Global Gas Prices Soar; Will EV Adoption Follow Suit?
It's hard to overestimate the impact that rising global gas prices will have on the world's economy. The Russian invasion of Ukraine, rising levels of inflation, and the still-lingering impact on global supply chains from the effects of COVID are all major contributors to the astronomical increase in gas prices over the past couple of months.
To put things in perspective, US gas prices hit a record high on March 14 2022, reaching $4.32 a gallon as compared to the previous high of $4.11 in July of the Great Recession of '08. While gas prices have come down marginally (currently sitting around $4.22), they are still astronomically high as compared to previous quarters and years. It's clear that our economy, and specifically our gas prices, are subject to international and political current events, and will continue to fluctuate as long as major players on the global scale are able to influence world affairs. So does this major increase in gas prices, and the affect everyday consumers are feeling in their pockets, motivate a transition to more sustainable and cost-effective sources of energy?
On the one hand, the EV industry isn't insulated from these global affairs either. EV car prices have also increased steadily given the current events; in fact we've seen consistent growth for Tesla Model 3 sales prices. The average price index from Car Gurus shows the Tesla Model 3 average price has grown 20% YOY. The most notable point here is that most of this growth has come from seriously older Model 3's (think 2018..), which proves that used models are in demand and newer models may be harder to come by.
On the other, it's clear that the affect at the pump is changing people's minds in terms of deciding between EV's and Fossil Fuels. In a recent poll from Consumer Reports, roughly 71% of drivers stated they were interested in purchasing an EV (up significantly over the past few years). And there's historical precedent here too. There's been a strong correlation with historically high gas prices and higher EV/hybrid sales. It seems that consumers are more willing to lean into the EV and sustainable technology when it's proven to increase their take home pay. And I don't see that trend changing anytime soon.