Again you make the huge assumption that these 700 million vehicles will be built, further you make the assumption that they will run on gasoline. Lot's of assumptions, just sayin'

Yes people always and for all times buy according to only one factor--price--and always with full information and pure rationality---not.

Just because this is the world depicted in your ideological propaganda...er...intro economics textbook doesn't mean that it has any glimmering relationship to most people's reality.

The explosive growth in organic produce, farmers markets, hybrids...are not primarily driven by price-only thinking by any stretch of the imagination.

EV's have been discussed at length elsewhere, but just for your information and for those who haven't caught those earlier conversations--a significant portion of the current car fleet could be replaced by electric vehicles without the need to build one more power plant. The two main reasons are: 1) They are charged mostly at night when there is large excess capacity, and 2) They are some five times more efficient than even the optimistic efficiency ratings of hybrids, which are some five times more efficient than the average SUV.

And this without any improvement in the grid or supplying available "smart technologies" that charge when energy is available and can draw down a bit of energy from the batteries if the grid needs it. With these simple developments, a large fleet of EVs could greatly stabilize the grid and allow much higher use of intermittent renewable generations such as wind and solar.

Because there may not be an EV on the market right now that fits your particular needs does not mean that millions of people couldn't either get by without a car or use an EV for almost all of their motoring needs. It's not all about you.

Well first lets consider low energy prices.

I posted this concept in other threads I'll recap it here.

First and foremost we don't have a freemarket economy its a command economy just like the Soviet Union just because you don't always see the man behind the current does not mean he is not there. There is absolutely no way the energy industry could predict correctly out into the future what the economic growth rate would be and they need to make plans decades in advance five year at the minimum for a big project.
But if you read all significant fields are at least ten to fifteen years in bring online. This means the growth rate of oil supplies can't respond well to the economy. But in a planned economy no problem you can grow the economy with oil availability being one of the major factors in determining the growth rate. Thus what probably has really happened is the economy was allowed until recently to grow at such a rate to ensure that it did not outpace oil supplies.

The relationship between GDP and oil usage was planned its no accident. Next increasing debt loads were used to drive growth.

Two big lies drove our economic ponzi scheme.

First the Fed and most central banks claimed they did not include volatile energy and food prices in their inflation number I think thats a complete lie they watched overall commodity prices like a hawk. Low raw material prices are critical to getting real growth as you expand the money supply if commodity prices start rising as you inflate then your stuck in a price spiral inflation does no good.

The second big lie was they booked rising housing values as real gains in wealth despite the fact these values were increasingly backed by mortgages with less and less real equity the where treated as real gains. Thus rising housing and land prices and real estate prices in general where never treated is capable of long term decline even though they were really debt. Basically continued financial innovation we accepted as real wealth not a game.

So my guess is that what happened was inflation pressure simply went into housing for decades and not really into commodities and thence into wages (If you can't eat on a given wage you will fight for higher wages). By controlling the growth rate they ensured demand increases where inline with commodity prices.

This game unraveled over time. Relentless inflation in property values is simply unsustainable eventually it went insane. Madoff shows that ponzi schemes can be played for a long time before they unravel but eventually they become unglued. And thats all that was going on as long as inflation resulted in overall increasing home values then the game could continue in the end of course it was insanity.
As it became insane and as commodity supply could not be expanded we got stuck in the situation that we had to continue to pump growth or the whole scheme would come crashing down. The debt bubble took on a life of its own and could no longer be contained at any level.

Overall what we where doing is really placing ever more leverage on future earnings because thats all debt is.

For the US at least we have had no real growth since we peaked in internal oil production. This does not mean that additional real wealth
was not created but per capita we have been in decline for some time.

Now as far as economics goes what can you say it was a game or farce since the 1980's and probably the 1970's. I'd argue the only real growth took place after WWII as most of the rest of the world was reduced to rubble. A lot of that was cold war generated wealth flowing into the military industrial complex not even true manufacturing. But 1950-1960 could easily be picked out as a sort of golden time.
Later in the 1960's deficit spending for Vietnam and the cold war was already causing the economy to become unreal.

http://en.wikipedia.org/wiki/United_States_public_debt

You can see the public debt increasing as we deficit spent during the Vietnam war and cold war.

I don't buy into a lot of the GDP growth starting from say 1965 America was cooking the books seriously this early on.
Eventually we had to drop the gold standard.

http://en.wikipedia.org/wiki/Bretton_Woods_system

The US left the gold standard in 1971 but the books if you will where already fully cooked well before 1971 they had messed with the system to the point it collapsed in 1971. I personally don't buy into a lot of the published economic info from 1965-1971 I think its
fudged to say the least lots of hidden stuff in the government budget.

Now whats interesting is that the short period of time that maps to a period when the economy was fairly uncontrolled i.e as close to a free market as we have had since WWII maps onto a time when oil production was naturally growing rapidly globally.

http://inflationdata.com/inflation/inflation_Rate/Historical_Oil_Prices_...

Oil prices indicate stability from 1948-1965.

Obviously I don't buy into government inflation numbers from 1965-1972 and indeed the gold standard was busted by 1971.
The US economy 1965-1971 was the first post WWII big lie.

Not sure this graph comes through but you can see my interest in 1965.

http://www.measuringworth.org/datasets/usgdp/graph.php

That website is fantastic btw !

I tried to find a smoking gun that was easy to show I can't find something thats obvious.
It may well be hidden in the movement of gold during this time period and some things France did.

My point is that the game has been on for a long time fairly obvious if you look since 1965.

Be careful about the conclusions you draw from a ponzi scheme.

Now of course this whole thing is breaking down so don't expect the future to match the past forty years
and don't expect it to match any past recession in the last 40 years in fact its not clear we have any one period in
the past that can be used as a reliable model for our future.

One thing you can be certain is that inflation, commodity prices and real estate prices are no longer coupled.
They have almost certainly become decoupled. Right now the last vestiges of coupling result in briefly lower
oil prices but both our fiat currencies and ever rising real estate prices are dead.

One would expect that oil prices will eventually seek a real value i.e they will begin to heavily discount
the future value of the fiat currencies. I'm suggesting that commodities will increasingly be sold for money
thats converted to something else fairly quickly. Right US treasuries but maybe gold who knows.
A flight to gold by commodities sellers makes a lot of sense and could happen. Right now US Treasuries
are sensible. But going forward I'd suggest that wealth increasingly held buy countries the US is indebted to will
seek out non-dollar based stores of value of some sort.

But who knows the whole game has changed in other posts I've suggested that we will also see a crisis with the GBP
and that it will be saved but result in the sacrifice of another tradable currency with the Australian dollar a top
unintended casualty. Maybe the Japanese Yen collapses ?

Regardless oil will probably decouple from fiat currencies and may as I said track gold or it could track something else.
No way to tell whats going to happen the past was a lie and the future is unknown.
However the chances of low dollar denominated oil prices remaining for long are slim.