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Low Gas Prices Tank Market for Electric Vehicles

Electric vehicle sales dropped in 2015 amid a boom in SUV and truck sales spurred by rock bottom oil prices.

American consumers bought a mere 102,600 EVs in 2015, a 17 percent decrease from the previous year. The numbers are particularly bad for companies that entered the EV market early — Nissan’s all-electric Leaf and Chevrolet’s Volt, for instance, sold 43 percent and 18 percent fewer vehicles, respectively, according to researcher Autodata.

The drop in oil prices, industry insiders believe, prompted the bottoming out of electric car sales. The average of gas prices in 2015 was $2.40, a drop from $3.34 at a similar time in 2014.

Daily Caller News FoundationLow gas prices have urged customers to move steadily toward SUVs and trucks. Light duty trucks and mid-sized SUVs saw a 19 percent increase in sales in 2015, with SUVs in general seeing a 13 percent increase in sales.

Even with federal subsidies to help customers offset the cost of the Leafs and Volts, among others, the bloated prices of EVs and the spiraling oil costs have pushed customers toward ground-pounding trucks.

“Why should I go electric and pay more when gas is so cheap?” Ludwig Willisch, chief executive officer of BMW of North America, told reporters. “There needs to be a clear advantage to driving electric: HOV lanes, parking, charging.”

Tesla Motors, another competitor in the EV market, has seen its stocks tumble following the unveiling poor sales of its first SUV, the Model X.

Tesla’s stock tumbled last week, after shares of Musk’s EV venture dropped by 8 percent. Tesla reported a total delivery of 50,580 vehicles over the past year. That number was revised down from 55,000 after last year. Overall, the company’s stocks closed last year above $240, but spiraled on the first day of trading in 2016, falling to $223.

EV advocates suggest that the drop prices is due, in part, to the introduction of new model vehicles entered into the market.

“The Leaf and Volt were both hurt by the new versions coming out,” Tom Saxton, chief science officer for the advocacy group Plug In America, told reporters. “The Leaf has just in the last month started seeing deliveries of the new model and GM is still limiting sales of the Volt to a handful of states.”

At an automotive conference last August, Forest McConnell, the president of a Honda dealership in Alabama, used a donut and broccoli example to illustrate the situation fro EV models. Donuts are fossil fuel-burning cars and electric vehicles are broccoli – in short, it’s easier to consume unhealthy foods than it is to eat healthy foods.

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Photo by mariordo59

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