Among the reasons for the ambitious growth of EV adoption was that gas prices would be in the $4 to $5 level. This is because oil prices would fluctuate between $80 and $100. The cause of this, in turn, would be a growing scarcity of crude. Part of this model has not fallen into place. Crude is abundant.
The average price for a gallon of regular gas nationwide is at its lowest since 2021. National gas price research firm GasBuddy shows that the figure is $3.03 today. That is a drop of $.36 from a year ago. Patrick De Haan, head of petroleum analysis at GasBuddy, commented, “We continue to see gasoline prices bouncing off lows, only to re-test them again and again. While prices jumped in some places, it’s being offset by drops elsewhere, and that has kept alive the possibility of briefly seeing the national average fall to the lowest level since 2021.”
Oil prices have been below $80 for most of the last year. They broke above $90 in September. By October, prices had fallen well below that peak. Several experts believe prices will fall further this year.
Does the Suez Crisis Increase Gas Prices?
The Suez Canal crisis, caused by Houthi militant attacks on ships in the Red Sea on their way to the canal, should have caused oil prices to go higher. About 10% of the world’s crude oil exports go through the canal. Traders are betting that the presence of the US military will keep the routes to the Suez Canal open. Additionally, the IEA expects oil supply to rise this year. According to Reuters, “With conflict in the Middle East raising concern over supply, the IEA said that – barring significant disruptions to flows – the market looked reasonably well supplied in 2024 and a surplus could emerge if OPEC and its allies unwind output cuts as scheduled in the second quarter.”
Yale Climate Collections has analyzed the price to charge a car in all 50 states compared to the price per gallon of gas. The figure comes to an average of about $1.50 for EVs. That means it is half the price of gas. This does not include the price to buy the home charger. It also does not include a “calculation” for the convenience of gas stations compared to charging stations for those driving long distances or the advantage of gas cars based on range.
EVs have about a third of the greenhouse gas emissions that fossil-fueled powered cars do. This does not include the cost to build, use, or dispose of an EV battery, but car owners likely do not consider these. MPG is the focus for drivers. And that is where the consumer decision sometimes starts and ends. The EV decision is easy when the gas price is at $5. That may be the case at $4 for many people as well. However, some consumers will pause at $3. This is particularly true for someone who has to install a charger with an upfront cost of several hundred dollars to pay the equivalent of $1.50 a gallon. EVs are not a clear favorite financially then.