Inside Climate News: “Rising Gas Prices Make the Market Ripe for Electric Vehicles, but US Automakers Can’t Seize the Moment”
RFF Senior Fellow Joshua Linn comments on how consumers react to high gas prices.
“Researchers such as Joshua Linn, an economist at the University of Maryland, have looked at the relationship between fuel prices and the average fuel efficiency of the country’s vehicle fleet. He is also a senior fellow at Resources for the Future, a think tank that studies energy and the environment.
Linn has found that rising gasoline prices contribute to consumers buying vehicles that have lower fuel costs. Much of this research was conducted before electric vehicles were widely available, so consumers were choosing among gasoline vehicles.
But this effect was small, he said in an interview.
‘Consumers would clearly shift toward cars that get better fuel economy, but overall you’d see an average mile-per-gallon increase of about one mile per gallon,’ he said, referring to an example in which gasoline prices have risen by about $1 per gallon.
Now, the potential fuel savings are much larger than before because gas-electric hybrids and all-electric vehicles are available and they have huge fuel savings compared to a typical gasoline model, he said.
But, he explained, that many factors may limit the effect of this price spike on consumer choices. First, a price spike of just a month or two doesn’t have much of an effect on car sales.
‘Many consumers might think that things will calm down, gas prices will go back down,’ Linn said.
It likely will take a prolonged period of high or volatile prices for many consumers to make the leap to considering only hybrids or electric vehicles, he said.
