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First US cities see $1 gas price, still pricier than powering an EV

By: Bradley Berman

Gas stations in Kentucky and Oklahoma became the first cities this week to see pump prices fall below $1 a gallon. Forecasters predict that many regions of the country, starting with the Great Lakes region, will also hit 99 cents a gallon or lower. The drop, due to the coronavirus, brings the price of fuel for combustion cars closer to what EV drivers pay.

What’s happening at gas stations across the country is a sign of things to come when electric vehicles become mainstream. Paul Bingham, head transportation economist at IHS Markit Ltd., told Bloomberg about the drop in demand for gasoline:

You almost can't even give it away. The price elasticity has totally changed. It's full-on demand destruction.

Lower oil and gas prices won’t stop the long-term, industry-wide shift to EVs. The combination of environmental and performance benefits – and falling battery prices ­– make the shift to EVs inevitable. However, the short-term drop in gas prices undermines (but does not eliminate) the dramatically lower cost of an EV’s operations.

The cost of electricity for an EV fluctuates based on many factors. But the general rule of thumb is that electric fuel is about the equivalent of one dollar per gallon. In California, by far the biggest electric-vehicle market in the US, the average price remains stubbornly high at $3.16 a gallon.

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