Electric vehicles (EVs) in the U.S. may be at a turning point, with high gasoline prices prompting would-be car buyers to give them a second look — or a first look, in many cases. EV adoption has been slow to pick up speed in the U.S. for a variety of reasons, including the lack of a nationwide charging network and concerns about “range anxiety.” But a major factor has always been that gasoline-fueled cars have been cheaper to purchase and operate than EVs. The recent run-up in gasoline prices, amplified by Russia’s invasion of Ukraine, has changed the math in those comparisons, at least in the short-term. Is the pace of EV adoption about to accelerate, or will trends in gasoline and electric power prices put the transition into cruise control, or even neutral? In today’s RBN blog, we look at how forecasts for power and gasoline prices might shape the conversations around EVs through 2030.
Over the past few months, we’ve written a lot about EVs and their place in the ongoing energy transition. We’ve looked at the challenges associated with sourcing the minerals and metals needed to make that technology work (see Tell It Like It Is, Part 1 and Part 2), along with the long-term impact on the power grid (see Electric Avenue) that would accompany a large-scale shift away from the internal combustion engine (ICE). And we’ve examined the clash between the energy markets of today and the ongoing energy transition in Monkey Wrench and Sledgehammer.
More recently, in Part 1 of this series, we discussed the sudden burst of attention that EVs have received, a trend highlighted by their presence in this year’s Super Bowl broadcast. From legacy brands such as BMW and General Motors to the EV startup Polestar, several automakers used their spots during February’s game to highlight their latest EV offerings. The momentum didn’t stop there. Americans bought nearly twice as many EVs in the first quarter of 2022 than in the year-ago period, according to Kelley Blue Book, and now account for more than 5% of total new-car sales. The buying trend isn’t limited to the U.S. either. Global EV sales topped 850,000 in March, according to EV-Volumes, up more than 60% from a year earlier. Volkswagen, the world’s second-largest EV manufacturer after Tesla, said earlier this month that it had sold out its EV models in the U.S. and Europe, and orders in those markets would not be delivered until 2023 due to high demand and supply chain issues. And although EV sales have been rising, overall U.S. sales of new vehicles were expected to drop by about 14% in the first quarter.
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