Carlypso: Data Shows Low Gas Prices Don’t Impact Plug-In Electric Car Sales

3 years ago by Eric Loveday 28

Someday Soon Gas Prices Will Jump Back Up To $4-Plus Per Gallon

Someday Soon Gas Prices Will Jump Back Up To $4-Plus Per Gallon

But For Now Prices Are Low

But For Now Prices Are Low

Like a record that just keeps on skipping…

An analysis by Carlypso once again bangs home the point that low gas prices don’t impact sales of pure electric cars.

And because we like to reinforce this fact, here’s the press release confirming it one more time:

Time to reconsider the Nissan Leaf for the Escalade? Not so Fast.

Carlypso Analysis Shows Plummeting Gas Prices Are Not Immediately Impacting New/Used Electric Car Sales

San Carlos, CA – January 20, 2015 – Carlypso, the first technology company to help owners sell used cars completely hassle-free for more money than a trade in, announced today a new study on the impact of low gas prices on electric car sales.

As part of Carlypso’s sales process, the company analyzes millions of transactions each month to get an idea of “true” prices. While Kelly Blue Book and NADA guides have helped users for decades in establishing pricing guidelines, Carlypso’s rigorous price algorithms go a level deeper – predicting the selling price and selling time of any make, model or trim.

This analysis on gas prices and electric car sales was based on 28,074,658 used cars sales, of which 217,217 electric vehicles, from January 2013 to December 2014.

In late 2008 with gas prices at or above $5/gallon an electric vehicle buyer could expect to save about $4,000 per year on gas compared to driving a medium sized SUV[1]. Now those savings are less than half. Experts themselves feared that electrical vehicle sales could take a hit when oil prices fell from around $110 per barrel to $59 per barrel, the lowest level since the financial crises in 2008 / 2009 (see http://www.csmonitor.com/Environment/Energy-Voices/2014/1027/Will-falling-gas-pr ices-kill-the-electric-car).

While one would expect electric car sales to take a tumble with gas prices at an all-time low, that is not, in fact, what Carlypso’s data shows.

Carlypso examined 28,074,658 car sales from January 2013 to December 2014 and found that electric vehicles are slowly gaining market share. By the end of the first quarter in 2015, more than 1% of all new vehicles purchased will likely be electric vehicles. In December 2014, already 0.86% of new vehicles purchased were electric vehicles with Tesla’s 3,500 units of the Model S, Nissan’s 3,102 units of the Leaf Chevrolet’s 1,490 units of the Volt and BMW’s 1,013 unit of the i3 representing more than 70% of electric vehicles sales.

Commensurately, the demand for trucks hasn’t dramatically shifted upwards either in the short term. Despite oil prices falling precipitously, demand has remained relatively consistent between 51-53% of seasonally adjusted sales. Most of the increased demand in light-truck (domestic and foreign) occurred as gas prices stabilized over 2013. This study looked across all categories of light-trucks representing 16.63M retailed units from January 2013 to December 2014.[2]

“The data is a bit surprising; the fact is no one is really changing behavior when it comes time to buying a car despite the savings at the pump. Consumers still want what they want when it comes to features and choosing certain brands and models,” said Nicholas Hinrichsen, Co-Founder of Carlyspo. “We tell our customers to buy exactly what they want, and let the investors worry about the oil prices. Your vehicle’s value and demand is unlikely to change despite the oil market – even though your charges at the pump may change.”

[1] Calculated based on 15,000 miles per year driven, $5.00/gallon gasoline and 17 mpg blended city/highway MPG. Electric vehicle consumption based on 0.025 cents/mile charge.

2 Bureau of Economic Analysis, Light Vehicle Sales

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28 responses to "Carlypso: Data Shows Low Gas Prices Don’t Impact Plug-In Electric Car Sales"

  1. Lensman says:

    The rate of growth of PEV sales in North America has dropped off quite sharply over the past two years. Claiming that such fluctuations have no measurable impact on sales is ignoring reality pretty firmly. Another symptom of low gas prices is the way SUV sales are rising again.

    1. Lensman says:

      Edit error!

      Claiming that significant fluctuations in at-the-pump gas prices have no measurable impact on PEV sales is ignoring reality pretty firmly.

      1. Mikael says:

        It of course has a significant impact, assuming anything else would be stupid. But since the expection is higher gas prises there is little downward impact on sales, but if there were to be some rapid rises in the extremely low US gas price then we would see some real correlated impact (in the form of a large rise in sales).

    2. David Murray says:

      I would agree. I don’t think gas prices impact EV sales as much as some people might think. But to say there is no connection would be ignorant. Also, I can hardly see anyone cross shopping between a Nissan Leaf and a Cadillac Escalade as the article implies.

  2. Scott Franco says:

    Whenever I talk to people about my leaf, I am amazed at the total lack of EV knowledge out there. People appear to believe it has the range of a golf cart, and that it is impossible to charge on the road, etc.

    This is the real reason the effect of gas prices on EV sales is low. The barrier to EV sales is not the price of gas, but about 6 inches of the hardest material on the planet — the gray stuff that sits between two ears.

    1. M Hovis says:

      +1 Scott

    2. Speculawyer says:

      People are lazy and resistant to change. They don’t want to learn new things. And EVs are a tough sell . . . unless you can afford a Tesla, an EV costs more than a gas car and has limited range. Yeah, I know, the long term operating costs make make the EV cheaper in the long run . . . but since when have Americans ever been long-term thinkers?

      1. Scott Franco says:

        Which is why I think EV adoption will accelerate, and dramatically so. What people need is to see their neighbor driving one, see people at work driving one, seeing that in fact, the cars work well for people they know. This is what makes a revolution.

    3. LuStuccc says:

      DoN’t worry, when car maker will REALLY want to sell EVs we will be fed tons of ads with all the details and advantages of EVs in big easy animations and chicks on the hood. Everybody will understand that EVs are simpler, with less maintenance costs and hassles.

  3. Jim_NJ says:

    There are some serious flaws with this “study”.

    1) It’s nearly 2 months old.

    2) Gas prices for the every month of the entire study were between $2.50 and $4/gallon, and all but one month in the ‘study’ had gas prices between $3 and $4/gallon. That is not relevant today.

    3) The statement “from January 2013 to December 2014 and found that electric vehicles are slowly gaining market share” may be true, but it is old, and looks at data when gas prices were substantially higher than January 2015 and February 2015. Looking at data points for gas prices well below $2.50 a gallon, we see the following market share data for plug-ins:

    January 2014: 0.054% January 2015: 0.051%
    February 2014: 0.060% February 2015: 0.054%

    Plug ins are LOSING market share vs. the same periods last year. Lensman is right in saying “Claiming that significant fluctuations in at-the-pump gas prices have no measurable impact on PEV sales is ignoring reality pretty firmly.”

    Data found at this link, and InsideEV’s monthly vehicle scorecard:
    http://online.wsj.com/mdc/public/page/2_3022-autosales.html

    1. LuStuccc says:

      WSJ. Lol!

    2. Lensman says:

      I appreciate your support of my argument, but I think it’s a mistake to compare just one month’s data (the same month in different years) for year-on-year sales increase. There are a lot of monthly fluctuations in auto sales, and the reasons for that are many. Better to compare sales figures for entire years, or at least quarterly figures.

      1. Jim_NJ says:

        LuStuccc: Interesting that you find humor in a link to a page with numbers and graphs. It reminds me of a college roommate of my daughter who ‘felt’ numbers rather than seeing them.

        You might find this page equally as humourous. It shows average gas prices over the last year:
        http://www.gasbuddy.com/gb_retail_price_chart.aspx?time=24

        Gas prices show a steep drop starting in the beginning of December, bottom out at the end of January, and have been in an equally steep climb since then (although pricess have stabilized over the last week).

        Lensman: I agree that “it’s a mistake to compare just one month’s data”, which is why I didn’t do that. If you notice, I compare two months. 🙂

        Here are the year-to-date sales numbers:

        2014 Jan/Feb:
        Plug-ins: 12,740
        Total Vehicle Sales: 2,206,454
        Market Share: 0.577%

        2015 YTD:
        Plug-ins: 12,660
        Total Vehicle Sales: 2,408,742
        Market Share: 0.525%

        As you can see, plug-ins have dropped from 0.577% to 0.525% of the total vehicle market comparing the first two months of 2014 to 2015. It’ll be interesting to see what happens in March, especially with gas prices rising.

        1. Ziv says:

          Jim, I think you have done a better job of analyzing the numbers than Calypso and Eric put together. Gas prices ARE a factor and not a helpful one at this point. Gasbuddy’s chart is very helpful in showing that the impact of the lower gas prices wouldn’t show up until January, for the most part.

          What your numbers don’t show, though, is equally important. Both the Volt and the Leaf are getting old and the Gen II of both are on the horizon, though the Leaf’s is a bit further off.

          We are going to have a pause in the rapid growth of the market share of electric cars in early to mid-2015, but if the price of BEV’s/EREV’s keep dropping, it won’t matter as much if the price of gasoline stays at a lower level than we have seen in the past several years.

        2. kdawg says:

          Here’s a graph over the last few years. It’s more geared toward the Volt, but also has overall data for plug-ins.

          1. Jim_NJ says:

            Thanks Ziv, and thanks for chart Kdawg. It’s sad to see the Volt (my daily driver) going down, but understandable with a new model in the wings.

            Ziv – While the Volt & Leaf are at the end of their cycles, we also have a lot of new entrants, notably the BMW i-series and Ford Energi’s. Unfortunately, there have been fewer plug-in sales in 2015 ytd than there were at the same period last year. And this is in a growing automobile market.

            1. kdawg says:

              I wish we had data on used car sales. I think there are a lot of used Volts & Leafs being bought. I’m sure their market share of used vehicle purchases has gone up now that more & more are available, and the new models are on the horizon.

            2. ziv says:

              Great chart, as always, kdawg! Sorry to see the Volt losing the topdog status to the Leaf but not surprised.
              Jim, I wonder if the other, second tier, entrants to the electric car market can or will build their numbers very quickly. With the huge exception of Tesla, I think 2015 and early 2016 are still going to be Volt & Leaf dominating the market. I kind of look past Tesla because they are so much more expensive than all the other main players.

              Ford could be a huge player with the FFEnergi, (C-Max is ok, but…) but they need to up their game and increase the AER, but it will be hard to do that with the present platform (CD4), and they moved to this platform just 2.5 years ago. So 21 miles or so is probably as good as it gets for Ford for a couple years. The CD3 platform lasted for 6 years, but hopefully the CD5 will come sooner than that.

  4. Alonso Perez says:

    Actually this is bad news, not good.

    It means that EV buyers are still predominantly special-interest types. Environmentalists (Leaf, etc.), Enviros and/or performance types (Tesla), or high-tech fanatics.

    Regular people who look at things like gas costs are probably a small percentage of EV sales, but a much higher one of hybrid sales. So hybrids are down, but the EV adoption curve is little changed.

    This is not just a US thing. I mentioned I have relatives in France who did not know the Renault Zoe existed, two weeks ago!

    We tend to lose sight of this. We see EVs everywhere, but most people are hardly aware they exist.

    1. Lensman says:

      That’s right. The EV revolution is, unfortunately, still stuck in the early adopter stage. Hopefully that will change with the promised nominally “200 mile” EVs coming in a couple of years… but I seriously doubt the situation will change significantly before then.

  5. mustang_sallad says:

    Given enough time, i think sustained low gas prices would definitely have an impact on EV sales. It’s too early to decisively conclude that gas prices “don’t” have an impact. “May not” might be a better phrasing. And sales in Jan and Feb were nothing to write home about!! I think it’s time to give up on this mantra of “gas prices have no impact” and instead just focus on the long term – “gas prices will surely go up in the future” and in fact, they’ve already started to.

  6. Speculawyer says:

    EV sales have continued to grow in the face of cheaper gasoline prices. However, EV sales probably would have grown faster had gasoline prices remained high.

    Probably a good time to pick up a lease on commuter EV.

  7. Driverguy01 says:

    Worldwide EV sales are growing at a pretty good rate and that’s the important part to me.
    If U.S. sales are slowing down, it’s just a bump in the road in my book.
    We can’t predict sales in a year from now, gas could go up before summer and sales take off like crazy, who knows…
    More and more models will be available and more people will learn about EVs and how superior of a product they really are and buy them.
    Still pretty much at the dawn of the revolution.
    I’m very confident for fast adoption, just give it time to get the wheels turning.

    1. Bonaire says:

      It is time to be realistic on this. There is no visible angle to the data to suggest the uptake will increase in rate. In Europe, they do have a quickening rate as they do in China but it still is not a large volume of sales.

      The USA sales appear to be stalling across the board and I have to believe that many customers would buy if more variance was available in the models. CUVs, SUVs, etc. I surely would like a plug-in CUV or even small passenger van like the e-NV200. Cannot buy that one in the USA but it is all over Europe. Where gas prices are high and incentives are also pretty high.

  8. jon says:

    Ev sales are slow simply because the next generation is around the corner. People are waiting for longer range, lower price, and more charging infrastructure.

    1. Bonaire says:

      How about off-lease vehicles being bought up by EV-interested buyers who otherwise would have had to buy-new for double the price? Given the option – some may choose to buy the $17K used model over the $35K new model. Savings are found in less sales tax paid and many people cannot take the whole $7500 tax credit. Given that, I still wonder why the used Leafs, Volts and others are not selling at a higher price.

    2. Speculawyer says:

      That is definitely a piece of it. Who wants to buy an 80 mile range Leaf, Spark EV, eGolf, Fiat 500, Focus EV, etc. when the Tesla Model 3 and Chevy Bolt are on the horizon. But they could lease those EVs such that they would have the lease end just as the new EVs become available.

      1. Or Maybe, they are thinking they are saving their lease money until the next gen cars arrive, or – like me – working hard on paying down some other debts, to the point they can take on another purchase – an EV (For me – another one – my first – was an EV Conversion – in 2006, but the 1989 Donor car is having it’s own Cancer issues)!