufacturer costs. These prices represent an important reality that the EV industry has to face sooner rather than later if it wants to remain competitive: a lack of infrastructure and efficient ways to produce the technology.
It is well-known that the number of charging stations in the U.S is severely limited, so much so that a cross-country drive in a fully electric, non-Tesla vehicle is often impractical or considerably more time-consuming. However, infrastructure development has been pushed by utility companies as well as big players such as General Electric (GE), so the growth of EV infrastructure could increase dramatically as more players, both private and public, hop on board.
While EVs produce zero outright emissions on their own, the emissions given by the creation of their batteries is equivalent to approximately 8.2 years of driving a gasoline or diesel powered vehicle. Other environmentally damaging procedures and processes may be undergone to create an EV and, while the end-cost may still be less, the up-front environmental costs of producing these vehicles are substantial.
Despite these potential difficulties, Tesla and other EVs continue to show promise. Currently, a variety of both state and federal subsidies and programs exist to encourage the use of electric vehicles, but the number of state initiatives has fallen, with EV-specific fees and requirements instituted in their place.
Even as firms jump onboard and begin to ramp up their production of electric vehicles, these tax expenditures have been instrumental in encouraging the purchase of EVs. It’s hard to say how the U.S EV market will develop if oil continues to decrease in price, subsidies are slowly slashed, and no significant developments in infrastructure and manufacturing are made. At the end of the day, the consumer still can decide what is best for them.
“Electric Cars Need More Than Fans” (Spencer Jakab, The Wall Street Journal)
“Volvo Plans to Go Electric, to Abandon Conventional Car Engine by 2019” (William Boston, The Wall Street Journal)
“Tesla’s Electric Cars Aren’t as Green as You Might Think” (Lizzie Wade, Wired.com)
“Behind the Quiet State-by-State Fight Over Electric Vehicles” (Hiroko Tabuchi, The New York Times)