As oil prices have fallen globally, the automotive market has shifted to favoring large gas guzzlers once again, but what effect has that had on the automotive industry?
When gas was priced closer to 4 dollars a gallon, everyone was concerned about fuel efficiency. Now, when you look to buy a new car, we are seeing vehicles manufactured with fuel economies in the teens, and consumers really couldn’t care less (like the Chevrolet Camaro with a combined EPA estimated fuel economy of 14 MPG).
Cost once drove the push to EVs and alternative fuels, but now, the major driving factor against gas guzzlers has been an environmental one. While globally the concern for global warming has grown, here at home in America, a large part of consumers couldn’t be bothered. This has once again created a large market favored by every lover of power and muscle. Grr.
According to a report from the New York Times, 75 percent of people who have traded in a hybrid in 2016 have replaced it with an all gas car. That’s an alarming statistic when you consider the potential environmental effects. Despite the cultural success of Tesla and its competitors, there are only shy of a half-million EVs and hybrids currently on American roads. In the bigger picture of the American automotive industry with 253 million total cars on the road, that’s nothing.
It has become hard to separate climate change from any discussion about the automotive industry. Despite your viewpoint on the issue, globally, the push away from fossil fuels is a big one and one that nearly everyone can get behind for reasons other than the environment, like sustainability. With gas prices having fallen this year to below $2 for most of the country, consumers can usually fill up their tank for well short of 50 dollars. This is half of what it was costing consumers in the summer of 2008.
The impact of this shift back to gas guzzlers has given manufacturers some freedoms that no one could have expected just a few years ago. Automotive manufacturers, while still devoting a large portion of profits to alternative fuels, are creating entire lines of internal combustion engined cars. Some would argue that this shift away from demanding improvement in fuel economy and large-scale alternative fuels has driven the price of the modern automobile down. There are many more factors at play when it comes to the pricing of vehicles, but given that most manufacturers have a car that starts in the 12 to 13K MSRP range, buying a new car can sometimes be cheaper than buying used, all things considered.
So, am I arguing that this shift away from high-efficiency fuel systems has made cars cheaper, well, maybe, but the trend towards gas guzzlers may be doing more harm than good. Gas prices will inevitably rise again, alternatives fuels will soon take over the automotive market, but the current state may be driving a sense of stagnation in alternative fuels research. From a corporate perspective, why would a manufacturer devote money to groundbreaking alternative fuel research when consumers aren’t demanding efficient cars? It’s simple business. Cheap gas is great for the consumer, but long term, it may not be favorable to the automotive industry as a whole. For now, gas guzzlers are here to stay. The future of automobiles, however, may be something a little more electric, and quiet.