MONEY Gas

Gas Prices Spike More Than 20¢ Per Gallon Overnight

The price of gas is displayed in downtown Midland on February 4, 2015 in Midland, Texas.
Spencer Platt—Getty Images

The national average for a gallon of regular is up 10¢ over the past three days, and in some parts of the country, prices jumped more than 20¢ overnight.

What was a slow rebound in gas prices at stations around the U.S. has picked up the pace significantly over the past few days. Last week, the national average bottomed out at $2.03 per gallon, before inching up to $2.05 on Monday, according to AAA. It then spiked up to $2.11 on Wednesday and $2.15 today.

Drivers in certain parts of the country have seen gas prices increase in alarmingly quick fashion, far outpacing the rise in the national average. In central Ohio, for instance, the average price for a gallon of regular was $2.26 on Wednesday, up from $2.04 the day before. As of Thursday, AAA reports that the statewide per-gallon average in Ohio is up to $2.27.

The gas-price tracking service GasBuddy reported that 26 metropolitan areas in the U.S. saw spikes of 15¢ or more per gallon from Tuesday to Wednesday of this week. Michigan has been hit especially hard: Eight out of the nation’s top 15 highest price increases in occurred in the state, including the three largest spikes. Up until last week, Michigan had enjoyed five straight weeks of sub-$2 gas; at last check, the statewide average was $2.28.

Meanwhile, drivers in states where the average has been under $2 for weeks should reacclimate themselves with having to pay more at the pump: The averages in Alabama, Arizona, Colorado, Kansas, Louisiana, Missouri, New Jersey, New Mexico, Oklahoma, Texas, and Wyoming have all inched up back to within two or three pennies of the $2 threshold.

Even if prices continue to creep higher in the short term, however, drivers won’t necessarily be subjected to ever-higher prices at the pump in the months ahead. On Wednesday, the Wall Street Journal noted, U.S. oil stockpiles rose unexpectedly to 6.3 million barrels—which is the highest it’s been at this time of year in at least eight decades. When there’s a surplus of oil, wholesale prices drop, and that generally translates to a subsequent drop in retail prices at gas stations.

No one knows for sure where gas prices are heading, but even after the recent spike, drivers in many parts of the country are still paying less than $2 per gallon—an absolute bargain compared to 2011, 2012, and 2013, when the year-long national averages were $3.49 or higher. And most signs indicate that prices won’t be heading back to those kinds of levels anytime soon.

MONEY Autos

Car Ownership Has Peaked—or Maybe It Hasn’t

new cars on the lot
Per-Anders Pettersson—Getty Images

After a strong January for the auto industry, forecasts call for rising car sales in 2015—followed by more increases in the years ahead. So what's this business about already hitting "Peak Car"?

Based on research from the asset management firm Schroders, Quartz recently made the case that “the Western world’s century-old love affair with the automobile is coming to an end.”

By and large, the data indicate that people around the world—young people in particular—are driving less, less interested in owning cars, and even less likely to bother getting driver’s licenses. In light of such statistics, the argument is that America, and perhaps the world as a whole, has reached the marker that’s been dubbed as “Peak Car,” the point at which car sales and ownership and driving in general go no higher.

“Our research illustrates that for the past decade the developed world has shown signs of hitting ‘peak car,’ a plateau or peak in vehicle ownership and usage,” the Schroders study states plainly.

At the same time, however, Automotive News and others point this week to the new IHS report forecasting that global auto sales will hit 88.6 million in 2015, which would mean a 2.4% increase over 2014 and would mark the fifth year in a row of increasing car sales. Not all parts of the world are expected to be buying more vehicles: Despite cheap gas prices, car sales in South America, Russia, and Western Europe are likely to be underwhelming. Yet strong sales are anticipated by IHS in North America and China, bringing about a “slower, not lower” overall rise in the auto market globally.

Car dealership sales in the northeastern U.S. were likely hurt in January due to major snowstorms, and yet just-reported auto sales for the month have been impressive. It’s expected that automakers will post brag-worthy sales increases of 14% or more, compared with the same period a year ago. At such a pace, total sales for the year could reach 17 million.

IHS’s forecast calls for light-vehicle sales of 16.9 million in the U.S. in 2015, and that might be on the low side. “With a strong exit to 2014, and gasoline prices currently plunging, consumers may feel even more positive throughout 2015,” an IHS statement said. And the IHS report calls for higher sales tallies going forward, with predictions of 17.2 million U.S. car sales in 2016 and 17.5 million in 2017. If that last prediction is realized, it would mean a new peak for the nation, which experienced what was then an all-time high of 17.4 million sales in 2000.

In other words, IHS researchers are saying that neither the U.S. nor the world has reached Peak Car, and that from the looks of things we won’t hit that point for years to come. The Economist has also made the case that, despite millennials’ apparent preference for urban living and lack of enthusiasm for driving and car ownership, “it is not clear that declining car ownership among young urbanites will have more than a marginal effect on overall car sales,” and that Peak Car “still seems quite a long way off.”

The researchers at Schroders and IHS can’t both be right. So who is wrong? Well, we should point out that one of Schroders’ graphs illustrates how consumer interest in buying cars has rebounded across all age groups since the Great Recession ended. Also, some of Schroders’ data is dated: The most recent drivers’ license statistics are from 2010, for instance, while the numbers reflecting a rising propensity to buy cars in the U.S. go no further than 2012.

On the other hand, there are compelling, data-driven arguments that millennials will never love automobiles as much as car-crazed Baby Boomers, that the average number of vehicles owned per driver (or household) will never be as high as it once was, and that people all over the world will be out on the roads less year after year thanks partly to smartphones, e-commerce, car sharing, and other technologies. At the same time, it sure looks like auto sales will be on the rise globally and in the U.S. in 2015, and the year after that, and the year after that, and … who knows?

If Google and/or Uber manage to create and perfect a practical driverless taxi in the near future, all bets—and forecasts—could be off.

MONEY Gas

Gas Prices Starting to Rise

gas coming out of nozzle and rising
Microzoa—Getty Images

After dropping mightily for four months in a row, prices at the pump appear to have bottomed out—meaning you'll probably pay more than $2 a gallon again soon, if you aren't already.

Last week, something weird happened: Gas prices rose. In most years, an increase in gas prices around now isn’t unusual at all. In fact, a gas price hike at the start of the year has become more or less an annual tradition lately. But this year, the late January rise ended a historic decline in fuel prices that stretched 123 consecutive days.

That rare increase in prices at the pump appears to be no fluke. According to AAA, the national average for a gallon of regular bottomed out at about $2.03 last week. The average has since inched up a penny or fraction of a penny here and there, reversing earlier trends in which it dropped 1¢ daily for weeks. Yesterday, the national average hit $2.056, and it’s up to $2.067 on Tuesday.

Very recently, AAA forecast that the national average would dip below $2 a gallon by the start of February. Now it looks like we’ll never get there. Instead, AAA researchers and other gas analysts are saying that prices are likely on the upswing through spring.

“It is a good bet that most drivers will pay more for gasoline in March than today,” AAA spokesperson Avery Ash said in a press release this week.

Oil refineries have reduced their output lately, and the result is rising wholesale gasoline prices—which translate to rising consumer prices as well, GasBuddy senior analyst Gregg Laskoski explained in a post published Monday: “From Jan. 7 up to this morning, wholesale prices on average are up 23 cents per gallon so there’s no doubt now that the first-quarter climb is under way and is already being reflected in rising prices at the pump.”

In all likelihood, the gas stations that will see the steepest price increases are the ones that have been selling the cheapest gas in recent weeks. For instance, the statewide average in California is currently $2.45 per gallon, but some stations have been trying to woo customers with prices under $2. It’s these kinds of stations, GasBuddy analyst Allison Mac told the Sacramento Bee, that “will see the most dramatic change. Those are the stations that are going to see 20 to 30 cents [price-per-gallon increases], probably over the next couple of weeks into mid-February.”

Even with the tides turning toward higher gas prices, drivers should keep in mind that fuel costs remain exceptionally cheap. This week’s message from AAA noted that more than half the gas stations in the U.S. still have gas under $2 per gallon, that the average last month was $2.11—incredibly cheap compared to $3.30 in January 2014—and that it does not expect the national average to ever surpass $3 in 2015. Mind you, the average was well over the $3 mark for the majority of 2014, and it was considered a big deal when prices dipped under $3 at any station. What’s more, the national averages for the years 2012 and 2013 were well over $3 per gallon.

In other words, even if gas prices creep upward for months, drivers will still be paying far less than they have during the past few years.

MONEY Gas

Gas Prices Rise for the First Time in 4 Months

That incredible drop in the cost of filling up your car has taken a very small break.

MONEY Airlines

Airlines Drop Fuel Surcharges, but Flights Don’t Get Cheaper

A Boeing Co. 737 aircraft operated by Qantas Airways Ltd. flies past the air traffic control tower as it lands at Sydney Airport in Sydney, Australia
Brendon Thorne—Bloomberg via Getty Images A Boeing Co. 737 aircraft operated by Qantas Airways Ltd. flies past the air traffic control tower as it lands at Sydney Airport in Sydney, Australia

Two airlines recently removed those annoying fuel surcharges that have been tacked onto passenger tickets for years. So that means airfare is less expensive, right? Nope.

The idea of a fuel surcharge is pretty simple: When the cost of fuel is abnormally high, instead of simply raising prices, a special, supposedly temporary fee is passed along to customers. When fuel costs retreat back to “normal” levels, logic dictates that the surcharge would disappear.

It’s this kind of wholly logical thinking that has had airline travelers up in arms over the last several months, as the price of gasoline and rocket fuel has declined substantially, yet fuel surcharges remain and airfares are still extraordinarily high. Consumer advocacy groups Travelers United and FlyersRights.org recently sent letters to airline CEOs voicing their outrage and demanding that airfares be lowered “in light of the 50% reduction in jet fuel prices since June, 2014.”

“Common sense says prices should drop when the biggest cost factor in flying nosedives,” Charlie Leocha, chairman of Travelers United, said via press release. “This isn’t rocket science. Though economists can make lots of excuses, if there were more competition, consumers would be seeing lower costs to fly.”

At first glance, it appears as if some of this madness is coming to an end Down Under. As the Sydney Morning Herald put it, Virgin Australia recently announced it was removing “consumer-reviled references to fuel surcharge” from its tickets. This surcharge added as much as AUD$680 (US$540) to the cost of an international round trip. Qantas, which competes with Virgin Australia on many routes, including flights between the U.S. and Australia, followed suit by saying that it too would get rid of fuel surcharges on tickets.

To which travelers might reasonably respond: Hallelujah!

Not so fast. The removal of these hated, astronomically expensive fees is having little to no impact on the actual cost of airfare paid by travelers. For the most part, the airlines are simply incorporating fuel charges into base airfare prices, and the amount paid out of pocket by passengers will remain stubbornly high.

Virgin America said that coach passengers can expect to see a decrease of perhaps AUD$40 (a measly $32 in U.S. currency) on tickets between the U.S. and Australia. Mind you, the old surcharge hit passengers to the tune of AUD$680 (US$540). As for Qantas, its airfares will remain exactly the same even as fuel surcharges disappear.

In other words, the carriers are jacking up flight prices to compensate for the “removal” of fuel surcharges. They’re giving travelers a price break with one hand while taking more money away from customers with the other. The net result is that passengers are paying pretty much the same for the cost of transportation before the changes were announced. The only thing that’s changed is how the airlines break down the flight costs.

To airline passengers, who want their total out-of-pocket costs to drop, and who couldn’t care less about how the airlines categorize each component of a flight’s price, these “changes” mean that nothing at all has really changed.

MONEY Oil

Why Oil Prices May Not Recover Anytime Soon

A worker waits to connect a drill bit on Endeavor Energy Resources LP's Big Dog Drilling Rig 22 in the Permian basin outside of Midland, Texas, U.S., on Friday, Dec. 12, 2014.
Brittany Sowacke—Bloomberg via Getty Images

Things could get worse for the oil industry before they get better.

Oil prices have collapsed in stunning fashion in the past few months. The spot price of Brent crude reached $115 a barrel in June, and was above $100 a barrel as recently as September. Since then, it has plummeted to less than $50 a barrel.

Brent Crude Oil Spot Price Chart

There is a sharp split among energy experts about the future direction of oil prices. Saudi Prince Alwaleed bin Talal recently stated that oil prices could keep falling for quite a while and opined that $100 a barrel oil will never come back. Earlier this month, investment bank Goldman Sachs weighed in by slashing its short-term oil price target from $80 a barrel all the way to $42 a barrel.

But there are still plenty of optimists like billionaire T. Boone Pickens, who has vocally argued that oil will bounce back to $100 a barrel within 12 months-18 months. Pickens thinks that Saudi Arabia will eventually give in and cut production. However, this may be wishful thinking. Supply and demand fundamentals point to more lean times ahead for oil producers.

Oil supply is comfortably ahead of demand

The International Energy Agency assesses the state of the global oil market each month. Lately, it has been sounding the alarm about the continuing supply demand imbalance.

The IEA currently projects that supply will outstrip demand by more than 1 million barrels per day, or bpd, this quarter, and by nearly 1.5 million bpd in Q2 before falling in line with demand in the second half of the year, when oil demand is seasonally stronger.

That said, these projections are built on the assumption that OPEC production will total 30 million bpd: its official quota. However, OPEC production was 480,000 bpd above the quota in December. At that rate, the supply-and-demand gap could reach nearly 2 million bpd in Q2.

Theoretically, this gap between supply and demand could be closed either through reduced supply or increased demand. However, at the moment economic growth is slowing across much of the world. For oil demand to grow significantly, global GDP growth will have to speed up.

It would take several years for the process of lower energy prices helping economic growth and thereby stimulating higher oil demand to play out. Thus, supply cuts will be necessary if oil prices are to rebound in the next two years-three years.

Will OPEC cut production?

There are two potential ways that global oil production can be reduced. One possibility is that OPEC will cut production to prop up oil prices. The other possibility is that supply will fall into line with demand through market forces, with lower oil prices driving reductions in drilling activity in high-cost areas, leading to lower production.

OPEC is a wild card. A few individuals effectively control OPEC’s production activity, particularly because Saudi Arabia has historically borne the brunt of OPEC production cuts. Right now, the powers that be favor letting market forces work.

There’s always a chance that they will reconsider in the future. However, the strategic argument for Saudi Arabia maintaining its production level is fairly compelling. In fact, Saudi Arabia has already tried the opposite approach.

In the 1980s, as a surge in oil prices drove a similar uptick in non-OPEC drilling and a decline in oil consumption, Saudi Arabia tried to prop up oil prices. The results were disastrous. Saudi Arabia cut its production from more than 10 million bpd in 1980 to less than 2.5 million bpd by 1985 and still couldn’t keep prices up.

Other countries in OPEC could try to chip in with their own production cuts to take the burden off Saudi Arabia. However, the other members of OPEC have historically been unreliable when it comes to following production quotas. It’s unlikely that they would be more successful today.

The problem is that these countries face a “prisoner’s dilemma” situation. Collectively, it might be in their interest to cut production. But each individual country is better off cheating on the agreement in order to sell more oil at the prevailing price, no matter what the other countries do. With no good enforcement mechanisms, these agreements regularly break down.

Market forces: moving slowly

The other way that supply can be brought back into balance with demand is through market forces. Indeed, at least some shale oil production has a breakeven price of $70 a barrel-$80 a barrel or more.

This might make it seem that balance will be reasserted within a short time. However, there’s an important difference between accounting profit and cash earnings. Oil projects take time to execute, involving a significant amount of up-front capital spending. Only a portion of the total cost of a project is incurred at the time that a well is producing oil.

Capital spending that has already been incurred is a “sunk cost.” The cost of producing crude at a particular well might be $60 a barrel, but if the company spent half that money upfront, it might as well spend the other $30 a barrel to recover the oil if it can sell it for $45 a barrel-$50 a barrel.

Thus, investment in new projects drops off quickly when oil prices fall, but there is a significant lag before production starts to fall. Indeed, many drillers are desperate for cash flow and want to squeeze every ounce of oil out of their existing fields. Rail operator CSX recently confirmed that it expects crude-by-rail shipments from North Dakota to remain steady or even rise in 2015.

Indeed, during the week ending Jan. 9, U.S. oil production hit a new multi-decade high of 9.19 million bpd. By contrast, last June — when the price of crude was more than twice as high — U.S. oil production was less than 8.5 million bpd.

One final collapse?

In the long run — barring an unexpected intervention by OPEC — oil prices will stabilize around the marginal long-run cost of production (including the cost of capital spending). This level is almost certainly higher than the current price, but well below the $100 a barrel level that’s been common since 2011.

However, things could get worse for the oil industry before they get better. U.S. inventories of oil and refined products have been rising by about 10 million barrels a week recently. The global supply demand balance isn’t expected to improve until Q3, and it could worsen again in the first half of 2016 due to the typical seasonal drop in demand.

As a result, global oil storage capacity could become tight. Last month, the IEA found that U.S. petroleum storage capacity was only 60% full, but commercial crude oil inventory was at 75% of storage capacity.

This percentage could rise quickly when refiners begin to cut output in Q2 for the seasonal switch to summer gasoline blends. Traders have even begun booking supertankers as floating oil storage facilities, aiming to buy crude on the cheap today and sell it at a higher price this summer or next year.

If oil storage capacity becomes scarce later this year, oil prices will have to fall even further so that some existing oil fields become cash flow negative. That’s the only way to ensure an immediate drop in production (as opposed to a reduction in investment, which gradually impacts production).

Any such drop in oil prices will be a short-term phenomenon. At today’s prices, oil investment will not be sufficient to keep output up in 2016. Thus, T. Boone Pickens is probably right that oil prices will recover in the next 12 months-18 months, even if his prediction of $100 oil is too aggressive. But with oil storage capacity becoming scarcer by the day, it’s still too early to call a bottom for oil.

TIME Morning Must Reads

Morning Must Reads: January 24

Capitol
Mark Wilson—Getty Images The early morning sun rises behind the US Capitol Building in Washington, DC.

Fuel’s Paradise

A majority of Americans are paying less than $2 per gallon for gas for the first time since 2009, and the ever-cheapening fuel is helping put more money in consumers’ pockets and bolster the economy

NASA Finds ‘Super Earths’

NASA’s Kepler Mission has found many planets in the “Goldilocks zone,” where it isn’t too hot or cold for water to exist

McDonald’s CEO Asks for Time

McDonald’s CEO Don Thompson cited a litany of actions the company is taking to reverse steep declines in sales

Federal Judge Strikes Down Gay-Marriage Ban in Alabama

A U.S. district judge ruled Friday in favor of two Mobile women who sued to challenge Alabama’s refusal to recognize their marriage performed in California. The judge said a state statute and 2006 amendment to the Alabama Constitution violated the U.S. Constitution

Big Storm Headed for the East Coast

A nor’easter could wreak havoc all along the East Coast this weekend, with a mix of rain and snow that will likely cause airline and traffic delays along the I-81 and I-95 corridors. Up to a foot of snow could accumulate in some locations

Obama to Cut Short India Trip to Visit Saudi Arabia

The schedule change, announced shortly before Obama left for India, means the president will skip plans to see the Taj Mahal, and instead pay a call on an influential U.S. ally in the volatile Mideast. Saudi Arabia’s King Abdullah died Friday at age 90

An Asteroid Will Fly Close to Earth on Monday

It doesn’t sound like a close shave, but in astronomical terms, it is. An asteroid will fly within 745,000 miles of Earth on Monday, NASA said, the closest a space rock will fly to Earth until 2027

Chicago Cubs Hall of Famer Ernie Banks Dies at 83

Ernie Banks, the Hall of Fame slugger and two-time MVP who always maintained his boundless enthusiasm for baseball despite decades of playing on miserable teams, died Friday night. He was 83

Emma Watson Launches New Anti-Sexism Initiative

Harry Potter star and U.N. Women Global Goodwill Ambassador Emma Watson unveiled the the HeForShe IMPACT initiative, a one-year pilot project geared toward advancing women by working with governments, companies and universities

Ebola Vaccines Get Tested in Liberia

The long-awaited vaccine for Ebola is heading to clinical trials in Liberia. Two vaccines, with the National Institutes of Health’s (NIH) support, will start efficacy testing in Liberia in the beginning of February

SkyMall Files for Bankruptcy

The parent company of in-flight shopping catalog SkyMall has filed for Chapter 11 bankruptcy, citing an increased prevalence of mobile devices on planes as the primary reason for the company’s flagging sales

Apple Store Chief Gets the Big Bucks

How much does Apple care about its retail stores? Enough to pay more than $70 million to the woman heading them up, making her the highest-paid exec at the company. Angela Ahrendts earned $73.4 million in 2014, almost all of it in stock awards

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TIME Economy

See the State With the Cheapest Gas in the U.S.

Gas prices in Missouri plummeted to $1.58 in January

At first look, the collapse in oil prices over the past year, from $107 per barrel in June to below $50 a barrel today, seems like the proverbial free lunch for American consumers. The decline in prices is the equivalent of a $125 billion tax cut. And it’s effectively a progressive one, since the biggest beneficiaries will be working- and middle-class people who spend a disproportionate amount of their income on gas for their cars and heating fuel for their homes. American households with oil heat could save $767 each this winter. That cash can now be spent on a new car—or a washing machine, an electronic gadget, clothes or a few dinners out.

That should boost spending, and …

Read the full story, which appears in the Feb. 2, 2015 issue of TIME, here.

MONEY Autos

So About That Goal of 1 Million Electric Cars by 2015 …

A Tesla Motors Inc. Model S connected to a charger at the Short Hills Mall in Short Hills, New Jersey
Emile Wamsteker—Bloomberg via Getty Images A Tesla Motors Inc. Model S connected to a charger at the Short Hills Mall in Short Hills, New Jersey

In the 2011 State of the Union, President Obama called for 1 million electric plug-in cars to be on American roads by 2015. Well, it's 2015, and we're less than one-third of the way there. What happened?

In Tuesday night’s State of the Union Address, President Obama discussed how “America is number one in oil and gas,” and said that “thanks to lower gas prices and higher fuel standards, the typical family this year should save $750 at the pump.” There was no mention, however, of an automobile-related goal set in the SOTU four years ago, when the president pushed for 1 million electric plug-in vehicles to be purchased by consumers by 2015.

The likely reason for leaving electric cars out of the president’s recent speech is obvious: America is nowhere near reaching that 1 million EV goal. As the Detroit News noted earlier this week, “sales [of electric cars] have been far slower than expected — about 280,000, including 120,000 in 2014,” and that “even with dramatic increases it could take at least four more years to hit the mark.”

It wasn’t supposed to turn out this way. A 2011 Department of Energy report declared the 1 million EV goal “ambitious” and yet “achievable” by 2015, with the help of some conditions:

While it appears that the goal is within reach in terms of production capacity, initial costs and lack of familiarity with the technology could be barriers. For that reason, President Obama has proposed steps to accelerate America’s leadership in electric vehicle deployment, including improvements to existing consumer tax credits, programs to help cities prepare for growing demand for electric vehicles and strong support for research and development.

The report estimated that starting in 2012, GM would be selling 120,000 Chevy Volts annually, and that by 2014, Nissan would be churning out 100,000 plug-in Leafs per year. Even though 2014 was seen as a decent year for the EV market, and quite a good year for the category-leading Leaf, only about 30,000 Leafs sold last year. That was an all-time high, but far short of the goal set a few years beforehand. Meanwhile, consumers bought only 1,490 gas-electric Chevy Volts in December 2014, and fewer than 20,000 in the year as a whole. The fact that Chevy was expected to debut a new Volt in early 2015 is only part of why sales have been anemic.

It’s no sudden surprise that America is coming up way short on the 2015 EV goal. By 2013, Obama and the Energy Department admitted that it wouldn’t happen, even as federal policies promoting EV adoption will run $7.9 billion through 2019, including but not limited to a $7,500 tax credit with each EV purchase.

Among the reasons often cited for lower-than-wished-for EV sales are their limited driving range in between charges and their still high initial costs even after tax credits, as well as vastly improved fuel efficiency in gas-powered cars (even SUVs) and, in recent months, exceptionally cheap gas prices. “The need to transition to electric cars is urgent,” Tesla CEO and EV visionary Elon Musk said in Detroit last week. Based on several years’ worth of sales data, however, consumers apparently aren’t feeling much sense of urgency on the matter.

The 2011 Energy Department report noted that “automobile consumers tend to be risk-averse, preferring well-proven technology,” and that “the performance and cost effectiveness of the early EVs in the market will be a major but unknowable factor in how many EVs are on the road by 2015.” Here we are in 2015, and it sure looks like, by and large, consumers haven’t bought into the cost-effectiveness pitch for EVs, either because they deem the vehicles too pricey, too impractical, or both.

This doesn’t mean that EVs won’t enjoy mainstream success down the road. Gas prices surely aren’t going to stay cheap forever. One former oil industry executive told USA Today that he sees $5 per gallon on the horizon in the near future. At the same time, EVs will keep getting cheaper and more practical for consumers, with the recent introduction of the $30K, 200-mile Chevy Bolt plug-in as a potential game changer in a couple of years. All of which changes the math on the potential purchase of an EV, and makes the prospect of owning one much more cost-effective.

So we’ll get to that 1 million EV goal at some point. It’s just a matter of when—and how much we’ll have to spend to get there.

MONEY Autos

Auto Show’s Most Talked-About Car Is One You Can’t Buy This Year

The Chevrolet Bolt EV concept vehicle
Jose Juarez—Chevrolet The Chevrolet Bolt EV concept vehicle makes its global debut Monday, January 12, 2015 at the Auto Show in Detroit, Michigan.

Probably the most-discussed vehicle at the Detroit Auto Show was the Chevy Bolt, an electric car that can be driven 200 miles on a charge and costs only $30,000. You can't buy one this year, though, or next year either.

The Auto Show kicked off this week with GM’s unveiling of the Chevrolet Bolt, which, despite its “concept car” label is expected to be a reality in the near future—on the market in 2017, most likely. The concept vehicle captured the imagination of many by (theoretically) solving the two big issues that have thus far stopped electric plug-in vehicles from being embraced by the mass market. Today’s plug-ins are either too impractical (driving ranges under 100 miles before the battery needs a charge) or too expensive ($70,000 and up for a Tesla Model S) for the typical household. With a 200-mile range and an asking price anticipated to be around $30,000 (after credits and incentives are factored in), the Bolt has been heralded as a potential mass-market breakthrough.

Here’s what people have been saying about the Bolt:

It’s a game-changer, likely to be a mainstream hit.
“The Bolt EV concept is a game-changing electric vehicle designed for attainability, not exclusivity,” GM CEO Mary Barra said during the model’s unveiling in Detroit this week. “For most people, [the Bolt] can be their everyday drive.”

Some less-biased, non-GM folk seemed to agree that the combination of affordability and expanded driving range before requiring a charge will make the Bolt appealing to the mainstream. “Getting to the 200-mile mark is when you start to see potentially a much wider base of mainstream consumers who aren’t just making short commutes, and don’t just want to be ‘green,'” Kelley Blue Book senior analyst Akshay Anand summed up to the Los Angeles Times. “You are looking at annual sales of 100,000 vehicles,” chimed in John Krafcik of TrueCar.com, a big leap up from the still-niche Nissan Leaf, which at 30,000 units sold in 2014 was America’s best-selling plug-in EV.

Others are more skeptical.
“You have to wonder what the market will be for super-efficient vehicles at a time when oil is around $50 a barrel,” auto industry consultant Jeremy Anwyl said to the Los Angeles Times. The assessment of Wall Street Journal columnist Holman W. Jenkins, Jr., was much rougher, writing that the Bolt is largely the product of automakers being forced by the government to meet fuel-economy mandates down the road, with the result being “cars the public doesn’t want and that can only be sold at a giant loss.”

It’s not very cool looking.
The $70K Tesla Model S became a favorite among auto enthusiasts not because it saves on gas—not only anyway—but because it’s a hot, stylish, high-performance car that’s incredibly fun to drive and show off. The cheaper and more practical Bolt, on the other hand, is expected to drive more like a golf cart, with looks to match. The Associated Press described the bubble-shaped Bolt as looking “like a cross between a Volkswagen Golf and BMW’s electric i3.” “There wasn’t much about it that was fanciful-looking in terms of features and styling,” a Motley Fool post noted.

Tesla doesn’t sound remotely concerned.
Despite headlines presenting the idea that the Bolt would be a “rival” and perhaps “upstage” Elon Musk’s hi-tech plug-in auto brand or even prove to be a “Tesla killer,” Tesla isn’t exactly shaking in its boots. In a released statement that’s the equivalent of a pat on the head of a cute, unthreatening puppy, Musk’s company announced, “Tesla is always supportive of other manufacturers who bring compelling electric vehicles to market … We applaud Chevrolet for introducing the Bolt and are excited to learn more about the product.”

Later, in an Auto Show press conference, Musk said flatly, “I don’t see it as a competitive threat.” The “it” in question is the Bolt, of course. “I’m pleased to see [GM CEO Mary Barra] and GM do it. It seems that [GM] will do something significant with the Bolt, and that’s great.”

Oh, and the name is terrible and might be changed.
Green Car Reports proclaimed that Bolt is a “really terrible name” for Chevy’s new EV. As evidence of the name’s terribleness, the site pointed to quips on social media noting that the name brings to mind the phrase “bucket of bolts,” the unloved old Dodge Colt, and even the 2008 cartoon movie dog named Bolt (voiced by John Travolta). The real problem, however, is that because the letters B and V sound alike when spoken aloud, “Bolt” will be easily confused with its gas-hybrid sister Chevy. “To say that there will be a great deal of confusion at dealerships between the Chevy Bolt and the Chevy Volt would be a gross understatement,” Green Car Reports explained.

The Detroit News reported that while GM likes the idea of linking the electrified Bolt and Volt with names that are alike, the automaker is not committed to keeping it. “The name by itself is very good, but when you put it with Volt you know — is it too confusing for someone? — we’ll find out,” said GM product chief Mark Reuss. “It’s a concept name. End of story.”

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