Appeal and sales for alternative energy cars are still slowing as gasoline prices drop. But that isn’t putting the brakes on the auto industry’s expansion in the EV market.
A new survey says that with every 10-cent decrease in gasoline prices, consumer interest for alternative energy vehicles also falls by 1-percent. The study was commissioned by the National Association of Convenience Stores (NACS), an organization with members that are heavily reliant on retail fuel sales.
In April 2014, a little more than half of car buyers were considering an EV, according to NACS. By November, after gasoline prices dropped by 90 cents per gallon, EV consumer interest had slumped to 34-percent.
This will translate to 1,000 fewer EVs sold this year, projects Kevin Riddell, a manager for LCM Automotive. As part of his powertrain forecast, he expects a total of 60,000 EV sales in 2015.
Despite this downturn in consumer sales and interest, the auto industry continues to invest in alternative energy technology and releases new hybrid and EV models.
GM, for example, is redesigning its plug-in hybrid Chevrolet Volt for 2016. It will also expand its alternative energy platform with a new EV in 2017, which may arrive as a modification of the Chevrolet Sonic).
SEE ALSO: 2016 Chevy Volt Revealed at CES 2015
Nissan is developing a new battery for its all-electric Leaf, hoping to extend the car’s range beyond the current limit of about 84 miles.
Tesla and Volkswagen are also expanding their EV battery interests, but in two different directions. Volkswagen recently purchased stake in QuantumScape Corp., a lithium-ion manufacturers that is working on solid-state batteries. Tesla will keep manufacture batteries in house, on the other hand. It plans on building up to 500,000 batteries a year in-house using its future Gigafactory.
Though fluctuating gasoline prices are affecting consumers, one main factor shields the auto industry from a similar ebb and flow – regulations.
“There is one thing which is not going to change: The emission problem is getting more and more serious,” said Carlos Ghosn, CEO of Nissan Motor Corp. “The restrictions coming from regulation are going to get tougher. There is no way you’re going to meet these emissions restrictions and regulations without zero emissions.”
Analysts say that the auto industry must step up its marketing and sales for EV right away in order for to meet the stricter rules on fuel economy and emissions set to begin in 2025.