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Falling Gas Prices Not Affecting Electric Vehicle and Plug-In Hybrid Sales

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Electric vehicle and plug-in hybrid sales, on the rise in spite of falling gasoline prices.
Electric vehicle and plug-in hybrid sales, on the rise in spite of falling gasoline prices.

For the latter half of 2014, gasoline prices have dropped precipitously, some 40% lower than just six months ago, which some feel may suppress the sales of plug-in hybrid and electric vehicles. Interestingly, this hasn’t turned out to be the case.

Last week, I wrote a piece on gasoline prices vs Tesla Motors’ electric vehicles, because Tesla Motors stock seems to mirror the fall in gasoline prices. People who say that electric vehicle sales will suffer, however, don’t realize that electric vehicle buyers aren’t “in it for the money,” at least not as much as hybrid vehicle buyers are, if we take a look at automobile sales in the first eleven months of 2014.

Pure hybrid vehicles, such as the Toyota Prius, actually saw a drop in sales through November 2014, 9% less than the same period in 2013. For those interested in “the bottom line,” including refueling costs, this would seem to fit in nicely with the “lower gasoline prices equals lower economy car sales” theory. On the other hand, plug-in vehicles don’t match up at all. Plug-in hybrid vehicles, such as the Chevy Volt, actually saw a 17% increase in sales, and electric vehicles, such as the Nissan Leaf and Tesla Model S, saw a 30% increase in sales!

The small drop in hybrid vehicle sales seems to make sense, because paying more for hybrid technology for “small gains” in fuel economy, at least for some, does not make sense. On the other hand, lower gasoline prices, even 40% lower, cannot compare in the least to recharging a plug-in hybrid or battery electric vehicle with super-inexpensive electricity.

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2 COMMENTS

  1. Plug-in hybrid and electric vehicle buyers aren’t “in it for the money,”
    But maybe they should be. Electricity at 12 cents per kilowatt hour equates to about 5 cents per mile to drive electric. Gasoline at $2.50 per gallon is TWICE that per mile for a car getting 25 mpg. The average gasoline price in 2014 was 3.437, that’s nearly 14 cents per mile.

  2. Don’t worry; the price of gasoline will rise again as soon as the oil companies short the market supply; those who buy gas guzzlers based on the stability of fuel prices are fooling themselves.

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