Ford Worries $3 Gas Will Kill EV Market - Isn't That EXACTLY What OPEC Wants?

Automakers generally would cheer the recent availability of regular unleaded gasoline for less than $3 a gallon in parts of the U.S., unless they are trying to sell electric vehicles and plug-in hybrids as a hedge against stiffening fuel-economy standards.

“With gas prices going down, that’s a problem. People are looking at value,” Jim Buczkowski, Ford’s director-electrical and electronics systems/research and innovation, says at a panel session at the recent SAE 2014 Convergence electronics conference here.

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TheSteve - 10/27/2014 1:40:09 PM

+2 Boost

Oil producing nations don't feel threatened by EVs because they know so few consumers are interested in them. What they didn't like is learning that the U.S. was preparing to start building a new oil production facility that lets them extract oil from previously unfeasible sources.

Such a facility costs a mountain of money, which the domestic oil producers are willing to shell out...proving they get a return on their investment in a reasonable time. With a market price of US$100 per barrel for crude, the investment in building the new facility makes sense. At $80/barrel, which is where OPEC wants to keep prices for the next two years or so, it doesn't make economic sense to build the new facility. OPEC will make less money for a while, but they at least guarantee they'll be making big bucks, rather than allowing a new US facility to be built and then tip that balance in America's favor.

OPEC is just taking a gamble to ensure they keep the market that'll consumes their products. This is true even though the US consumes most of its oil from non-OPEC sources. That's because oil is bought and sold on a free market, like stocks are. There are seller with offering prices, and buyers with bidding prices. When a seller like OPEC drops their prices, buyers go where the best price it, and this forces other sellers to drop their price in order to sell their goods. This causes an overall drop in free-market oil prices.

iamdabest1 - 10/27/2014 9:21:14 PM

+1 Boost

id love nothing more than to see oil companies on their knees .. im not crazy about electric cars, but if the right one came out priced well id definitely get one.
id definitely get a karma if it was pure electric, more reliable and leased well.
looking forward to cars like bmw i8, p1, laferrari , 918 paving the way on how to do it right...