The Landscape of Electric Vehicles Amid Higher Gas Prices

October 6th, 2022 by

High gas prices can cause American drivers to spend over $1,000 on gas every year. Electric vehicles are seen by many as a better long-term investment due in part to savings at the gas pump.

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Two of the main factors behind the shift toward electric vehicles are environmental impact and high gas prices. While sustainability is a serious concern, rising gas prices often represent a more immediate concern for consumers. We can see the price of gas any time we drive past a gas station. Drivers feel the impact of high gas prices whenever they need to fill up their tanks. 

Every time gas prices increase, more consumers are tempted to abandon their gas engine cars in favor of electric vehicles. But how realistic is it to consider this? And what factors go into determining the price of gas and vehicles?

See also: How much does it cost to drive an electric vehicle compared to a gasoline powered car?

Why Gas Prices Are So High

A woman charging her new Audi EV.The first question to address when talking about high gas prices is the economic one. Why are gas prices so high to begin with? This question has both a simple answer and a very complicated one.

The simple answer is that gas is a very finite resource with extremely high demand. Demand for gas is almost always higher than its supply. One exception to this was early in 2020 when the COVID-19 pandemic halted global travel significantly. Outside of that period, gas has always been one of the world’s most coveted natural resources. This allows those in charge of gas supplies to charge higher rates for their product.

The reason gas prices have spiked so dramatically in 2022 has to do with the ongoing war between Russia and Ukraine. This conflict has cut off Russia’s oil supplies from the U.S. (and many other countries). A resource that was already in high demand suddenly had its supply chain disrupted. With oil in even more limited supply than usual in America, the price of gas is spiking again.

How High Gas Prices Will Go

We can’t know for sure just how much gas prices will rise (or fall) in the short- or long-term. Gas has been over $4 per gallon in the U.S. for most of 2022. While gas prices have started to drop from their highest peaks, experts don’t expect prices to fall to previous years’ levels any time soon.

And if history has taught us anything, it is that the price of gas is unstable. Even when the current rise in gas prices comes to an end, another change in the landscape could cause future price hikes.

How Much Electric Vehicles Do Save

Land Rover Range Rover Hybrid LEVHow much money you can save on gas by purchasing an electric vehicle depends on a couple of factors. First is how much you are spending on gas already. This varies depending on how much you drive, the type of car you drive, and where you live. On average, U.S. drivers can spend anywhere from $1,000-$1,500 per year filling up their gas tank.

Second, the type of electric vehicle you purchase will play a role. If you drive a fully electric vehicle, you will spend a total of $0 at the gas pump for as long as you drive that car. That can amount to at least $1,000 in gas savings annually. In combination with state and federal tax incentives and lower maintenance costs, electric vehicles can realistically be seen as a better financial option than traditional cars.

Hybrids and plug-in hybrids do still require gas, albeit less than traditional gas engine cars. Most hybrid drivers report spending under $1,000 annually at the gas pump.

There is still the cost of electricity to factor in, but this is far less than the cost of gas. While you will likely see a slight increase in your household utility bill when you charge your EV, you are still saving money. According to a Department of Energy estimate, it costs roughly $6 to fully charge an electric vehicle with a 200-mile  range. By comparison, $6 currently can’t even buy you two gallons of gas across the vast majority of the country.

Ray Catena is the local area’s leader in Electrified Luxury. Contact us today to get started in an amazingly powerful and sustainable LEV, or learn more about where you can charge an EV in NY and NJ.

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