Earlier today, the price of crude oil on the NYMEX closed below $45 per barrel, about half of its price one year ago. The Wall Street Journal reports that unidentified sources within OPEC predict that the price of oil will remain in the $40 to $50 price range at least through the end of 2015. And Goldman Sachs reports that the price could fall as low as $20 per barrel within the next year.
Shouldn’t this be a disaster for vehicle electrification, which has always been viewed primarily as a hedge against high gasoline prices? Well, apparently not.
A funny thing happened on the way to vehicle electrification: Consumers have decided that there are good reasons to own an electric vehicle besides saving money at the gas pump. Better vehicle performance, more responsible environmental stewardship and even high fashion (thanks Tesla Motors) seem to be at least as significant drivers of electric vehicle sales as saving money on gas.
The Electric Drive Transportation Association released new vehicle sales statistics for BEV sales in August. Although sales are down a bit from August 2014 (5,224 vs 6,483), total calendar year sales through August have been higher in 2015 than 2014, despite a 50% drop in the price of oil.
Adding to the optimism was a new report this week by Navigant Research. Navigant predicts that the global market for Li-ion batteries in light duty and medium/heavy duty vehicles will grow from $7.8 billion in 2015 to $30.6 billion in 2024. Not bad for a world awash in excess petroleum.
The upshot of all these statistics is that vehicle electrification is not as simple an issue as many had once supposed. The push to electrify vehicle drive trains comes in many forms and from many directions. The price of petroleum will certainly impact the pace of vehicle electrification. But it is by no means its only driver.