As China buys more cars, is gasoline power sustainable?

As China buys more cars, is gasoline power sustainable?

A new report from China and the recent run up in gasoline prices should give pause to all those in the automobile industry still confident about the future of gasoline power.

The key bit of information comes from Chinas latest five-year plan which foresees at least 170 million new vehicles on its roads over that time frame as the countrys burgeoning middle class find themselves able to buy a car and all the major automakers in the world prepared to sell them one. That means sales of 30 or more million new vehicles per year added to the 25 million already being sold annually in the U.S. and Europe, not to mention rising sales in South America and the prospect of millions of consumers in India joining in on the act.

Chinas 170 million new car sales in five years is as many cars as there are currently in Germany, France, Spain, Italy and Britain combined. To power those cars takes about 8 million barrels of oil daily, which, according to the U.S. Department of Energy, is about as much as the U.S. imports every day. With gasoline prices across America currently averaging just over $4 per gallon, it is anticipated the increase in demand from China alone will at least double gas prices by 2016.

Automakers believe that gasoline prices at $4 per gallon or more are necessary to sustain and build demand in the U.S. for higher mileage hybrid vehicles and EVs. New vehicle sales figures for the first quarter of 2011 suggest they are correct. Consumers bought more of the alternative fuel models than ever. Further, a new Nielsen Energy Survey indicates that an overwhelming 85% of American consumers now say they would be interested in purchasing a plug-in electric vehicle; either right away (3%), when their current car needs replacement (57%) or when the technology is proven and becomes mainstream (25%).

All the major automakers have already announced plans to expand their hybrid line ups and develop all-electric models. It would appear those plans have arrived in the nick of time.