Even Long-Term Gas Shock Won't Do Much For EV Sales, Given High-End Model Glut, No Federal Incentives [View all]

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Unless high prices due to the Iran war persist for a while—let’s say six months or more—with a U.S. average price that stays above $4 and maybe even touches $5, I expect the effect on EV sales will be small. I’m speaking from experience, including covering the 2008 price spike that led to increased demand for the most fuel-efficient cars. And it went away soon enough, with consumer preferences shifting back to trucks and SUVs.

This isn’t just anecdotal evidence. Researchers such as Joshua Linn, an economist at the University of Maryland, have looked at the relationship between fuel prices and the average fuel efficiency of the country’s vehicle fleet. He is also a senior fellow at Resources for the Future, a think tank that studies energy and the environment. Linn has found that rising gasoline prices contribute to consumers buying vehicles that have lower fuel costs. Much of this research was conducted before EVs were widely available, so consumers were choosing among gasoline vehicles.

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One discouraging sign for the near-term market is that automakers continue canceling EV models, leaving fewer options, especially at the low end of the price scale. I wrote last month about Honda deciding to stop plans for three U.S.-made EVs that were going to be statements about the company’s future design and technology. General Motors has said its newly revamped Chevrolet Bolt EV will be produced for about 18 months, going on sale this year and then ending production next year. Volkswagen said this week that it will stop selling the ID.4 in the United States, taking away the model that had been the company’s main EV in this market.

Ford CEO Jim Farley made this point clear when he appeared on Fox News this week to tout the F-150 pickup’s continuing status as the bestselling vehicle in the United States. The interview took a turn when the host asked about competition from Chinese EVs. China is shut out of the U.S. market by tariffs and Farley said it’s important to keep it that way. He said China’s vehicle production capacity is large enough that its exports could wreck the U.S. manufacturing economy. “Manufacturing is the heart and soul of our country and for us to lose that to those exports would be devastating for our country,” he said. He also acknowledged that “Ford has to do our part to make our vehicles fully competitive with the Chinese” and he expressed confidence that upcoming Ford EVs will do that.

Ed. - Sure, Jim. Sure.

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https://insideclimatenews.org/news/16042026/inside-clean-energy-gas-prices-evs/