Lux Research: Cheap oil’s impact on EV sales will be temporary

Fisker Karma Plugged In (c) CHARGED

How much the latest plunge in oil prices will affect plug-in sales is anybody’s guess. Consumers have shown themselves to be pretty oblivious to history – when prices go down, the SUVs start flying off the lots. Will EVs be watching sadly from the sidelines?

Lux Research is taking the long view. In “Just a Speed Bump: Despite Cheap Oil, Niche Plug-in Vehicle Sales Will be Resilient,” Lux predicts a moderate sales slump, but expects oil prices to head back up before long. In the most likely case, EV sales will dip by about 20% for a number of years, while PHEV sales will shrink 14%.

Sales won’t see any disastrous drop, says Lux, because the consumer base for EVs and PHEVs remains relatively insensitive to oil price. Most buyers are technophiles and/or greenies, not penny-pinchers.

Lux Research - cheap oil

“To take an example, the Tesla buyer that can afford to pay almost $100,000 for an EV is not swayed too much by the economics of the gas pump. Not all EV buyers are rich, of course, but many buyers of even cheaper EVs like the Nissan LEAF are early adopters driven more by environmental concerns and plug-in vehicle perks rather than gas prices.”

Lux believes today’s low oil prices are partly the result of a war for market share between different oil suppliers, and will eventually creep back up.

Lux Research - cheap oil

Lux expects hybrid sales will be the hardest-hit, with volumes dropping by as much as 33%, as a significant portion of their buyers do look carefully at gas prices and payback period.

 

Source: Lux Research