Random research globally asserts that reduced oil prices were harmful to embracing cleaner energy; however, a wave of coronavirus seems actually to aid in ending addiction to fossil fuel very soon.
Due to the current outbreak of coronavirus, Russia, and the Saudi-led Organization of Petroleum Exporting States (OPEC) plan to lower oil production since there is less demand in the market. Russia seems to disagree with this as it experienced a reduction in the oil price since 1991 during the Gulf War.
According to President Donald Trump, affordable oil is competent for those who love purchasing gasoline. However, the side effects are apparent: threatened climatic impacts as the emissions increase in numbers. Reduced oil prices could make combustion easier and reduce taxes charged on the customers. According to a statement issued last Monday, funds stalked for future use on electric cars by Tesla and General Motors could undergo colossal slash.
Short-term stock costs aside, affordable oil will affect the pace of the international market for electric cars slightly. As a result, the market will function on tax inducements, regulations concerning carbon emission, among other state’s interventions. It could favor the side of consumers, as they will save more money on gas.
The prices of batteries reduce by 20% as we enter into every New Year, and this highly favors the cost of electric cars. Since Bloomberg approximated a percentage of 2.4 million sold electric vehicles by the end of this year, it automatically gives the market a new outlook. If they happen to achieve that threshold, then it will be a record in history. The stagnation of cheap and affordable oil costs would result in a new viewpoint of the market.
The outcomes of cheap oil costs are minor as opposed to the impacts posed by a coronavirus. Having no coronavirus outbreak, the sales of electric cars could be more expensive, specifically in China, the largest electric vehicle market across the world.
Many rhetoric questions flood the minds of many people concerning the drop in oil price, its availability and feasibility of funds.
In the second half of this year, there is a possibility of rebounding oil prices. However, no one has the idea of the near fate of oil price entails, as there is a dark cloud of coronavirus. Russia-OPEC tussle seems to take part in double-production as they use up their remaining options to take advantage of risen oil prices.
However, taking part in short term service is just a mere joke, as there is a shadow of terminal fall on the boom-bust series of the industry.