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High Oil Prices Could Give Electric Cars a Boost

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Oil Pump

Image: Paul Lowry

Oil is having a bit of a problem, price-wise. Demand is far outstripping supply, and on top of that, there is a U.S. sanction of Iranian exports. All of this is ticking oil prices toward $100 per barrel, the highest price since 2014. At the same time, this is driving up gasoline prices at the pump, with the average across the USA almost breaching $3 per gallon, also for the first time since 2014. This is good news to one group, though: automakers launching new electric and plug-in hybrid vehicles.

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At the Paris Motor Show, Carlos Ghosn, the head of the Renault-Nissan-Mitsubishi Alliance, pointed to this as a boost for electric car sales, saying, “The higher the price of oil the more tailwind we’re going to have behind electric cars.” This tailwind couldn’t come at a more fortuitous time, too. Bloomberg points out that as gas prices are rising, the total number of plug-in hybrid and battery-electric models on sale around the world is set to rise a full 20 percent to 216 different vehicles in the next year.

In addition, although electric cars are still a fraction of total car sales worldwide, their numbers are rising swiftly. In the second quarter this year, Bloomberg reports 411,000 electrics delivered, 77 percent more than the same period last year. Even without a potential boost from high oil prices, researchers predicted another 49 percent increase next year at this point.

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With demand rising and opportunity beckoning, now seems an excellent opportunity for EVs to gain a foothold. The main remaining limiting factor, of course, remains public car chargers and other infrastructure. However, multiple groups are working on this problem around the world, and with luck, far more of the vehicles on the road will run on electron power starting next year.

News Source: Bloomberg