GM Exec: Low Oil Prices Have No Effect On Our Long-Term Electrification Plans
Oil prices went down sharply after a few years in $80-110 range, but many sources are saying that this will not affect electric cars or perhaps only have a minimal impact.
How could it be that the price of fuel for conventional drivetrains isn’t important? Maybe because early adopters are willing to buy EVs anyways, or is it that they don’t believe that low oil prices will stay around for long?
According to Charged EVs, Mark Verbrugge, Director of GM’s Chemical and Materials Systems Laboratory, said at the 32nd International Battery Seminar that low oil prices will not affect the manufacturers plans to develop and introduce new electrified models.
It seems like EVs have passed critical point after in which they prosper in parallel to other solutions.
“Responding to the question-of-the-year during a Q&A session, Verbrugge said, “from an OEM perspective, if you take a longer view, what we’re really driving at is fuel-efficiency targets, and those don’t change.”
During another presentation, Verbrugge noted that it’s not just the US CAFE target of 54.5 MPG by 2025 that’s driving electrification, but a worldwide trend of increased-efficiency and reduced-CO2 regulations. One of his slides highlighted the upcoming individual regulatory requirements of the US, Canada, California, Mexico, the European Union, China, Korea, Japan, India and Australia.
“You’ve got three ways to get there,” Verbrugge continued. “You can electrify your vehicles to some extent, or you can lightweight them, or you can reduce functionality. And [we focus on reducing] the cost of electrification and lightweighting. Reducing functionality is not something you want to do in the market.”
The EV market can be resistant to falling oil prices because battery costs are moving down and we expect that in the near future, manufacturers will offer better value propositions like 200-mile affordable BEVs and cheaper 80-100 miles BEVs.
Dr. Prabhakar Patil, the CEO of LG Chem Power stated:
“The point I can comment on is that the batteries continue to evolve in terms of cost. I’m somewhat surprised myself at the rate at which the cost has come down. It’s kind of a good feedback system, because as the costs come down there is going to be more demand. I’m really waiting to see the 200-mile EVs priced at around $30,000, because that could potentially be a tipping point.”
So, it seems oil prices no longer play a part in determining the future of batter-electric cars.
Source: Charged EVs