Will plummeting gasoline prices affect Tesla Motors? I doubt it.
Will plummeting gasoline prices affect Tesla Motors? I doubt it.

We have a question for all buyers of Tesla Motors and Toyota Prius high-efficiency vehicles: “Why did you buy your electric vehicle or hybrid electric vehicle?”

There seems to be two schools of thought on this. One might say that people buy these cars because they are better for the environment. Tesla Motors, for example, estimated, back in 2013, that some 3.2 million miles were driven on the Tesla Supercharger network, saving some 450,000 gallons of fuel and 1,200 tons of carbon dioxide emissions. At the same time, Tesla Motors admits that a scant 5% of Tesla Model S drivers use the network, which means that Tesla Motors saves some 24,000 tons of carbon dioxide emissions per year, the result of savings nine million gallons of fuel for other people to burn.

On the other hand, there are some that say people only choose Tesla Motors or Toyota Prius for fuel savings, and that the latest big news is bad news for electric vehicles and hybrid electric vehicles. Right now, the big news in the United States is that oil production is up, gasoline prices are down, and that buying into these green vehicles are only for “Those who stink at math,” according to one priceless article written on Bloomberg BusinessWeek.

Could the same be said for Tesla Motors? Taking a look at Tesla Motors’ stock price and the price of gas, there seems to be an unmistakable correlation. Tesla Motors stock prices have been falling since September, and has just begun to bounce back from a 28% drop, in mid-December. At the same time, crude oil prices have dropped by nearly 50%, since July, gasoline prices mirroring that, falling by nearly 40%.

One might say electric vehicle manufacturers are in trouble, but that’s only taking the second point of view. Tesla Motors isn’t going to be affected in the least by the price of gas, because Tesla Motors sells electric vehicles for at least three reasons. Of course, emissions and fuel savings are an important part of the appeal of electric vehicles, but that’s not what Tesla Model S drivers rave about. According to Consumer Reports, drivers of the Tesla Model S give it high marks in “drivability, styling, fuel economy, maintenance and repair costs, and cargo space.” Also, Tesla Motors itself touts the Tesla Model S as a performance car. Whether gasoline prices affect the sales of  the upcoming Tesla Model 3, a more “affordable” Tesla Motors electric vehicle, remains to be seen.

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1 COMMENT

  1. Oil, and thereby gasoline prices are contrived. The purchase of Diesel, Hybrids, and EVs will drop in accordance with the drop in gasoline prices. Sure, we all enjoy lower prices-at-the-pump (when it’s happening), but we should all by now, be able to ‘read between the lines’. If J.D. was a billionaire when gasoline was 16.9 p/gal, what makes anyone think that this worldwide consortium would voluntarily relinquish it’s grip on the world’s economy? I believe that the oil drilling, refinery and distribution technology should be Federalized and, in turn giving/returning the “Authority” to the industry to guide that industry into more alternative fuels for ‘alternative’ non-internal combustion engines and ensuing technologies. If John David or Fred were alive today, they would understand that they have enough money, and would turn there efforts toward the new frontier – population explosion, increased domestic transportation needs, and realistic limits of oil production.

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