February 4, 2023

Automotive Breath

Spearheading Speed Excellence

Fuel Prices Up – Will We See a Resurgence of Hybrids and All Electric Cars?

Whenever oil prices get up to $100 a gallon, the price of gasoline in United States becomes a real challenge for small businesses and consumers. Meanwhile the price of jet fuel and diesel fuel take its toll on other industries, and it acts as an overall tax on society causing artificial inflation, and couple this right now with the drought in the Midwest and increased food prices, and you have some of all the components you need to slip back into recession. Okay so let’s talk shall we?

It also seems that whenever we have high prices for gasoline there is a resurgence of interest in fuel economy cars as well as highbred and all electric vehicles. In fact, Ford has announced that it will come out with five new models of hybrids, and a couple of all electric cars, in fact it is investing $135 million, hiring over 1000 new clean tech energy engineers and adding factories. That’s a good thing, but it hardly needed the new CAFÉ standards to make this come about. The high oil barrel prices are what are causing this change of venue and strategy.

Honda is also building a new plant in the US and they will be making one new model of hybrid car here, as both Ford and Honda chase down the highbred leader; Toyota. So it appears that hybrids are back in style once again, and even though the Chevy Volt had failed, all of a sudden everyone’s looking for cheap transportation once again.

It doesn’t appear that the price of oil is going to come down anytime soon, there are all sorts of challenges and conflicts right now in the Middle East. And although countries like Syria only produce 1% of the world’s oil, that’s still 1%, and it does matter. Just like it matters what is going on in Sudan, and other smaller oil-producing nations.

Of course, the big question mark comes from Iran with regards to the Straits of Hormuz, and a potential war over the production and proliferation of nuclear weapons from that Islamic Republic. Interestingly enough, we could have written that same paragraph in any of the last 5-decades, by merely changing the names of the countries couldn’t we? Ever read Henry Kissinger’s 1960s essays – history repeats, that is obvious.

Meanwhile we are on the cusp of new battery technology which could change the game altogether, meaning there will be more electric cars with greater range, and at a lower cost. We have plenty of natural gas to fire up the electrical power plants, and it is possible to take a bite out of the cost of gasoline for the American consumer and a small business person. Obviously our economy needs some relief, and all of this can’t happen soon enough from the consumer’s perspective. Therefore they will be out in force buying hybrid and all electric vehicles. Please consider all this and think on it.