YOUR MONEY RESET 2015
WHEN WORLD crude oil prices hit a fiveyear low at the end of 2014, millions of Canadians drivers welcomed the long-needed relief at the pump. But not everyone cheered cheaper petrol: electric-hybrid manufacturers worried that 2015 buyers would eschew their environmentally friendly models and return to the suddenly cheaper-to-run conventional cars.
At the start of the year, we saw prices as low as $0.785 a litre in Edmonton, with most other cities somewhere in the $0.85 range. The last time gas prices were in the $0.70 range was in February 2005. In September 2005, prices spiked and prices climbed to more than a dollar a litre. Stepping back even further to January 1990, many remember gas prices hovering at around $0.50 a litre.
While gas prices have always affected buyers’ choices, this is our first experience of dropping gas prices with so many alternative electric and hybrid vehicles on the road. The immediate effect was clearly felt by Tesla, regarded as the premier electric vehicle producer, which saw its shares decrease by nearly 20 per cent at the end of 2014.
But that hasn’t seemed to faze Tesla or any automaker that invests in hybrid and electric technology.
“Fuel prices are only one reason why consumers opt for a zero-emission vehicle,” says Marcel Guay, chief marketing manager for Nissan LEAF, Nissan Canada Inc. “We surpassed the 1,000 unit mark [in 2014], more than doubling the 2013 total sales mark of 470 LEAF vehicles.”
Canada’s smallest mainstream automaker concurs. “Sales of our all-electric i-MiEV have stabilized to just over 100 units a year,” says John Arnone, Mitsubishi Canada’s manager of public relations. “That suggests that irrespective of fuel prices, there are Canadian consumers who have a suitable lifestyle to embrace an EV ownership experience.”
General Motors introduced the Chevrolet Volt, a vehicle marketed as an extended-range vehicle, in 2011, and it doesn’t see a correlation between sales and gas prices. Volt sales follow the same yearly pattern that every brand experiences – more sales in the summer, less in the winter.
For customers seeking a financial reason to buy electric, GM says the price of gas would need to drop below $0.50 a litre before the cost per kilometre favours gas-powered vehicles.
And while prices have dropped, we would likely need Michael J. Fox’s DeLorean to head back to 1990 to relive sub-$0.50 a litre prices. In other words, don’t hold your breath.
Instead, think about how your daily commute affects the environment as well as your day-to-day needs to determine if you should go electric or remain with the masses filling up at the pump with an eye on just how low it can go.