- 19 Oct
Wall Street Journal Says Fuel Prices Must Be $8-$9 per Gallon To Make Electric Cars Cost Effective For Consumers
A recent article in the Wall Street Journal quotes Xavier Mosquet, Sr. Director and Managing Partner (Detroit) of Boston Consulting Group, as saying fuel prices must be at $8 to $9 per gallon before electric cars will be cost effective for buyers. This takes into consideration the lack of US government incentives that can’t go on forever. Mr. Mosquet goes on to say that a fuel price of $4 per gallon, with current government incentives, will support electric car sales representing only 5% of the market by 2020.
So why the big push for electric vehicles from auto makers?
- US EPA credits that allow manufacturers to build more profitable luxury cars and trucks.
- California mandates that the top six car manufacturers offer a zero emission model in 2012 or pay severe fines.
As Fuel Managers peer over the horizon to see when electric vehicles should be folded into their fuel pricing strategy, a wait and see attitude may be best for the next five years so as not to get distracted from the core business.
The entire WSJ article is worth reading here.