And why did it happen? The EV category is 2 and 4-wheel vehicles. (jump to answer below)
The graph above seemed like a peek into the future, even though it’s a graph of the past.
Meanwhile, in the U.S., oil expenditures for our vehicles have spiked to $2 billion per day. So we have transferred $1.5 trillion of wealth overseas, mostly to OPEC nations, in just the last five years. And that’s just the direct cost… RMI estimates the indirect economic and military costs as double that — an additional $4 billion per day.
It was on my mind as I just read a couple of interesting new SAFE reports on U.S. energy security. The first was Oil and the Trade Deficit:
“In 2011, petroleum products accounted for 58 percent of the total U.S. trade deficit—more than double the percentage just a decade earlier.
Continuous and growing U.S. trade deficits cannot be sustained indefinitely as the collective interest payments on the accumulated debt grow faster than income.
High and volatile oil prices have pushed the cost of petroleum to levels that would have seemed unimaginable just over a decade ago. This has contributed to a rapid expansion of the U.S. trade deficit, rendering the nation increasingly dependent on foreign capital inflows and building up an enormous financial liability to foreign entities. A readjustment of the U.S. trade deficit from current levels is almost certain to be necessary. This process could have a severe negative impact on the U.S. and global economies.
Each day, the United States consumes as much oil as China, Japan, Russia, and Germany combined.
As a result, the United States has run an aggregate deficit in petroleum of more than $1.5 trillion since 2007.
While all of these alternatives offer the possibility of reducing U.S. oil use, vehicle electrification has so far shown the greatest promise for substantial oil displacement
Importantly, the spectrum of electric-drive vehicles offer the most significant, commercially-available improvements in vehicle energy efficiency today.
The nation’s dependence on oil poses a serious and ongoing threat to economic and national security.”
The second report was The New American Oil Boom:
“Measured in terms of the share of GDP dedicated to petroleum spending, the threat of oil dependence is today at its highest level since the early 1980s.
The notion of energy independence is based on a simple idea: that the United States can regain control of its economy and its national security—at least in part—by ending its reliance on foreign oil. As discussed above, this idea has its roots in decades of American political dialogue generated during times of crisis in the global oil market. Unfortunately, this idea is fundamentally misguided and misleading. In fact, the United States has no means by which it can become independent from the global oil market or foreign countries as long as it is a large consumer of oil.
The prominence of transportation demand gives oil the majority of its economic significance in the United States. This is because it is the sector in which it has proven the most difficult to deploy substitutes at scale. Substitutes were most easily deployed in the electric power sector, where petroleum was virtually eliminated as a feedstock in the wake of the 1970s energy crises. Residential oil demand for space heating also proved relatively easy to displace.
90 percent of conventional oil reserves are held by national oil companies whose investment and production decisions are far removed from the free market ideal. Simply put, there is no free market for oil.
In recent months, a number of political commentators have suggested that, as the United States produces more oil domestically, it will achieve sharply lower prices in much the same way that natural gas prices have fallen during the surge in U.S. shale gas production. This simply is not credible. While the United States does have a large degree of autonomy in natural gas pricing, this is because the oil and natural gas markets are vastly different: there is no global market for gas.
Fuel efficiency is not enough on its own. The long-term goal of energy security policy must be to break the petroleum’s stranglehold on the transportation sector.
Over the long term, the United States can achieve meaningful energy security by transitioning away from liquid fuels in the transportation sector.”
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