The debate rages on as to whether gas prices in America are too low, and we could be looking at a very different picture if things don't change drastically here soon. For an example of what might be, check out New York Times columnist Thomas Friedman, who paints a picture of where the electric vehicle (EV) industry could be going if gas prices stay where they are. In his words, "you'll import your new electric car from China just like you're now importing your oil from Saudi Arabia."
The current average price of $2.60/gallon in the U.S. puts it at nearly half the cost of what China is currently paying ($5/gallon), making electric vehicles all the more attractive there. If that doesn't concern you, consider that Beijing recently announced it is investing $15 billion towards a domestic electric car industry that will start in 20 pilot cities. The money will go directly to the leading automotive and battery companies in China. Friedman thinks creating market incentives to buy electric cars in the U.S. and building a charging infrastructure – on a much larger scale than we're doing now – are the keys to ensuring that the EV industry doesn't move entirely over to China. One place to start: higher gas prices. It's not hard to imagine the increase in electric vehicle demand we'd see if gas prices in America were doubled. That would be one serious market incentive.
[Source: NYTimes | Image: Richard – C.C. License 2.0]