Electric car sales soared in 2015 (albeit from a very low level). This was in the news the other day. Why have electric car sales soared as the oil price has plunged? Not sure but it must have something to do with environmental concerns rather than economics. As we wrote in our book even with higher oil prices the economics weren’t that great. That said what we wrote is as we predicted slightly out of date. The range of the cars is increasing and the costs of purchase falling. This will improve the economics dramatically and make up for some of the fall in oil prices. The number of charging points is also increasing.
The government has not cut the UK’s grant scheme for electric cars unlike it has every other green scheme. Indeed electric cars are to be allowed to use bus lanes. This maybe because of the problem of air quality in our cities which has already been a major issue this year. There are many that think that electric cars are not the answer to urban pollution. I disagree with their findings. A simple calculation taking the increased efficiency of the vehicles over fossil fuel versions into account shows this. The urban pollution problem has got so bad in so many cities that even using polluting power plants elsewhere has got to be better (although there could be a problem for those immediately around) and its largely caused by diesel vehicles. Besides there is a huge shift to renewables going on. However, the other criticisms I agree with. We made these and others in our book. If electric car sales keep increasing at this rate they will be a major part of the market in a few years. Something that is to be welcomed at least in part.