Amid persistent low gasoline prices, electric vehicle demand has fallen short of President Barack Obama’s 2015 sales goal.
Announced in 2008 before gasoline prices collapsed from a 10-year high of more than $4 per gallon, the ambitious plan called for EV and plug-in hybrid sales to reach more than a million units.
Despite gasoline prices staying above $3 per gallon for four years, only 400,000 EVs have been sold in the US since Obama announced the target, according to a Reuters report.
The market failed to reach the figure despite billions of dollars in incentives, aimed at both consumers and automakers, and ever tightening fuel efficiency standards.
EV adoption so far has been limited by a combination of high battery costs and low gasoline prices. The Nissan Leaf carries a mass-market MSRP, but with a range that many potential buyers believe is too short to completely replace their existing gasoline-powered vehicles. At the other end of the spectrum, the entry-level Tesla Model S can travel nearly three times as far as the 24-kWh Leaf but costs more than twice as much.
Some analysts believe current gasoline prices will remain low into the foreseeable future. Oversupply and a change in Saudi Arabia price-manipulation strategy initiated the stumble, while Iran’s fresh return to global oil markets could further extend the slump.
Many automakers are still investing heavily in electrification technologies, and with good reason. Battery prices per kilowatt hour are expected to continue a downward trend in the coming years, eventually making long-range EVs competitive with gasoline-powered vehicles in terms of up-front price and long-term ownership costs. Sub-$2 gasoline prices will undoubtedly delay the meeting point, however the intersection is widely viewed as inevitable.
The Chevrolet Bolt and Tesla Model 3 are expected to usher in the next generation of EVs with sub-$40,000 price tags and at least 200 miles of range. If the Obama Administration gets its way, federal incentives could bump to $10,000 to further offset the premium prices paid for EVs. Automakers are also under pressure to meet ever-tightening fuel-efficiency regulations, even if they are effectively forced to temporarily sell EVs or fuel-cell vehicles at a loss.
Leave a Reply