China's Oil Appetite to Charge Electric Car Market
Based on the recent three-year period, which incorporates a boom-bust-boom cycle on crude, Walters observes a 96% correlation between gasoline and crude oil prices.
While electric vehicle demand looks like it's poised to pop by year-end, cuts to federal tax incentives for the vehicles could tap the brakes.
"As we get further along election cycle, cost expenditures at the federal level are being scrutinized a lot," said Center for Automotive Research director Kim Hill. "I think there's resistance to putting money into programs on a lot of fronts."
Meanwhile, Cheng of A.T. Kearney notes that "without some of these tax credits, the cost of plug-in hybrids would be "prohibitively high" -- mainly due to the cost of the large battery pack required in the vehicle to sustain its propulsion. He estimates that gasoline prices would probably need to approach about $8 a gallon or levels similar to those in Europe before buyers, aside from the early adopters and those interested in making a statement on their commitment to environmental sustainability, would buy plug-in hybrid electric vehicles like the Nissan (NSANY) Leaf and hybrids from automakers such as GM (GM) and Ford (F).
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