Prediction: 1 Candidate Will Pledge to Lower Gas to $1 a Gallon & Will Win White House (It’s Doable with PHEVs)
Submitted by EnergyTechStocks.com
With energy polling as the top campaign issue, imagine how much mileage a presidential candidate could get by promising that by the end of his first term in office, millions of Americans will be paying only $1 for a gallon of gasoline.
EnergyTechStocks.com doesn’t know which one it will be, but the prediction here is that either John McCain or Barack Obama will make that pledge and it will carry him all the way to the White House.
Make no mistake: in 2012 the global oil crisis will be worse than it is today. Nearly all U.S. motorists will be stuck paying what by then will likely be $5 or more for a gallon of gas as the world struggles to extract enough oil to keep up with ever-rising demand.
But if recent forecasts are correct, by 2012 as many as three million or more Americans may be paying roughly only about a buck a gallon, and the president will be able to run for reelection claiming that the ultimate “cure” for America’s oil addiction was found on his watch.
That cure is plug-in hybrid electric vehicles (PHEVs). Currently scheduled to hit the market starting in 2009 and 2010, plug-in cars and trucks will “fill up” on electricity from an ordinary electrical outlet. The first generation of PHEVs should be able to go 40 miles or farther on a single charge. For the majority of U.S. motorists who generally drive no more than about 40 to 50 miles per day, electricity costing the equivalent of roughly about $1 a gallon should eliminate most of those nasty trips to the corner service station.
By one estimate, by 2012 nearly three million plug-in hybrid and pure electric vehicles will be sold per year. (See New Lux Research Report: 3 Million Electric Vehicles a Year By 2012; Fuel Cells ‘Return From the Dead’; Li-ion Surges) And this is without taking into consideration the large number of Americans who, according to another recent survey, are ready to spend $54 billion on plug-ins and other types of energy efficient vehicles as soon as the price premium drops to about $1,000 over standard vehicles. (See Americans Ready to Spend $54 Billion on ‘Green’ Cars As Soon as Price Premium Drops to $1,000 - New Survey.)
McCain has proposed a $5,000 tax rebate for PHEV buyers, which by itself probably won’t lower the price premium enough. But combined with expected incentives from states and electric utilities, it should be enough to send millions of Americans in search of a plug-in car or truck. If there also are incentives for converting existing vehicles into plug-ins – which today can cost $10,000 – then the plug-in market will accelerate even faster.
As much as national security officials see PHEVs as a way to eliminate America’s foreign oil addiction, environmentalists see PHEVs as a way to reduce air pollution. Both are right. Add to that the fuel savings of electric vehicles (which will continue to be striking even if, as some experts now predict, U.S. electric rates double over the next five years) and the first candidate who promises buck-a-gallon gasoline through PHEVs will hold a winning economic, environmental and national security hand.
The takeaway for investors is that they need to start keeping a very close eye on automakers’ electric vehicle plans. As a report recently prepared for the Australian government concluded, “The shift towards electric vehicles is likely to happen far faster and earlier than could have been imagined.” EnergyTechStocks.com’s new car chart should help. It appears on our home page under the title, “When’s Your Car Company Going Electric?”
And next week we’ll have a Special Report on a number of companies investors may want to look at closely as they think about how to play the burgeoning electric vehicle sector.
