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There's an alternate feedback loop. As more people drive electric cars, demand for oil drops and decreases the price of gasoline, making gasoline cars more eco

There's an alternate feedback loop. As more people drive electric cars, demand for oil drops and decreases the price of gasoline, making gasoline cars more economical. I predict a bifurcated market: Cars wind up as electric while light trucks (and their large SUV brethren) stick to fossil fuels.

AnthonyMouse 10y ago
> There's an alternate feedback loop. As more people drive electric cars, demand for oil drops and decreases the price of gasoline, making gasoline cars more economical. A car payment is maybe $200/month. Car insurance is maybe $100/month. 12,000 miles/year at 30MPG and $2/gallon is $67/month. ~$1.20 of the $2/gallon is taxes, refining, distribution and marketing. So if the market price of crude oil falls by 75%, its contribution to a gallon of gas goes from $.80 to $.20. That's $20/month difference, or ~5% of the cost of operating a car. And that's assuming crude prices actually fall by that much, and that governments don't raise the fuel tax to make up revenue and/or fight climate change. It's not hard to imagine adding $.49/gallon to the gas tax.
- manicdee 10y ago
  Governments will increasingly switch from fuel excise to road use taxes, in most cases removing the excise to help bolster their domestic oil industry.
  - AnthonyMouse 10y ago
    Road use taxes are dumb. The only reason to have gas tax instead of funding roads the same way we fund the military is to discourage fossil fuel use. And most governments, including most of the high population US states, don't have any domestic oil industry to speak of.
pedalpete 10y ago
This may be true, but the cost of oil would have to drop below the cost of electricity. According to this article, gasoline would have to be very cheap in order to compete with the cost of electricity. At one point the marginal difference probably doesn't matter.

AnthonyMouse 10y ago

> There's an alternate feedback loop. As more people drive electric cars, demand for oil drops and decreases the price of gasoline, making gasoline cars more economical. A car payment is maybe $200/month. Car insurance is maybe $100/month. 12,000 miles/year at 30MPG and $2/gallon is $67/month. ~$1.20 of the $2/gallon is taxes, refining, distribution and marketing. So if the market price of crude oil falls by 75%, its contribution to a gallon of gas goes from $.80 to $.20. That's $20/month difference, or ~5% of the cost of operating a car. And that's assuming crude prices actually fall by that much, and that governments don't raise the fuel tax to make up revenue and/or fight climate change. It's not hard to imagine adding $.49/gallon to the gas tax.

manicdee 10y ago
Governments will increasingly switch from fuel excise to road use taxes, in most cases removing the excise to help bolster their domestic oil industry.
- AnthonyMouse 10y ago
  Road use taxes are dumb. The only reason to have gas tax instead of funding roads the same way we fund the military is to discourage fossil fuel use. And most governments, including most of the high population US states, don't have any domestic oil industry to speak of.

pedalpete 10y ago

This may be true, but the cost of oil would have to drop below the cost of electricity. According to this article, gasoline would have to be very cheap in order to compete with the cost of electricity. At one point the marginal difference probably doesn't matter.