Low gasoline prices create challenges for many strategies – whether it’s advanced biofuels, lower carbon oil produced using CO2 enhanced oil recovery, biobased chemicals, or electric vehicles.
But electric vehicles appear to be a bright spot. Sales in Minnesota of battery electric vehicles actually increased by about 16% relative to 2014 according to EPRI data. National sales also increased – by about 13%. Although total sales volumes of conventional vehicles were far higher, they actually declined slightly in 2015. Battery electric vehicles are a bright spot in the electric vehicle market, as plug-in hybrid and hybrid electric vehicle sales both declined.
Increasing sales of battery electric vehicles in 2015 is impressive for a couple of reasons. First, gas prices have been mentioned. Average national gasoline prices first dropped below $3/gallon in October of 2014. They have been low throughout 2015, but began a steeper decline in August of 2015. Despite 3rd and 4th quarter 2015 gas price declines, sales of battery electric cars were actually stronger in those quarters than in the first half of the year. Another challenge for battery electric vehicle sales in 2015 is expectation that better vehicle models will be available in 2017. The Tesla 3, Chevy Bolt, and an improved Nissan Leaf all promise to offer 200+ mile range at a price range in the $30,000 to $40,000 range. Finally, Minnesota doesn’t have policies like the Zero Emission Vehicle requirement or an EV rebate program to encourage sales.
All of this gives reason for optimism. With EV battery packs dropping in price by 14% per year annually, improved vehicle models on the way, and long-term projections for gas price increases (they can’t really get much lower!), and increasing annual sales in a challenging year, the future looks bright!
GPI facilitates Drive Electric Minnesota, a partnership of local and state government, utilities, private business and nonprofit entities working in collaboration to bring electric vehicles and plug-in charging infrastructure to the state.