Electric cars were on the fast track to becoming the main vehicle choice for consumers. This was before the world faced COVID-19. Now, with a major influx of oil production added to the lowest demand in fuel history, this might push back the tide and keep the ICE industry on the road for a little while longer.
Future Low Fuel Prices
Prior to COVID-19, Russia and Saudi Arabia were in a race to see who could produce the most oil. The idea was to produce enough oil to lower fuel costs which would allow limits on production to be lifted. The higher the supply, the lower the cost, the increase in demand. Then COVID-19 hit and the demand plummeted so hard that oil is now $0 per barrel. This has left the industry at a stand still. With nobody purchasing oil and large scale production, many big oil companies are having an issue finding space for all of it.
How This Pushes Electric Cars Back
When all is said and done and COVID-19 dissipates, oil companies will be looking to sell their oil as fast as possible. This means that when the gates are lifted, fuel will be the lowest it has been since before the new millennium.
One of the major reason why so many switch to electric cars is fuel economy (or lack thereof). Consumers who purchase EVs typically find that the price of fuel dictates their lives. Without the need for fossil fuels, a consumer is more apt to save money. Well, when fuel prices are so low that they don’t effect living circumstances, then there isn’t much reason to move over to electric. In fact, there might even be an influx in larger and more gas guzzling vehicles.
The Price Of Gas Expected To Stay Low
The current global climate is unprecedented. WIth such a low demand for oil, the price has undoubtedly dropped. On the other side of the world both Russia and Saudi Arabia are still producing large quantities of oil. This will only act to lower the price of fuel for the future.
While many potential EV buyers are looking in the long run, many car buyers are looking for the current most affordable rate. SUVs, especially in the used market, will see a drastic uptick in sales as they are now sold at a much lower price. For those who were looking to purchase a car prior to the events of COVID-19, their sights might be set on something more affordable.