Early in May the owner and operator of the Colonial Pipeline, among the biggest fuel lines in the U.S., was hit by a ransomware attack. The ensuing trouble, which forced the company to shut down the line for five days in May, was well documented. Gas stations in the Southeast quickly ran out of fuel, lines began to form, and fuel prices nationwide moved upward.
In Cox Automotive’s hometown of Atlanta, the problems were immediate and hard to miss. A snapshot research project by our Market Research & Intelligence team found that 58% of consumers in the Southeast witnessed local gas stations running of fuel and 63% observed unusually long lines at the local station; 92% saw higher prices at the pump.
The fuel shortage and higher prices – if only for a week – was good news for electric vehicles. When considering the gas shortage, 50% of consumers indicated they were suddenly more interested in EVs, and 36% were more likely to purchase an EV in the future.
The Colonial Pipeline shutdown was a short spell, but it provided an important reminder for the auto industry: Consumer interest in automobiles is heavily influence by market conditions. It is also fleeting.
In the late 2008, the national price for a gallon of gas rose above $4.00 and consumer demand for fuel efficient transportation skyrocketed. Ford Motor Company, at the time, was busy balancing its vehicle lineup with fuel efficient new vehicles based on their best from Europe — including the compact Focus and subcompact Fiesta. GM launched the popular and efficient Chevy Cruze in 2011 and the small Dodge Dart came out the following year. By 2019, after years of $2 gas, all four models were on the way out, cancelled due to slow sales.
“Consumer interest in EVs is still relatively low in the U.S., but shifting economic factors and conditions, along with an increase in EV offerings, will make EVs more top of mind for consumers moving forward,” noted Vanessa Ton, senior industry intelligence manager at Kelley Blue Book, a Cox Automotive company.
As the attack on the Colonial Pipeline clearly demonstrates, consumer interest can change quickly, particularly when time and money are involved.