High gasoline prices are already impacting demand, according to one energy expert.
"Above $4 per gallon, you do see the American public change their driving habits. And we do actively see demand destruction," Regina Mayor, global head of energy at KPMG, told Yahoo Finance Live.
he auto industry has been struggling with a global microchip shortage for almost two years. This has caused widespread supply issues for new vehicles on dealer lots everywhere, and used car prices have been skyrocketing for months on end. But just when prices and availability look as if they're stabilizing, the industry may have yet another hurdle to overcome caused by the Russian invasion of Ukraine.
Ukraine is home to nearly 70 percent of the world's neon gas supply. While this might not immediately seem like a gigantic auto-industry item, this particular inert gas plays a crucial role in the manufacturing of nearly all semiconductors foundries around the world, according to research from TrendForce. And if the supply of neon gas is interrupted, the world may find itself reversing course back to sky-high prices and limited component availability.
How much range do electric vehicles need to appeal to American car buyers? 300 miles? Maybe 400, like GM thinks people want of the 2024 Chevrolet Silverado EV? Well, according to the 2022 Global Automotive Consumer Study from professional services firm Deloitte, even that isn't enough. Instead, Americans expect 518 miles of driving range from battery-powered cars.
Deloitte reached this figure by surveying 927 American "consumers of driving age," whose range demands would today be met only by the 520-mile 2022 Lucid Air. It comes as no surprise, then, that American drivers still overwhelmingly prefer internal combustion power, with 69 percent of respondents stating they want their next vehicles to be fossil-fueled exclusively—not even aided by a hybrid system, which just 22 percent of respondents would consider. Only five percent said they wanted an EV, as opposed to 91 percent sticking with some form of combustion power.