Blog – Economy
Blog Posts related to the Economy
A person driving a Nissan Leaf will spend an EPA estimated $600 per year on electricity to power it. A person driving a gas-burning car with 37 mpg will spend an EPA estimated $1,400 per year on gas to drive it. The gas-burning car will cost more than twice as much. If you compare against an average car getting 26mpg will cost an EPA estimated $2,150 per year, more than 3.5 times the cost of an EV. However, the gas burning car driver doesn’t have options to reduce that cost, while the EV driver does.
How can an EV driver get a better deal on electricity?
First, many utility companies offer a reduced rate for overnight charging which can drop the cost.
Third, while the deals last, many public charges are free for now and I know an EV driver who has been able to charge their car using only free public chargers.
For myself, I have solar on my roof, have a great time of use deal from my power company, and know where the cheap chargers are located through my cell phones plug-share application. Even at $3.00 per gallon, most families pay more in a month for gas than I’ll pay for electricity to run my car in all of 2014. We bought our EV as a second car, but because of the cost to operate, we now use it as our primary car. Saving money is my number one reason why I like my electric car.
According to a new article by Forbes, the U.S. Energy Information Administration (EIA) said this week that gas prices, which fell to an average of $3.49 per gallon in August (12 cents lower than the July average and 21 cents under June’s average), are poised to continue their downward trend and will hit an average of $3.18 per gallon by December, the lowest monthly average since January 2011.
This comes as great news for consumers as they have been grappling with persistently high fuel prices over the last four years. The EIA warns that prices vary wildly by region, “with monthly average prices in some areas falling above or below the national average price by 30 cents per gallon or more. This is no more apparent than in Roanoke, Virginia, where prices sit at $3.075 per gallon; residents of Spartanburg, South Carolina, are currently pumping gas that’s $3.085 a gallon.”
The influx of electric vehicles hitting the road – now averaging roughly 11,000 per month, plus increased U.S. crude production at nearly 9 million barrels per day, and newer cars replacing aging models that had miserable gas mileage – have all depressed demand for “black gold.”
The EIA released this statement on the weakened demand:
“The general outlook for motor gasoline is for declining consumption as average new vehicle fuel economy continues to improve. As new cars replace less-efficient older cars, the increase in the average fleet fuel economy is expected to outpace the growth in the driving age population and vehicle miles traveled and put continuing downward pressure on gasoline consumption.”
This is certainly great news for the EV community as consumers begin to gravitate to more fuel efficient vehicles, and in some cases, opt for a pure EV, that studies show are far cheaper to drive than legacy vehicles.
American and foreign auto companies sold nearly 11,000 plug-ins for the month of August, and Nissan LEAF, the industry-leading pure EV, led the way with nearly one-third of total volume (3,186). The sales mark for the LEAF represents a 32% increase over August 2013, and a new all-time monthly record for an electric vehicle.
The Chevy Volt, which is a hybrid plug-in, registered 2,511 units, far lower than the 3,300+ sales it moved last August. The Detroit automaker, however, is confident in its brand, as monthly sales have increased every month this year.
The BMW i3 made a splash with its eye-popping number of 1,025 sales. The pure EV, which debuted in the U.S. in May, had averaged roughly 300 units in its initial three months. The move into the four digit mark might indicate strong demand for the German EV moving forward.
Meanwhile, Toyota’s Prius Plug-in failed to crack the 1,000 level, selling only 818 cars. After hitting an all-time sales high in May, sales have dropped precipitously since. It is no secret Toyota prefers hybrids over pure electrics, and only time will tell if this strategy will come back to haunt the Japanese automaker.
In other news, after acquiring its renewable energy unit – Chevron Energy Solutions back in 2000 – Chevron has announced the sale of its renewable energy subsidiary to OpTerra Energy Services, a private firm backed by Oaktree Capital Management based in Los Angeles. It is quite a puzzling move for the energy giant as it diversifies itself out of the renewable energy sector. The renewable energy field is growing exponentially year-over-year due to new government mandates, rapid innovation in solar technology, and strong community support for less fossil fuels.
In fact, according to Ecowatch, solar energy generation continues to climb in the U.S. with more than half a million homes and businesses now generating solar energy. The solar industry alone employs 143,000 Americans and pumps $15 billion a year into the economy. The Solar Energy Industries Association recently released these interesting developments:
The U.S. installed 1,133 megawatts (MW) of solar photovoltaics (PV) during the second quarter, with residential and commercial segments accounting for nearly half of solar PV installations in the quarter. It is the fourth largest quarter for solar installations since the sector’s debut and the third consecutive quarter with more than 1 GW installed. Installed capacity in the U.S. is now close to 16 million GW, enough to power 3.2 million homes.
The growing concern within the Federal Reserve is whether or not the sluggish economic recovery, characterized by subpar GDP growth and limited job creation, is a part-time effect of a devastating recession, or a more perilous, a long-term issue within the economy.
During the Great Depression, economist Alvin Hansen developed a theory called “Secular Stagnation,” which attempted to explain why certain economic recoveries are mired in long periods of slow growth. Among the chief tenants of secular stagnation, is nominal interest rates falling below zero, an incredibly difficult feat to achieve due to the zero bound effect that acts as a buffer to falling interest rates.
Nevertheless, Larry Summers, prominent economist and former Treasury Secretary under the Clinton Administration, recently said the natural rate of interest has indeed fallen below zero. Couple that with other secular stagnation hallmarks of persistently slow growth, stubbornly high unemployment, all of which stretched across long time lines, and you can see why economists are starting to worry. So the question becomes, are our economic issues cyclical, best case scenario, or structural, worst case scenario?
Recent history sides with the cyclical argument. The three previous economic recoveries have performed in similar fashion to what we are seeing today. The second recession of the 1980s produced a recovery that required 65 months to reduce the unemployment rate to 5.5%. The recession of the early 90s manufactured a slow recovery that took 45 months for the unemployment rate to reach healthy levels. The recovery time for the mild recession of 2001 lasted 32 months.
Our current recovery, now at 61 months since the end of the Great Recession, sees an unemployment rate at 6.2%, which most economists believe will lower month-over-month between now and the end of the year.
Perhaps this is simply the new normal. Returning to prerecession economic outputs will require years of slow, gradual growth that we are now getting accustomed to, however painful this process has become.
IHS predicts plug-in production to hit 403,000 this year, giving an increase of 67%. The United States will count for over 30% of this increase globally. The more exciting news is that global charging station numbers are set to pass the 1.1 million mark by the end of 2014.
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Tesla has made range anxiety a thing of the past! A few years ago, it was very unlikely that anyone would try and go cross country in a fully electric vehicle. This past week, a father/daughter team completed a trip from New York to California using the Tesla Supercharger network exclusively. Tesla drivers can now feel confident in their ability to make the trek across the US, and completely free of cost.
Check out the article for more information regarding Tesla and the completion of the cross country supercharger trip.