How Gas Prices are Driving Electric Vehicle Sales
Last week, TIME, CBS News, and various others published articles around how gas prices are pushing consumers to purchase electric vehicles. This spike in interest in a more sustainable vehicle, while exciting for Sustainability and ESG leaders, does come with worries around supply chain and shortages. What does this mean for Sustainability and what does this mean consumers looking for an electric vehicle going forward?
In an unreleased report from CarGurus it shows that 53% of consumers who are actively shopping for a new vehicle are considering a more fuel efficient vehicle in response to high gas prices. A new CBS News poll echoes these sentiments, and found that 59% of Americans would or might consider buying an electric vehicle, again, largely in part due to the high gas prices we’ve seen across the United States.
The roadblock many folks are encountering is that there are significant supply chain issues creating shortages, particularly around lithium-ion batteries and semiconductors which are crucial to electric vehicles. This is amplified by the war in Ukraine further disrupting the already delayed and fragile supply chain. This looming and battery shortage has actually caused automakers to pause the release and/or production of many electric models. Even Tesla, the current electric vehicle market leader, has waiting lists of several months.
According to TIME, the issue isn’t just the supply chain and shortages, but with the spike in interest the demand for these electric vehicles is rapidly outpacing production. While interest in electric vehicles has been organically growing, the raise in gas prices in certainly a push for people to re-evaluate, as the
But although carmakers are raising their prices, consumers still appear to want electric vehicles. “Two-thirds of people say that they agree EVs are the way of the future,” Chapman says. “They seem somewhat inevitable.” Experts say it will take time, as less than 1% of the 250 million cars on the road today are electric, but high gas prices could be one way to encourage switching. - TIME
An interesting take on this from Kevin Robers, the director of industry insights and analytics from CarGurus is comparing this situation to the 2008 financial crisis. Roberts made the connection that as gas prices spiked back in 2008, “drastically shifted their driving habits and the kinds of vehicles they wanted, particularly as more electric vehicles were being introduced.”
"People are begging for a better, less fuel intensive way to drive to be divorced of fuel pump prices, and yet finding any new car — let alone a model that's electric — is so hard right now," Brian Cooley, editor at large for CNET, told CBS News.” - CBS News
In summary, it seems that consumers are directly responding to high gas prices, but getting in a new electric vehicle could be over a year away for many.
Sources:
https://www.cbsnews.com/news/gas-prices-electric-cars-batteries/
