Gas prices, low car inventory make for 'perfect storm' of uncertainty

FOX 2 - It feels like we're just scratching the surface of the toll rising gas prices are taking on the U.S.

From everyday use to delivery drivers and the potential impact on services like Meals on Wheels. There is also wide-ranging effects on the automakers - including the Big 3.

"They're kind of on a yo-yo where they're constantly being asked, 'You need to deliver us vehicles that have higher fuel economy. Then, when the price of oil goes down, then people want larger vehicles again. It's been a real challenge for the American automakers," said Dr. Michael Greiner, assistant professor of management, Oakland University.

Remember the Hummer?  The big-bodied SUV was the "it" car in the 2000s. In 2006, Hummer's sales growth skyrocketed 235 percent. Then, in 2009, a year after the financial crisis - annual sales dropped 55 percent and never recovered.

"In the past, gas prices would go up, I remember distinctly 2008 - gas prices would go up, people wanted to get rid of their full-size sport-utility vehicles that guzzled gas, and they wanted to look at hybrids," said Michelle Krebs, Cox Automotive. "We didn't have EVs (Electric Vehicles) then. But that trend only lasted a few months."

Krebs, an automotive executive analyst says don't expect to see that trend now. Times are different.  The issue today is historically high gas prices, a chip shortage, and low car inventory are a perfect storm of uncertainty.

"The problem right now is, there is just not a lot of availability of any kind of vehicle," Krebs said. "If you want to switch to an EV or hybrid, there aren't very many of them available."

Electric cars are making more of an imprint everywhere - from Super Bowl commercials to the workplace. EV sales have jumped since the fourth quarter of 2020, but right now, it's tough to say whether that's due to growth or high gas prices.