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U.S. Gas Prices Falling; Does It Matter For Green Cars?

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2012 Toyota Prius Plug-In Hybrid, Catskill Mountains, NY, Oct 2012

2012 Toyota Prius Plug-In Hybrid, Catskill Mountains, NY, Oct 2012

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Gasoline prices rise. Gasoline prices fall.

And every time there's significant movement, it's a news story.

Last week, for instance, CNBC (via The Car Connection) reported that a gallon of regular unleaded gasoline dropped to about $3.59 last Friday.

That's almost 8 cents lower than the cost two weeks previously.

Headline fodder

Cue headlines talking about "cheaper Labor day driving," and "relief for drivers," and so forth.

Those news stories also tend to play into stories about sales of so-called green cars, those with good fuel-efficiency ratings: hybrids, diesels, plug-in hybrids, and electric cars.

Often, sloppy journalists will take the step of assuming that a minor rise or fall in gas prices will affect the sales of green cars.

You see it in language like, "...potentially hurting future sales of fuel-efficient cars, especially electric cars--which aren't selling well anyhow."

That's our approximation, not a direct quote--but if you're reading this site, we bet you've seen that kind of language over the past couple of years.

Right?

Many motivations

The thing is, saving money on fuel is just one of several different motivations for buying certain types of green cars.

Electric cars, for one, are bought for many different reasons--including desire for the latest, coolest gadget; environmental concerns; and a desire to do something about U.S. energy security.

Cost saving is in there as well, granted, but it's far from the only reason--just as equally lazy journalists (and auto marketers, ahem) often assume that these electric cars are bought only by those with a green agenda.

'Diesel fuel only' caution on Audi Q7 TDI

'Diesel fuel only' caution on Audi Q7 TDI

Enlarge Photo

And the same applies to other fuel-efficient cars as well.

Audi is doubling down on diesels to help it comply with increasingly strict corporate average fuel economy (CAFE) standards through 2025.

Diesel drivers talk torque

But talk to diesel drivers, and they'll tell you that while the fuel efficiency is great, there's also the torque and driving feel of a diesel--which is qualtitatively different from that of a gasoline car, let alone an electric car.

The moral: People buy cars for all sorts of reasons, and the sales of green cars--especially electric cars--aren't solely determined by gasoline cost.

For the mass market, sure: Savings on purchase cost and running costs matter, as surveys show.

But in these early days for both diesels and electrics, there are other factors at play.

In other words, beware sloppy journalism.

This has been your mildly irascible rant for the day. Thank you for listening.

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Comments (13)
  1. This minor trend in gas prices is irrelevant. I averaged my gas savings at 4 dollars a gallon to account for the higher prices in the future. Where I live it was steady near 4 dollars a gallon last year for a while. Even if it stays at 3.70 a gallon, the average person saves 161 dollars in gas a month before paying the extra ~25 dollars worth of electricity in an electric car. Gas prices have no where to go but up as we see demand exceeding supply in the world, thanks to China, India, and peak oil. We have already exploited all the cheap oil reserves, now all we have left are the expensive oil sands, small fields that are not cost effective, the deep, deep ocean oil reserves, and the arctic. Prices have to go up, no other way to sustain it.
     
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  2. The average driver might use 15 gallons a week. If the price of gasoline dropped from $4 to $3.60, that savings of $.40 would be $6 a week. Multiply this by 52 weeks in a year and you get a savings of $312.

    This hardly makes a dent in most personal budgets. Gas prices aren't going to drop by half. But they certainly will increase in the next year.
     
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  3. Randy as a former carsalesman, i have first hand experiences that say that minor changes in prices are not irrelevant.

    Example; prices jump 50 cents and stay that way a while. people grumble at first but then accept it as a "no way out" fact of life (little do they know!) then prices drop 30 cents a gallon and all of a sudden they get the feeling they now have "extra cash" which prompts them to go out and get that 4x$ pickup they have been eyeing but balked at because it got 50% less mileage per gallon of now "cheap" gas.

    if you had told me that this happened on a regular basis, I would have never believed it but seeing is believing and during my brief stint selling cars, I heard this near exact story DOZENS of times...
     
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  4. Although I do see diesel prices falling for awhile. As the two largest diesel consumers look at switching to Natural Gas, the prices will fall. I can't imagine the Navy switching too fast, but they are considering it. The railroad companies are already investing in LNG trains because they run at less than half the cost. Trains and semi trucks will switch to LNG because they often run nearly 24/7, and that warrants keeping a fuel at -200º, thanks to the fuel savings. I think this will push diesel vehicle sales in the US much higher, until there are more diesel cars on the road.

    Coast Guard should consider LNG:
    http://tinyurl.com/kabyv7o

    BNSF LNG trains, from Green Car Reports:
    http://tinyurl.com/k7kovcm
     
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  5. Talk about changing headlines. This morning's paper screams about a probable 20 cent per gallon increase next year due to new Fed fuel requirements. Well, we EV/Plug-in owners just ain't worried. I sold my last ever pure ICE car last week. Good riddance. And you're right about buying motives. Didn't buy my Volt to save gas, but it's a nice fringe benefit.
     
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  6. Diesel torque? Try electric!
     
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  7. Petroleum fuel prices vary widely for many reasons; while "green fuels" have held more stable prices between seasons.

    A look at the 5 cities where greater than 50% of PEVs sold will tell us that gas prices are not so average.
    http://www.greencarreports.com/news/1086200_half-of-all-electric-cars-are-sold-in-5-cities-can-you-name-them

    Yep, depends where you are and what your motivations for driving are… picking the right wheel for the right drive(r).
     
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  8. Clearly the fossil fuel industry will try to keep prices as low as they can to try to stifle the drift towards alternative energy and electric cars. But demand from Asia, and the need of oil producing countries for revenues will put a floor on on how low those oil prices can go.
     
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  9. the garbage efficiency of internal combustion engines is what made me switch. After 100 years of R&D and tons of competition, they still cant get better than 20% tank to wheel.

    ICE's remind me of using incandescent bulbs, just simply garbage for what they are. Makes everything BUT what you need it to do

    you need kinetic energy or forward motion frmo gas, but instead you get a bunch of toxic crap, heat, light, sound, just useless stuff. but since it puts out so much useless stuff, you need to waste MORE of your kinetic energy to reduce the waste, you need a muffler to reduce the amount of noise, you need a catalytic converter because the engine sucks and cant keep stoich, cats suck so bad you need TWO of them robbing even more power.
     
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  10. I think hybrid sales varies more with fuel price than plugin sales.

    Of course, people will always make an analysis on cost.

    I think some of more frequently asked questions on EV owners are:

    1. How far can you go?
    2. How much does the car cost?
    3. How much does the battery cost?
    4. How often do you have replace the battery?
    5. How much has your electricity bill gone up since you bought the car?

    I don't think any of them ask about the gas saved. Those 5 questions are usually what keep the potential buyers away. I have to answer them all the time.
     
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  11. I bought my gas powered Suzuki Swift 6 months ago, and as much as I like it, I know for a fact it's the last petroleum fuel powered vehicle I'll ever buy.
    If Slovakia had electric car prices (and wages) like those in the USA I'd own an electric vehicle already but, alas, I must wait for prices to fall further.
    It's a bone of contention among motorists here. I've seen many voicing their enthusiasm for EVs, but the price remains a barrier so they're stuck paying for gas.
    To give you an idea of the situation, the cheapest gas here now costs $7.63 USD a gallon, and the average wage is $1127 USD per month.
    There's no easy solution for those problems, so wait we must.
     
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  12. The price of gasoline/diesel yo yo up and down but the overall trend is UP. We got our Leaf as a result of concerns for the environment and not to save money. As Xi says the biggest question I get is How much did your electric bill go up after switching to an EV. Seems most people are worried about money.
     
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  13. As most of us know, Oil companies play the media like a fiddle and we tune in to hear the concert. The price of gas in North America is a subsidized boondoggle. In reality there should be one world price for this shrinking commodity but each nation has its own agenda and plays with their markets as they see fit ( usually to the detriment of weaker countries ). The bottom line on all this manipulation is, minor fluctuations aside, the price for a gallon of gas will be more expensive for our children and any prevarication from this inescapable truth only makes the needed paradigm shift harder to instigate. The oil tanker load of horse manure allows big oil to continue to call the tune to which we all dance.
     
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