The price of fuel and volatile global economies are major factors that influence the demand for electric scooters. The rise in gas prices has pushed people to switch to electric scooters. Very few people today prefer cars or motorcycles.
The sale of electric scooters increased significantly in Q4 2020, with a 41.6% increase in year-over-year sales compared to Q4 2019. The U.S. saw the largest increase with 35%, while international sales increased by 197%.
In addition, environmental concerns have been increasing around the world. As a result, both public and private transportation systems are using cleaner sources of energy.
Let’s look at a few reasons in detail why the demand for electric scooters has increased over the years.
1. Worldwide Energy Shortage
Fossil fuels are a nonrenewable source of energy, and this is what we’ve been using for thousands of years. It stands to reason that eventually, the supplies are going to run out.
This has had a pronounced effect on total energy from a global perspective. We have a severe shortage of energy that is only getting worse. Consumption has been outpacing production all over the world.
Coal and crude oil stocks are rapidly depleting in many countries. This has a domino effect which results in surges in pricing. This is an upward climbing trend that shows no signs of slowing down. Unless, of course, alternative fuels or electricity is adopted as the standard or become more common.
With improving technology, electric power has become much more viable in recent times. Today’s batteries are much cheaper than before and hold more energy in the same form factor.
2. Price For Crude Oil Is Skyrocketing
Crude oil prices are increasing rapidly, and they might even go higher. OPEC has recently decided to tighten the supply of crude oil in the market. What this means is that oil prices are increasing and don’t appear to ease up.
The reason behind the decision is that OPEC wants to reduce competition in the crude oil market. This can help keep their pricing stable. Many factors contribute to the fluctuating prices of oil, and it comes down to supply and demand.
This problem is further exacerbated through the increased production of ICE vehicles. It is one reason why more countries are adopting electric power going forward. They don’t have to rely on the volatile pricing of already expensive fossil fuels. Stopping the consumption of fossil fuels also improves the quality of the environment.
3. Post-Pandemic Recovery Has Been Slow
The oil and gas industry was struggling from decreasing fuel sales caused by COVID. A major part of the drop was due to supply problems. The closure of several refineries in late 2020 severely reduced U.S. crude oil production. The deficit was more than a billion barrels per day, and so it was difficult to recover.
While there are talks about how they could bounce back before 2024, most of these are permanent. This further puts stress on existing crude oil production, increasing the price even more.
COVID is not the only problem; oil and gas were under pressure even before the pandemic struck. Several countries have plans to fully electrify their automobiles by 2030. This means the industry will slowly phase internal combustion engines out of existence.
4. Unexpected Weather Patterns
Harsh winter has been tough on refineries in 2021. To meet the demand for oil, refineries have been running at higher capacity and have been unable to keep up with other seasonal demands for gasoline and diesel.
As a result, gas prices have surged by about 30 cents a gallon between January and February. The reason is that a lack of available refined products has led to a drawdown of inventories globally. This is clear at terminals that distribute fuel into the pipeline system.
This winter has been really tough on refineries, and they have taken a hit so far this year. The number of days that refineries were forced to reduce their production output rose by nearly 10% in the first quarter compared to last year.
5. Stimulus Checks Increase Spending
Stimulus checks are another factor to consider when it comes to the larger picture. $1.9 trillion is going to be injected into the economy for COVID relief. The unforeseen consequence of this is that it increases the price of gas for the consumer.
It is estimated that this increased wealth could result in additional demand of about 200k barrels of crude oil every day. Since oil and gas production is already struggling with closures and other related issues, this could drive the price up even higher.
The rising prices of gasoline could mean that people have much less money to spend on other essentials. This is a vicious cycle that people can stop with the adoption of electric vehicles.
6. Demand For Gasoline Isn’t Slowing Down
The gasoline demand is not slowing down, and in fact, it’s increasing at a steady rate. The United States Energy Information Administration (EIA) predicts that the demand for gasoline will increase by 1% each year through 2040.
In spite of this steady increase in the need for gas, some trends may cause people to drive less and buy less gas in the future. One trend is an increase in electric vehicles.
In 2017, about 17% of new vehicles bought were E.V.s compared to only 2% ten years ago. As more people switch to E.V.s, that number is likely to increase. But this increase pales in comparison to the number of ICE cars that are bought. 14.3 million ICE vehicles were acquired in the U.S. alone in 2020.