World Wide Fuel Price Hike and Future of Electric Vehicles

electric vehicle

EV sales have doubled in the past year alone, up sixty percent. The company Tesla predicts sales to grow at this pace through 2020. That’s the same growth rate as the Ford Model T reached in the early 1900s. In parallel, solar panel sales are growing at a similar pace, and LED light bulb sales are increasing 140 percent annually. EVs will become increasingly affordable and convenient as more people are moving towards greener transportation options.

Global car fleet accounts for 19 Mb/d

The global car fleet uses one fifth of the world’s oil supply, or nearly 95 million barrels a day. BP’s Energy Outlook 2035 predicts that the number of electric cars will double in the next two decades, from 1.2 million in 2015 to 70 million by 2035. However, even with the growth in electric cars, the total car fleet will only double, from 900 million today to nearly 2 billion in    2035.

EV sales have grown 60 percent since COVID-19 outbreak

While plug-in hybrid sales have decreased in recent years, EV sales have exploded in the last two years. After a significant tax credit phase-out, the U.S. sold 64,300 plug-in hybrids last year, and projected sales of 231,000 all-electric cars in 2020. However, the impact of the COVID-19 outbreak could be seen in this data.

A recent study showed that COVID-19 triggered heightened environmental awareness among potential non-ICE car buyers, and that 78% of these consumers now intend to buy more sustainable vehicles. This may represent a historic shift in consumer attitudes, which could accelerate the growth of EV sales. As the demand for EVs increases, a significant tax credit will likely follow. Meanwhile, additional government support for EV manufacturing and charging infrastructure could spur sales of more environmentally friendly vehicles.

EVs are less expensive than gasoline versions

An EV can save a typical owner between $800 and $1,000 per year on gas. EVs are less expensive to own than gasoline versions, with the cost of fuel and maintenance typically about half that of gasoline vehicles. In addition, EVs require far less maintenance than gasoline cars, which requires regular fluid changes. The savings can total more than $4,000 per year, and EVs can save drivers up to $4,700 over the life of their vehicle.

The sticker price of an EV may keep some people from making the switch, but many EV models are priced less than their gasoline counterparts in most states. However, the federal tax credit of

$7,500 is contingent on increased EV adoption. For this reason, manufacturers such as GM, Nissan, and Ford have already reached their sales cap and are on track to hit the cap this year. Although EVs will save consumers money, it will still be more expensive to finance an EV than its gasoline counterpart.

Public chargers are needed to support EVs

In order to encourage EV adoption, public chargers are critical. A McKinsey study revealed that drivers’ experiences at public charging stations are often unsatisfactory. Among other issues, drivers complain about cost, availability, and safety. Drivers also struggle to find charging stations, and mobile apps often exclude competitors. Pricing systems are also complex, and customer service isn’t always quick and helpful.

In order to support this technology, several companies offer public chargers for EVs. Plugging in an EV and paying for its charge allows the driver to quickly replenish the battery. Some companies offer membership discounts and instant charging after entering credit card information. Some are free to use and others are subscription-based. In addition, some public chargers are free for EV drivers. While the number of charging stations continues to grow, public chargers will be a critical tool for electric vehicle drivers.

Government policy hampers EV adoption

EV adoption has lagged behind gasoline vehicles by several years. As gasoline prices continue to rise, consumers are put off by the cost of EVs. But even if the cost of fuel is lower than they expect, the fact is that some consumers are not willing to make the switch to EVs. The current situation in the United States is particularly difficult. California is one of the nations’ leading EV markets, but the Trump administration has taken issue with its stricter emission requirements. Meanwhile, power generators and grid operators must prepare for the expected electrification boom, as well as assess the readiness of their systems.

While China and Europe have a head start when it comes to EV adoption, the US and other regions around the world are catching up. EV sales are expected to increase in all regions, as governments push for EVs as a way to curb air pollution and reduce carbon emissions. In addition to government incentives, many automakers in the US are ramping up their production of EVs to meet stricter emissions guidelines.

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