Hybrid and EV cost-effectiveness amidst a “volatile” energy future
Another reason to consider a hybrid or plug-in purchase
Energy costs: Is this as good as it gets?
For many American drivers, the economics of hybrid cars and plug-in vehicles don’t make great sense. Even when cost-effective, the time required to recoup the battery-powered premium is simply longer than most Americans are willing to invest.
But, based on the latest energy opinions and forecasts regarding the future of energy prices, particularly oil-based energies such as gasoline and diesel fuels, the future is going to be “volatile”. And, ironically, these could be the best of cheap energy times, especially in the US.
According to a new Financial Times report based on data from the IEA, BP, Shell, Ernst & Young and many other energy experts the world is heading into a bit of a perfect energy storm. Oil production in established oil fields is declining, making North African countries like Libya, for instance, ever more important. Unfortunately, these areas are exploding at the seams of political unrest.
Likewise, with major economies crushed by recession and facing an austere future, investments into both expanding conventional fossil fuel supplies, as well as new sustainable and oil-free alternatives, are declining — at a time when CO2 regulations are set to increase energy costs regardless.
Yet, the West doesn’t have to drive the future of oil demand. Instead, it will be emerging markets like China, India and Brazil that are expected to put pressure on the margins of energy supply and demand.
What’s it all add up to?
Expanding oil demand at a time of declining supplies — both real and, such as in the case of Libya, artificial — and higher energy prices. But it’s not just higher energy prices. It’s also going to be a future of painful energy spikes.
Consequently, anyone in the market for a new vehicle should make their final purchasing decision with a keen understanding that higher — possibly significantly higher — energy prices are almost inevitable from today until the world finally crushes the hold petroleum has over it.
With that assumed, hybrid and EV cost-effectiveness is far better than most Americans realize. Unfortunately, when the next spike hits, it’ll be too late for most Americans. Don’t be one of those Americans.
