Electric car industry to suffer from low oil prices, says Tesla

Tesla CEO Elon Musk has weighed in on the discussion regarding cheap gas and electric vehicles (EVs), voicing concerns that the electric-car industry will suffer from low oil prices.

Statistics have shown that consistently low oil prices caused SUV sales to rise in 2015, while fuel-economy gains stalled, remaining relatively stable.

Nonetheless, Musk claimed Tesla’s luxury electric cars had avoided the trend, speculating this was perhaps due to wealthy buyers being less concerned by fuel costs. Musk also added that despite the declining cost of oil prices, Tesla was pushing on with its lower-priced Model 3, set to be unveiled in March.

The release is part of Tesla’s aim to produce 500,000 electric cars annually by 2020.

Musk said: “Even if the economics of oil favour petrol, I still think the Model 3 does well.”

He argued that the real issue is when ‘there is little to no differentiation between the petrol version of something and the electric version’.

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