Gas Price Charts look like steep cliffs. Employers are finally calling white-collar workers back to their offices and their commutes. Nations around the world have banned Russian gas and oil after the country’s invasion of Ukraine. In addition, the worsening climate crisis requires humanity to keep every possible bit of carbon out of the atmosphere (and even take some of it out), even though transportation accounts for nearly a quarter of global emissions.
Gosh, it sure would be a great time to own an electric vehicle.
A lot of people seem to agree with that. Auto retailer Edmunds says searches for hybrids, plug-in hybrids and battery-electric vehicles jumped nearly 40 percent in the past month, up from 18 percent in the first week of March alone. Environmentalists and Security issues are in. Last week, a senior attorney for the Natural Resources Defense Council called on Americans to ditch their gas-powered rides, arguing, in a case that went beyond this month’s terrifying events in Ukraine, that “drivers have been held hostage for too long.” at the whim of petro-dictators.” The Russian war has revived Carter-era calls for “energy independence”.
Too bad it’s a terrible time to buy a car, especially an electric one. Pandemic problems in the supply chain, manufacturing crises and congressional doubts about the future of electric subsidies have crashed into new challenges linked to Russia’s economic sanctions. “We don’t have enough batteries and car manufacturing capacity to meet today’s demand for electric vehicles, which is missing an excellent opportunity,” said environmental economist Mark Paul of the New College of Florida. Plus, for the people most squeezed by the rising cost of gas, going electric is likely to remain out of reach. The average transaction price for a new EV in February was $60,054, nearly $15,000 higher than that for all new vehicles, according to Edmunds.
Gas prices have already soared in the US on the back of rising demand fueled by the country’s ‘post’ Covid recovery. Meanwhile, the countries that control global oil and gas supplies had not yet ramped up production they cut off during the depths of the pandemic. Then Russia invaded Ukraine. Global sanctions against Russian industry have put enormous pressure on the petroleum market, pushing prices up everywhere. The US gets only a small portion of its oil and gas from Russia, yet the national average sales price for gasoline reached $4.33 a gallon on Monday and $5.74 in California, according to the American Automobile Association — highs that haven’t been. seen since the 2008 recession.
But the same disasters that have rocked the gasoline market have also rocked the automotive world. Demand for semiconductors was already on the rise before the pandemic, as silicon chips are now being put into an increasingly dizzying array of products: toys, light bulbs, industrial machines. The automotive industry is no exception. Even the most basic new gas-powered car may need 100 chips to power its engine, safety and infotainment systems; advanced EVs can have more than 1,000. But supply shocks from the global reach of Covid-19 made it even harder for automakers to find the chips that make their cars work. Now, analysts predict the crisis will worsen as Ukraine is a major producer of neon gas, which semiconductor manufacturers use to power the lasers that write on computer chips. Experts say efforts to ramp up chip production in the US won’t pay off for years.
Largely because of the chip crisis, vehicle sales in the US may only hit 15 million this year, 2 million less than a typical year of production, says Warren Browne, an auto veteran who now runs his own supplier consultancy. “The chip shortage is overwhelming everything,” he says.
