Reporting and reading about oil and gas prices can wear on your mental rotors.
One day we’re writing about falling gas prices, another about rising them, another about price relief via a gas tax holiday, and before you know it, we’re talking about price drop.
Every once in a while, it’s worth taking a step back and asking more important questions.
Soaring prices and collapsing supplies are nothing new. Since at least the 1970s, there has been a consistent correlation between the size of vehicles sold and the price of gasoline. When prices are low, people buy big and vice versa.
And yet, we keep making the same mistakes. Truck sales and large SUV sales surged from 2015 as prices began to fall. Today, those buyers face triple-digit fill prices at the pump.
We understand that Americans love their big SUVs and trucks, as do automakers, who put more than 270 new and refreshed models on the road each year.
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Long live the choices and options available to consumers, we say.
But our thinking about the engines of the cars we love needs to change.
Oil, of course, is a global commodity. Even if we could produce all the oil we need to become a net oil exporter, pump prices would still be affected by world markets. So the idea that we will ever be able to make our way to full independence is a fashionable but false hope.
However, we can significantly reduce our dependence on volatile oil prices.
Yes, we are talking about all-electric (EV) cars, as well as hybrid cars. They made up less than 10% of U.S. auto sales in 2021, but that’s nearly double the sales of the previous year.
This growth is not solely the result of US government policies. Automakers have been major players in this shift, and have been since at least 2015. The world’s two largest automakers, Volkswagen and Toyota, have set goals to end the sale of non-electric cars. Audi, GM, Mini, Lexus and Volvo have also pledged to go electric by 2033. And Ford is shifting its sales in Europe to electric.
This change will not be quick and internal combustion cars will be with us for many years to come, but automakers are investing billions to make this change happen. They don’t do it because they are “awakened”. They do it because that’s where the industry is heading.
Why are they, and we, so confident in electric and hybrid vehicles?
First: the adoption of electric and hybrid vehicles is the surest way to combat climate change. Changes in federal climate policies are slow to come, and too many state leaders like Governor Glenn Youngkin continue to resist environmentally friendly policies. For example, he picked up Andrew Wheeler, a known climate change denier and longtime coal industry lobbyist. Internationally, however, other major car-buying countries are on board.
Because the automobile market, like the oil market, is global, American automakers must adapt to face this reality.
Second: There is a growing shift in the way young consumers think about cars. Young people just aren’t as interested in driving as their parents and grandparents were when they were young.
In 1983, 46% of 16-year-olds had a driver’s license. By 2018, that figure had fallen to just over 25%.
The reason is simple. Younger people are discovering that using their phone to hail Uber is much cheaper than owning a car.
Considering that 80% of Americans live in urban areas, and the cost of owning, insuring, and parking a car is simply out of reach for many city dwellers, young people’s declining interest in driving is logic.
These young adults also tend to be more environmentally conscious and want to support companies that offer clean rides. That’s why Uber is investing millions to help its drivers switch to electric vehicles.
New ride-sharing companies like Revel and Alto are buying their own electric fleets from automakers, which they are eager to supply.
Third: Have you driven an electric vehicle? If not, try it. It is an absolute gas.
Better for the environment, cheaper and more fun to drive? It’s a win-win-win.