High gas prices could be spark for electric cars

CHICAGO — Not everyone is upset about high gas prices.

For 55-year-old Steve Wojtanek, owner of a Chevrolet Volt hybrid that is getting 123 miles to the gallon, $4 a gallon is the "icing on the cake."

The Florida resident and commercial actor bought his plug-in vehicle four months ago because he wanted to reduce his dependence on foreign oil.

"I just don't want to send my money out of the United States if I can help it," he said.

Each charge costs him about 90 cents and yields more than 40 miles on pure battery power. In comparison, his Lexus costs about $6 to go the same distance.

"I'm very happy. The timing couldn't have been better," Wojtanek said.

Rising gasoline prices could tip the economic equation in favor of an emerging electric vehicle market. But whether those prices remain high long enough to drive consumers to the technology in large numbers remains to be seen. Adoption of plug-ins could also be delayed as makers of traditional vehicles strive to meet higher fuel-efficiency standards. Current standards call for 24.1 miles per gallon for cars and light trucks combined and are mandated to rise to 30 mpg by 2016.

The average price for a gallon of regular gas was $3.985 a gallon Thursday, according to AAA's Daily Fuel Gauge Report. Gas at $5 a gallon is predicted for some areas before the end of summer.

At $5 a gallon, consumers who drive 12,000 miles a year could save an average of $2,257 at Chicago's off-peak electric rates by switching to a pure electric vehicle, according to an analysis released last month by the Environmental Law and Policy Center.

"To the extent that people aren't spending money at the pump, what economists say is that's more money in your pocket, and you're going to spend that on food and money and entertainment and other goods and services," said Howard Learner, president of the Midwest environmental advocacy organization.

The analysis found that if the overall fuel efficiency of Illinois passenger vehicles jumped from the current average of 21.7 miles per gallon to 30 miles per gallon, it would save $6.75 billion for Illinois and create about 72,000 jobs in the state, because more money would flow to Illinois businesses that would otherwise leave the state's economy.

In the short term, oil prices are being driven up by worries about political instability in the Middle East, lost supply from Libya and a longer-than-anticipated nuclear crisis in Japan. Longer-term pressures include increased demand for gasoline from India and China.

While 78 percent of consumers said they would consider purchasing an electric vehicle if fuel prices reached $5 a gallon, according to a recent Deloitte study, their expectations exceed what the auto industry is delivering for vehicle price, range and charging times.

"Their greenness seems to be challenged by their pocketbooks, and what the data is showing us is that, at least right now, the pocketbook wins," said Craig Giffi, vice chairman and U.S. automotive practice leader for Deloitte.

Despite widespread interest in electric vehicles brought on by higher gas prices, Giffi predicted that only 4 percent of the population would buy one. The report found that 68 percent of consumers would be less likely to consider an electric vehicle if they could find a traditional vehicle that yielded 50 miles per gallon.

Other factors are working in the electric vehicle industry's favor, said Deborah Allen Hewitt, a clinical professor of economics and finance at the College of William & Mary's Mason School of Business who studies the auto and gasoline industries.

The recession made people hold on to their old cars longer, Hewitt said, so more people are in the market for a new car. At the same time, $4-a-gallon gas, which seems to be the tipping point for changing consumer behavior, has come at a time when wider rollouts of electric vehicles are expected, she said.

"The key point is whether (gas prices) will stay high long enough to have a significant impact," she said.