Over the last few weeks, oil prices have come crashing down. Consumers are feeling those effects at the pumps. In July, we were faced with record highs of over $4 per gallon. Now, according to the Energy Information Administration, the US average is down to $1.811 -- Americans haven't seen these gas prices in a few years.
The real question is will Americans flock back to the gas guzzling SUVs and trucks? Will this impact alternative vehicle innovation? Will Hummer make a comeback?
Across the board, auto sales have dropped. We continued the 13-month decline as November sales dropped 37%, a 26-year low. General Motors fell 41%, Chrysler fell 47%, even Toyota fell 34%. But suddenly, used SUV prices are seeing a bit of a comeback. Falling gas prices have slowed the demand for hybrid vehicles and smaller cars.
Today, US auto companies, including Ford, Chrysler, and GM, went back to Capitol Hill to rally for emergency loans -- $34 billion of emergency loans. President-elect Barack Obama said on Wednesday that any bailout should be based on "realistic assesments" of the market. It remains to be seen if those realistic assements will include support of electric vehicle technology like the Tesla Roadster and the Chevy Volt.
Despite any economic downturn and desperate attempts for bailout, GM continues to say that plans to roll out the Chevy Volt are still underway. According to Design News, GM spokesman Rob Peterson said "The Volt is the lead program for General Motors...We're moving forward with it and that's not going to change."
Either way, the auto industry is in a pretty bad way; and consumer demand may prove to be more fickle than any environmentalist might hope. Time will tell if the Volt will hit the road or if Tesla Motors will be able to get the Model S off the ground. As Rick Wagoner, GM CEO, said in a Fox News interview, "We're here today because we made mistakes which we're learning from." Time will tell, Rick. Time will tell.