New car buyers are looking at alternative fuel vehicles as gas and diesel prices continue to rise in the U.S. and Europe.
“The longer the conflict lasts and the growing risk of disruption in supply/fuel shortages could well drive a surge in electric vehicle sales ,” the report issued by the bank, authored by Senior Global Autos Analyst Michael Tyndall and Global Autos Analyst Alice Martin reads.
The firm reports that fuel prices are up 15-28% year-to-date in the U.K. and 60% in the U.S. According to AAA, the current national average for regular gasoline in the U.S. is $4.51 per gallon, while the price of diesel is over $5.60 per gallon. With petrol prices increasing, interest in electric vehicles is also rising. Toyota and Lexus continue to expand its electrified vehicle lineup, a move that was well in the works before the war began.
With many of its new hybrids and battery-electric vehicles coming to market, Toyota’s North America arm saw electrified vehicle sales rise 11.2% on a volume basis year-over-year, representing 55.8% of total sales volume for the month. The company is seeing strong demand for its hybrids nationwide, not just on America’s coasts where EV demand is typically higher than the average, the company toldBattery-electric vehicle interest also continues to rise.
A company representative cited the Toyota bZ Woodland and Toyota C-HR BEV as prime examples of models attracting new EV customers. Carmakers have remarked that interest in EVs has gone up, but this is not yet translated into a surge in orders,” Tyndalltold.
“Worth noting, however, that EV demand was already quite strong – volumes are up 39% year-to-date to end April in the biggest markets in Europe. ” There are now an estimated 400-500 different types of battery-electric vehicles sold in Europe when all passenger vehicle configurations and commercial models are accounted for. In the U.S., there is approximately one-fifth of that. With long lead times and supplier networks to consider, automakers are not beholden to market whims.
They are, however, looking to see if new EV interest will continue for car buyers. Some are better positioned than others to ramp up production of these models to quickly adjust to market demand. Used EV demand in the U.S. and U.K. is stronger now than before, Cox Automotive and Auto Trader reported earlier this month.
As versions of the Tesla Model Y and Model 3, Nissan Leaf, and Rivian R1S enter the market post-lease, buyers are seeking them out as affordable, emissions-free vehicles. Fuel prices aren’t the only hurdle car buyers and owners are working to overcome. The HSBC report lists higher sticker prices, charging infrastructure and weaker residual values as pain points. Existing car owners could feel more pain too, and not just at the pump.
A supposed leaked internal memo from AutoZone that revealed retailer concerns about a shortage of Group III base oils, synthetic lubricants used in newer vehicles, due to the war, went viral last week. The company has not confirmed if the memo is authentic. A shortage of these oils could cause prices for
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