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With the average price of gasoline edging over the $5-mark on Monday, up 63% from a year ago, according to EIA data, and having gone over the $4.20-mark for the first time ever in mid-March, people are already driving less, and households are prioritizing their most fuel-efficient vehicle. Buying patterns are already changing in favor of smaller fuel-efficient vehicles, hybrids, and EVs, except they’re sold out, while pickups and large SUV have started to accumulate on dealer lots.
Gasoline demand destruction has already set in. In October, November, and December last year, gasoline consumption ran above the levels of the same period three years earlier, in 2018. In the first half this year, for every week, consumption has been lower than in the first half of 2019, the last year before the pandemic shifted everything around.
The EIA measures gasoline consumption in terms of barrels supplied to the market by refiners, blenders, etc., and not by retail sales at gas stations.
Gasoline prices started rising in 2020, hit multi-year highs in May 2021, and continued rising. Then in 2022, prices started spiking…
…and apparently hit the magic number somewhere along the line, and suddenly gasoline consumption started dropping well below the same weeks in 2019, on a four-week moving-average basis.
Summer driving season has begun in the US, and gasoline consumption this year has been rising, but more slowly than in 2019.
The red line in the chart below spans the period from June 2021 through June 2022. The gray line spans the same weeks in 2018 and 2019. Note how in June through December 2021, consumption tracked fairly closely the consumption in the same period three years earlier, in 2018.
In the week ended June 10, consumption amounted to 9.02 million barrels per day (four-week moving average), down by 5.4% from the same week in 2019:
What everyone now wants to know is this: When will demand destruction be large enough to cause a decline in gasoline prices?
It’s complicated by large-scale exports of gasoline by the US to other countries, currently running at over 900,000 barrels per day, which amounts to roughly 10% of US domestic consumption.
Even if consumption in the US continues to decline compared to 2019, foreign demand – higher exports – could make up for it. So we don’t want to get our hopes up that domestic demand destruction by aggrieved and frustrated US drivers alone can put a lid on the price increases.
But if demand destruction in the US is substantial enough and sustained, and supported by demand destruction in other countries, there could finally be an impact.
Exports are very seasonal, usually peaking over the winter when there is less demand in the US, and then dropping sharply over the spring and summer when demand peaks in the US. But this year, over the past three months, exports have been 20% to 40% higher than in the same period last year, right into driving season:
Long-term, gasoline demand in the US is already on the way down. But it’s going to be a slow process. The current consumption level of 9.02 million barrels per day was first hit in July 2000. Gasoline consumption on an annual basis peaked in 2007, and declined for years, then rose again and matched that level again in 2016, 2017, 2018, and 2019.
The higher prices and the shifts by consumers to purchasing smaller vehicles, hybrids, and EVs (including big EVs, such as pickups) now underway will see to it that gasoline consumption going forward is on the decline in the US.
But wait… the industry is already preparing for it. The no-growth nature of gasoline demand in the US isn’t new. Investment in refineries has been put on the back burner, and numerous oil industry executives have pointed that out. The entire industry is striving to keep supply tight to manage the decline in gasoline consumption over the decades and maximize profits during it.
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I was driving on Freeway 405 in south Orange County CA a few hours ago, and it felt like early pandemic levels of traffic. Definitely way below “normal”. Interestingly, the city streets are still packed, which I interpret as still a lot of activity, but people are trying to stay really close to home.
I’m off the 101 freeway in Ventura County. I haven’t noticed a change yet… but you got me hoping!!
Main street is back, baby. Let’s support local!
But yes, I’ve noticed less traffic as well. Local gas station is down to $5.89/gal after peaking at $5.94/gal. So we get a nickel discount after about a $4 increase, and it would show as deflation. LOL.
In Charleston County SC, all the side roads and neighborhood roads are quiet by 6:15 after everyone has completed their errands on the way home from work. Big difference from last year at this time.
I live in vacation-ville and it is notable the lack of RV traffic on the local hiways and byways.
I drive a lot for work (with a company car thank god) and high gas prices have been a God send for me. Traffic has been so much better recently.
My man. Don’t you love driving your Tesla to a gas station, getting some Starbucks, and mocking other drivers. And soon empty streets, just like that WEF ad.
“When will demand destruction be large enough to cause a decline in ______ prices?”
It seems like that’s the trillion dollar question in so many areas of the economy.
Won’t happen why sell petroleum products in USA ,when Europe will pay 2-3 times as much . Simple economics
It could happen if people put a concerted effort into fighting back and protesting etc. But probably won’t happen unless prices go even higher.
I doubt it. As soon as demand lightens, refineries will be taken offline.
Assembling the data for the graphs from hither and yon takes time and effort and some these graphs seem new to me…so they required significantly more work.
Re the Refineries – Biden’s villain du jour, although he seems to prefer keeping his patsy options open by more often merely referring to “oil producers”.
But the truth is, there are few industries in the US that have been complaining louder or longer (decades) about intentional regulatory strangulation.
There hasn’t been an entirely new, significant greenfield refinery in a long, long, long time (1976). That has been known for many, many years before now.
But now, after having been treated like absolute dirt by DC, the refiners are politically attacked for not producing more.
Republicans commonly exaggerate the impact of regulations on production…but in the case of refineries, there isn’t much room to argue about the fact of intentional regulatory strangulation.
Complaints about it were widespread way, way, way before the pandemic.
And, as actual reality has shown, the widely heralded green replacements proved themselves far, far from ready for primetime.
“there isn’t much room to argue about the fact of intentional regulatory strangulation.”
What regulatory strangulation? The fossil fuel industry gets $5 Trillion a year in subsidies and has captive markets all over the planet.
Can’t improve or properly maintain refineries due to environmental or other regulations, sometimes even from the local township? You can sudsidize the hell out of someone, but if you don’t let them do the job you are paying them for they will decay into forced incompetence, cf Boeing.
You have no evidence of refineries not maintained due to environmental regulations. You’re just making it up because your sponsors hate having to clean up their messes.
Boeing cut corners to increase profits. Their incompetence was self-inflicted. Things were different when engineers made the engineering decisions, and not the MBAs.
“All the real talent gets siphoned off into the Arts and Sciences, and that leaves the DREGS to put it all together”
-Bucky Fuller…….sometime during the 60’s
Name two regulations that don’t make sense.
No they don’t. That is complete unadulterated BS and is besides the point which is about regulatory strangulation.
Google it up yourself. Fossil Fuel Subsidies – International Monetary Fund Globally, fossil fuel subsidies are were $5.9 trillion or 6.8 percent of GDP in 2020
You have no evidence of ‘regulatory strangulation’. Whining prattle doesn’t constitute evidence.
5….trillion? In one year?Where does that money come from and where does it go? Hate to think what price per Fallon would be without it
6.8% of GDP in 2020? GDP 86 trillion? Is that world GDP?
High interest rates, falling demand and prediction for lower demand in the future. If demand destruction does result in lower prices, I expect that to be temporarily. Probably more so than the feds temporarily high inflation as cuts in investments in future production will shift balance between supply and demand back in favour of the oil producers and refineries
Inflation is running red hot but in the long term I see deflation as a threat unless everyone becomes millionaire.
It hasn’t even started yet housing,cars food gas still at all time highs . But bet your ass Wall Street is getting out first .BAGHOLDERS
Deflation?….or a retracement of an inflation spike. Different animals. Who has ever seen deflation? Just look at a chart of the purchasing power of the dollar……
That’s called a deflating dollar hahaha
Demand destruction is just another way of saying making more people poor and poorer.
Deflation (which will never happen) is the only hope for the financially prudent to recover from their losses incurred over the past decade-and-a-half).
I am sadly feeling that.
I remember con men like Chamath Palihapitiya talking about deflation being the main thing to worry about back in late 2020. I think it’s as ridiculous a proposition now as it was then.
I never thought $3 gas would feel good until now.
Last time I filled up it was $3.45 for Premium. Full tank was like $60. Insanity. So yes, $3 sounds pretty good.
So YTD, the average demand destruction of gasoline is somewhere between 4-5%, and it’s been dropping since mid-April. This is NOT any sort of forward looking indicator of real demand destruction, something approaching 10%.
As such, the price of gasoline only has one direction to move over the near-term 6-9 months, meaning increasingly higher inflation which will peak between September & the end of the year.
And may I point something out? Why doesn’t ANYONE in any sort of press give any measure of attention to the amount of aggregate demand that’s being created by the 1M+ undocumented immigrants who’ve arrived in the US since 1/20/2021? Certainly, the politics of this can be addressed elsewhere. I’m just talking about the economics of it all. That’s a lot of new mouths to feed, housing to provide, gasoline for cars, healthcare etc. I mean nobody wants to even entertain this as a modest X factor for maintaining higher inflation than anyone thinks possible. And multiply this by 4x and what have you got?
You’ve got an ENORMOUS amount of demand that wouldn’t be in the US economy otherwise. And it seems to be taboo to discuss or maybe I’m just overestimating its effect on inflation.
Yes, but m,any of them work for lower wages and benefits. Deflationary. As was the addition of cheap labor in China.
Heh heh, yeah – but it’s so easy to blame desperate hard-working people for American self-indulgent consumer entitlement, achieved through militaristic chauvinism and raping the rest of the world to feed its crass materialism.
You really know how to go off topic don’t you?
Gratuitous screed randomly blaming undocumented immigrants for inflation is what was going off-topic.
The article was about demand destruction in gasoline. But some people can’t resist a little bit of unrelated talking-point mental masturbation ranting about undocumented immigrants.
As you said, the market for oil is more foreign than domestic. Is it safe to say big US oil is capitalizing on the foreign oil market? And also when the president released oil reserves onto the market, I heard that a portion of the reserve went to the EU. Anyway, what I’m trying to say is when Trump filled the reserves with negative oil, and now Biden is releasing reserves for a price….I bet America made some good money. Trump bought the dip and Biden sold the hip. They are good market timers if I’m correct. :)
This reminds me, indirectly, of Fed Chair Benjamin Strong in the 1920’s keeping credit too loose too long (in the USA but internationally), to help his pal Montagu Norman, and the Bank of England, thus the UK, out of the latter’s deflationary problems. That had come from Churchill in his then-post in UK government (exchequer I think), clinging too tightly to gold, which was ravaging the standard of living of workers. The result of the loose-long credit (once 1920s innovations were wearing off and financialization shenanigans set in, flagrant overselling of shaky Wall Street inovations) was a little thing called the Crash, followed by Great Depression. Oh, and the greed of investors played right into the “go go” times.
Gasoline cost is Now the ” common denominator “of the prices of everything Else !. Next may be Electricity anything connected to make the world go round. Best workaround is to be filthy Rich ! Like J. Powell then problems are solved and cost make no difference
Without ENERGY, there is NO economy!
True, for every unit of GDP equals one unit of energy. If not, then fraud abounds.
Jerome Powell is a person of very modest means and is paid less than $200,000 for his services each year to the Federal Reserve.
Hahahahahaha…”very modest means” hahahaha, that’s a good one. Based on filings, his net worth is estimated to be $20 million – $55 million. “Very modest?” Do we already have that much inflation?
I have seen estimates as high as $80 million, though it’s hard to know what the truth is. That being said, I’d bet his own policies have increased his net worth by 8 figures, easy. He could pay $100 per gallon and never even bat an eye.
If Powell’s worth is a required disclosure and he can’t get within 3-5% of his assets, that explains his shitty management of the economy.
If you have a few million $ (or more) and know exactly when/how to trade the Fed’s moves (b/c you are the Fed!), you don’t need a salary…
If he survives the revolution,which I believe is imminent,people in the trenches are pissed
Interesting side note. Truckers are pretty much at the mercy of truck stops. Hard or impossible to maneuver big rigs in small stations. Many, many truckers are taking extra risks to save on fuel. Some buy stolen fuel, untaxed fuel. Some even use containers not made for fuel, buying at cheaper legitimate stations. Caught between a rock and a hard place. I understand why.
There is zero excuse for any such criminal activity.
Oh, I agree with that. It is a big problem that I deal with a lot. I was just stating the fact that it goes on. Also very dangerous to deal with. Fuel thieves are serious, therefore dangerous. I know.
How do you know it’s stolen?
Higher prices, produce less for greater profits.
That’s why they used to have antitrust laws.
I predict record breaking bonuses for petro officers coming up, while consumers take it up the *SS even deeper.
George Carlin’s big red, white and blue d*ck up America’s….
For a different perspective, read Chevron’s recent letter to Biden.
Chevron’s CEO is precisely one of the guys I was referring to when I said oil companies are not investing in refineries because US gasoline consumption is declining, and they want to manage that decline and keep prices high. He said that.
Was he pumping his own gas into his 15 YO Civic when he made that statement?
True, without laws passed by Congress that would prevent executive orders that interfere with development in the oil arena, the days of refinery developments are over.
RTGDFA: demand for gasoline is declining — peaked in 2007, and matched that peak in 2016-2019, and is now falling off a cliff. Why would you need more production when demand is falling???
The only thing that is increasing in terms of gasoline is EXPORTS.
Who in their right mind would invest 10 billion dollars in a new oil refinery when the government is telling you, that you are the enemy and that they are going to put you out of business?
Stupid decisions have stupid consequences.
But hey, why worry about it? According to Al Gore we are all dead now anyway.
What if the hypothetical new refinery made gasoline at lesser cost than currently existing refineries? And/or could be built to refine oil into products besides gasoline? Never no mind if those existent refineries started falling apart on account of age.
I read the article, but how can you tell if demand is declining or supply is declining? Wouldn’t both look the same on your graph?
I read an article last week (on your favorite site: zerohedge) where OPEC+ is actually having trouble increasing demand.
Yes, gasoline consumption declined due to increasing prices! Wonder why? How about stop exporting 25% of our products for company greed, instead of the normal 5% leading up to the start of decreased consumption and increasing price. We could always use a Presidential order to stop this. Who needs refineries with the latest technologies anyway. Where’s that green oil when you need it.
Actually, I think high gas prices also hurt your local station. Many are closing the pumps down late at night because of fuel theft. I know my regular station is doing just that because it happened to them. They also told me that the sales inside the store have dropped during regular business hours. Might just be a coincidence.
In my neck of the woods, you either use a credit card or walk in and hand them cash.
Fake credit cards could be a thing if they still allow non chip cards.
They park a van on top of the main tank and siphon gas out of the ground. No pump necessary. It’s been all over the news.
Harrold,…………….Yes, if the station is open you could give them cash. If the pumps were turned on, you could use a card.
“I think high gas prices also hurt your local station.”
Marbles, I think high prices are going to hurt other retailers. A lot of people have to buy regardless of the price, e.g. commuters, and the extra money they have to pay for high-priced gas is money not spent elsewhere.
Makes sense to me anyway.
Maybe the government should shift some of the oil production subsidies to refinery subsidies. Also send the justice department to probe any antitrust schenagins.
Because I am getting tired of being told gas is still high because of insufficient refineries and/or all the refineries unexpectedly going into maintenance at the same time.
Tired? Call your elected representative. See if they give a hoot.
Wolf, how do you never mention climate catastrophe in these gasoline-focused articles? We need total demand destruction – total replacement by electric. Increased, or even just constant, use of gasoline will render our world increasingly uninhabitable.
It took a while to switch from horse and buggy to the automobile, and we didn’t even have to shoot the horses. Slow down a little, we’ll get there.
Time is a luxury we don’t have. We’ve mostly wasted the last 30+ years.
And I nominate Americans for having wasted more fuel (and linked resources) on empty, absurd vanity than anyone in the history of humankind. It is still startling to watch this absolute nihilism having been normalized, on every block in the country.
A friend of my father joined the horse cavalry right after the first world war. When they transitioned to armor… the entire regiment rode out with a bridle, saddle blanket and a 45. Each man shot his horse in the head and then they marched back to the barracks.
There were a lot of drunks in the barracks for the next few months.
Yep, just think on how both Obama and Al Gore both bought beach front houses because they know most of the climate catastrophe info is a load of crap.They both did a, do as I say but not what I do moment….
Saying that, when the Vikings called Greenland, Greenland, in the year 980 because there was much less snow than now and decided not to call it Whiteland, I guess it was because they were all driving big SUVs, which was very naughty of them. History can be a bitch………..
You say – ” the climate catastrophe info is a load of crap”
I say that’s hilarious.
You say – “Greenland, in the year 980 because there was much less snow than now”
I say that’s hilarious.
Your fox news update and talking points lack reality!
Why is there never any data on greenland? It’s a really big country and not that far north. Why is it all blocked out on google earth?
To give the average person perspective on the rest of the world on a flat plane…
Google up different map types ( there are a ton) and you’ll see Greenland displayed different ways…
Azimuthal equidistant live weather maps are weird.
Does electric actually benefit the environment or does it just shift the problem to a murkier realm, a few notches more distantly removed from the obvious problems of fossil fuel? Where does electricity come from? Rubbing inflated balloons against billions of heads?
As long as you put a filthy lithium strip mine in Africa where child labor toils, and black smoke-belching diesel earthmovers rape the land where no virtue-signaling soy bois have to look at it, s’all good.
Electricity comes from about 75% coal and hydrocarbons.
Just get rid of half the population of the US, and you can be the first volunteer!
I’m sure some of these green geniuses have looked into harvesting humans for food. Tastes like chikin’.
It’s not a binary, where one side is simply right, and the other all wrong. But many pin-sized crania want to wish that anything in the world was that simple. And that it could be folded into one example. Clue: that is a brain defect, it is housed in the skull: the need to feel smart therefore powerful, far beyond the capacity of the tiny brain chip. Total delusion, outside of occasional sheer luck being right. Having legions of suckers like that is how the spectacularly powerful get there.
Covid was supposed to take care of population control = don’t have to pay for old sick people in nursing homes
MarMar – The problem is that the transition needs to be managed well. There is limited capacity of BEV manufacturing for the US. We lag way behind Europe and China. It will take a decade to transition all cars.
Instead of giving tax breaks for BEV purchases to consumers, why dont we set much higher fuel economy standards and then stop the practice of allowing companies to buy credits so they can continue to sell ICE cars? More stick, less carrot.
We need to tell car companies that if they dont transition to electric, they will be out of business -fast.
And one other thing. High gas prices make energy companies rich. Is that who we want to reward? Really? It would be much better policy to force oil producers to pump their oil reserves now, or lose it. That will increase production, but drive down prices. Then we add a gas tax that is used to transition the electric grid to higher levels of renewable energy. Because a Tesla that is powered by dirty electric generation is no better than an ICE car (there is a study that proves this).
The government policies and spending on clean energy are mainly a boondoggle for companies to get rich. In China, they restrict registrations for vehicles that are not BEV. That works real well because you either make BEVs or you do out of business. Fear is a better motivator than greed. And it doesnt increase the Federal deficit.
STOP DRIVING IMMEDIATELY. NEVER DRIVE AGAIN. NEVER FLY AGAIN. NEVER SIT ANYONE ELSE’S CAR AGAIN. Walk or ride your bicycle. Because YOU are the demand that is screwing up the climate.
YOU are in charge of demand destruction. As long as YOU are being moved around by something that burns fuel, YOU are the demand. And where there is demand, there HAS to by supply, or else the whole system blows up. But YOU and all YOUR buddies can stop generating demand — don’t be transported by anything with a motor in it — then supply can back off, and it will.
Cutting off supply, while demand is still there, will just make a bunch of oil industry investors rich.
Why is this so hard to understand?
Next time you fly anywhere or drive anywhere, swear up and down that you will never ever complain to OTHERS about the “climate catastrophe” because YOU are responsible for it. Do some serious navel gazing instead.
“YOU are the demand that is screwing up the climate.”
The Bentley runs on hydrogen. I don’t like to bring it up because people think I’m gloating. The companies that do conversions tend to go bankrupt so if you do it yourself it’s basically from a personal need to screw the oil companies.
“Do some serious navel gazing”
Last time I did that I fell in and didn’t reappear for six weeks.
Self -reflection doesn’t help me because I just end up with clever rationalizations for my bad behavior.
I don’t fly and when I drive (rarely) I usually use an EV, FWIW.
But regardless – it’s weird for you to yell at me for asking you to simply mention the very bad effect of the lack of demand destruction.
It is not a binary. Voluntary lowering of demand is the best risk management from all perspectives. I haven’t flown in 25 years. I drive little enough that my carbon footprint is negligible. I am a productive contributing member of modern society. Managing ourselves ethically is our only hope. Otherwise this or some other technology will eat us alive. It can totally be done right, consistent with a good standard of living, and individual choice, indeed a much nicer place for most folks to live. You’re welcome.
The yelling on behalf of a specific lifestyle is faith-based. Just because a set of technologies came into being doesn’t mean we all have to heedlessly waste them in some smooth lockstep forever, with zero inconvenience.
How about Kantian ethics: if everyone did a given behavior, would things be OK? Or screwed up? Has neoliberal capitalism eaten your critical brain that badly?
The average gasoline price chart above shows very clearly that the parabolic price surge has occurred since late Feb. 2022,which happens to be when the sanctions on Russia were imposed. Those sanctions removed from the European market a significant amount of supply of gasoline and diesel fuel among other things. By trying to partially alleviate Europe’s supply shortfall the US government is producing a supply shortfall and inflationary spike in the US. This is clearly a direct result the abrupt supply destruction of prior imports from Russia and Ukraine and all the bulls–t about how the US and others van replace it has been proven false. Demand destruction is a euphemism. Its a destruction of middle class wealth in an amount sufficient to make enough of the class feel too poor to afford to buy things. Since a truce us unthinkable, that is the chosen remedy.
1,000,000 up votes to Wolf. Completely agree. Be the change you are advocating by changing your behavior.
I hate to tell you MarMar but it’s way too late to do anything about it because the positive reinforcing feedback loops have already been triggered. You and everybody here should just calm down and enjoy what little time we have to the best of our abilities.
Don’t worry. People will always find ways to eventually make the world uninhabitable. They’ve been working at it for thousands of years, and it will eventually pay off. There is no such thing as a world that does not contain a majority interest of control by bad actors. I promise you, the world will be dead before the population reaches a trillion humans. Make it two trillion to be conservative if you believe in unicorns.
Each electric vehicle contains about 400 pounds more aluminum and about 150 pounds more copper than a conventional car Lithium—now well-known because of car and grid batteries—has seen prices soar nearly 1,000% in the past two years. Prices of copper and nickel, more widely used, are up 200% and 300% respectively over the same period. Aluminum, the second-most-used metal on earth after iron ore, is up 200% and trading at a 30-year high Less than 1% of all cars on global roads are battery-electric. ING determined in late 2021 that a double-down on electric-vehicle goals would alone soak up about half of all current aluminum and copper production and about 80% of global nickel output.
Electric cars exist and they are useful for getting groceries and coffee around town if you own a place to charge it but their overall utility compared to ICE is largely a fantasy. Hybrids make sense. Trains and ships have been hybrids since forever. Try pulling some serious weight with an all electric ford pickup. You’ll get about 90 miles range.
Don’t get me wrong, I love smalll light electric vehicles, especially electric bikes, but the idea that they will one day replace ICE is a comical pipe dream. And no one in a Tesla ever waves at me in my 69 Impala. So screw those poseurs.
Now that I think about it, no one in a Tesla seems to drive with the windows down. Probably the covid.
While I’m at it, B pillars should be banned. The best looking cars have no B pillar.
We need some laws to improve the aesthetic of modern vehicles because all these cookie cutter shoe shaped media mobiles are visual pollution and I’m offended.
They keep the windows rolled up because they don’t want to smell your leaded gasoline.
I wish, Maybe they are afraid of my zinc additive everywhere they go.
All being hoarded and manipulated by chinese
Mar Mar To match the 2,000 cars that a typical filling station can service in a busy 12 hours, an EV charging station would require 600, 50-watt chargers at an estimated cost of $24 million and a supply of 30 megawatts of power from the grid. That is enough to power 20,000 homes The average used EV will need a new battery before an owner can sell it, pricing them well above used internal combustion cars. The average age of an American car on the road is 12 years. A 12-year-old EV will be on its third battery. A Tesla battery typically costs $10,000 so there will not be many 12-year-old EVs on the road. Good luck trying to sell your used green electric car! Imagine a Hurricane evacuation in FL….will all the EVs get as far as Jacksonville and then try to ALL RECHARGE somehow?
“an EV charging station would require 600, 50-watt chargers at an estimated cost of $24 million”
I think maybe you mean 500W or something, which would be 300KW. I have a 350W inverter in my trunk. It ain’t gonna charge 7 teslas.
300KW of electrical capacity does not cost $24 million, maybe 4-6% of that. I’ve built a 300KW facility. So, if it cost, say, a million per 300KW continuous load that’d be 600 million dollars for 600 300KW charging stations and I don’t think even that would be enough. I bet there are 300 gas stations just in Portland metro alone.
Either way it’s infeasible to charge cars as efficiently as dispensing gas. The time involved and the non comparable energy densities of gas vs a battery makes universal EVs a form of political psychosis.
I bet we could design a system of swappable battery packs. Pull in, a robot arm swaps out your used battery with a fresh one, and you are on your way. You pay a fee like at a gas station. The used battery goes into the charger.
You’d need a standardized battery system across all manufacturers. But we do it with other parts, we could do it with batteries.
elbowwilham, EV batteries are not like the batteries in your flashlight. EV batteries are heavy (2,000+ pounds), they have a dedicated liquid cooling system built into the frame of the 9,000 small batteries that are wired together. Plus, the battery has an electrical interface connected to the controller/inverter and the charge port. Not something that is swapped out quickly or safely for that matter.
Then, there would be the ownership issue since the car and battery were bought and titles as a unit.
Then, swapped out batteries would need a special charging and inventory station and a vehicle or other means of moving these one ton plus fragile battery systems around and to somehow store them.
Plus toxic battery disposal,might be possible in 20 years to engineer battery’s = alien technology
My Suburban runs on discarded oil from McDonalds. I keep it idling while I’m in Costco. Doing my part to keep the landscape grease free. Cheers.
Wolf Street and residents aren’t really big on talking about climate change except as it impacts the economy, which is logical, since it is an economics site, and also fine, as not everywhere has to be everything to everyone.
And honestly, it is a bit rude to show up somewhere and demand to know why your host isn’t talking about the stuff you want to talk about.
“Investment in refineries has been put on the back burner”… I think the last new refinery in the US was in the 70s? Meanwhile the Chinese have built refineries, and supposedly Chinese “Independent refiners operated at less than half their capacity in April”…
Look at the demand for gasoline in the US — chart above. Then find a chart for gasoline consumption in China. Even in the 1996, my first time in China, there were hardly any cars on the road in China. I mean, what roads. Now these huge new expressways have turned into parking lots.
So, runaway demand. Some destruction of that is good, right?
China gets all the oil it wants from Russia now!
Supposedly the Chinese could refine more and export it (diesel in particular?), but they’re not. If that’s true I’m not sure why they wouldn’t refine and export, given current refining margins. Thanks for your articles. Must reads!
I don’t know about refining, but as for exporting, if I were them, I’d be building up their strategic reserve for the future shooting hot war.
I wouldn’t increase exports just to obtain more fiat USD. Why do they need any more of that?
I have 2 cars: both EVs. Now I am trying to get rid of my second EV and sustain myself on ebike . Charging is all free for me.
It’s a dream for me.
With the way the battery packs mount on the bottom of cars, I think it’s fairly easy to drop them off? They are heavy and stuff, but I wonder if it will become a thing to steal the EV batteries like it’s a thing to steal catalytic converters.
You can’t remove them with a sawzall. There are coolant tubes and connections that are fragile if you have any intent on using the battery pack as a whole. For cells, maybe – but you have to dismantle both high voltage packs to do so.
Not a place for amateurs. Snoop around “electrified garage” for a sampling of what is involved.
The batteries weigh so much that interchangeable batteries are an impossibility. And if the industry increased the energy density, well, then, Shazaam, you have an even more explosive energy storage than current batteries.
These cars weigh a lot too. Essentially all pproduction Teslas weigh more than my old 69 Impala. Some weigh more than half a ton more. GVWR on Impala is 3800 lbs. Who’s paying for that road maintenance?
5,390 lbs – Model X Plaid 5,185 lbs – Model X Long Range 4,766 lbs – Model S Plaid 4,561 lbs – Model S Long Range 4,416 lbs – Model Y Long Range/Performance 4,065 lbs – Model 3 Long Range/Performance 3,582 lbs – Model 3 Standard Range Plus 2,723 lbs Gen. 1 Tesla Roadster
It’s a dream till the batteries need to be replaced.
I have nothing against EVs. They make sense. My issue is that I am a diy-er –I have the tools and skills to do most of my own repairs on ICE cars. I don’t know how many of those skills transfer to EVs, or even if that’s allowed.
I read that EV manufacturers do not want owners to fix their own automobiles. A conundrum…
Nice virtue signaling, jon. Do you also not bathe? Water is precious you know.
10 year Bond yields quietly dumped in 2 days from 3.5 to 3.19 now…
Imagine that,ppt probably sobered up to reality of government interest payments going to 1 trillion a year ,keep working harder get less.
until the next inflation rate report next month. Expected to be more around 9% or even higher until September. B/c of expected lag in rising rate the inflation response will be 6 to 12 months. it was more than 18 months under Volcker in ’80s.
I was on the freeway between Sheboygan and Manitowoc on Monday. Traffic seemed normal for a weekday, but a lot of tractor-trailers.
Going off on a tangent here, I passed two dealer parking lots that were packed with brand new travel trailers, the sort where you need an enormous pick up truck to pull. It looked like standing room only in the lots (but no people present).
Just to let you know, in this crazy world, The UK is exporting Gasolene to the USA as it’s more profitable after taxes….
Fossil fuel markets are routinely gamed on a global scale. It’s more profitable that way, and they can always pay most politicians to complain about something other than industrialized corporate profiteering.
On a side note, more than demand Natural gas will be spiking, slowly, throughout the year, unless there is short term end to the Ukraine war. Inflation news has side lined the Zelensky ‘show’
Natural gas (slowly replacing coal) is necessary to run the electricity generators by public utility companies, in manufacture of fertilizers! Now USA has planned to LNG to Europe, prices for Natural gas will be set by global prices! It went from less than $3 btu to $9 btu!
They may have a little trouble getting the LNG on ships.
The Freeport LNG terminal you refer to is just one of many terminals. There are lots of them that are working just fine:
Actually, the Europeans are going to have trouble unloading the LNG transport ships as they are short actual terminals.
Wall St or their sycophants always clamor and broadcast their positive narrative, to investors to buy into ‘dips’ b/c it has been OVERSOLD! This is how yesterday’s mkt climb was. Most retail investors fall for it, instead looking at it from long term perspective.
Traders are different, They zig-zag within a day or days. I trade mostly PUTs (shorting, inverse ETFs with some hedges) b/c the general trend is down with expected bounces along the way. My long term investing has become bare minimum! These days are dangerous for those in retirement or those close to with 5 yrs, unless they have hedges.
This coming BEAR will be unlike any other before. Main culprit overwhelming, humongous mountains debt(public & private), every where throughout the world!
I keep reading that there are lots of cash swashing around, mainly by the Wall ST shills & sycophants. Bottom 50% don’t have 1000 bucks saved for emergency. Many even don’t have $400 in savings! Just look at the recent growth in Consumer credit especially revolving type! Majority living on barrowed money, just like our Govt!
sunny129: you are a regular ray of sunshine.
This is NOT Weimer Germany 1923, presently. But we are about to see where the personal finance stats go. A clock is ticking. Stress test. Margin call. Is there an alternative to maxing the credit cards and dragging personal finance out of that wonderful state the technorats (typo, and it stays) say the consumer is in?
Therein (if it hits the middle class hard) lies the strongest basis for expecting a reawakened Fed put, hence, considerable inflation for a considerable time. It will be a balance of miseries if so. One team will promise the magic elixir of tax cuts and tougher law enforcement, the other, paper bailouts for the underwater masses. Fun for all!
Not exactly Weimar but has that Weimar flavor and smell.
There is only a lot of debt, not cash. Most supposed “cash” is just someone else’s debt and all of it is subject to default.
There is also virtually no “cash on the sidelines”. That’s also mostly debt which needs to be sold to someone else to obtain actual cash.
I’m wondering about this issue of consumer credit growth. Federal Reserve data (from 1980) show that “Household debt service payments and financial obligations as a percentage of disposable personal income” has been at record lows the last couple of years. (search “Household Debt Service and Financial Obligations Ratios”)
Maybe someone can explain? Has inflation and rising income been factored in calculating current nominal consumer credit growth?
Also, it might be more informative if the consumer credit information was parsed into income categories.
Gee, you mean taking $95 to fill your tank vs. $45 is hurting peoples ability to afford to travel…. Whoda thunk it.. I guess elections do have consequences.
“I guess elections do have consequences.”
Bad things happen when too many people are too blindly focused on gun fetishism, religious extremism, and keeping women in their place.
I’m seriously concerned about the agendas and competency of both teams. Maybe more gridlock is better than too many fools all crowding one side of the boat, which then threatens to capsize.
“I’m seriously concerned about the agendas and competency of both teams.”
Next year you’ll only have one team to complain about, but that would be a bad idea.
Might want to go to the doctor and get that monkeypox treated before it destroys what little of your brain is left. Maybe you can share a scooter with Marmar! He needs treatment as well, been huffing on unicorn tailpipes for too long.
I have no earthly idea what your third insult was about.
As usual, you completely ignored the other side of the equation.
I’m going to go out on a limb here and suggest that 75% of US households would like and need to save $50 on gas a couple times a month, especially if a majority do not have $500 for an emergency expense according to polls. I think that means demand destruction.
Augustus Frost has pointed out that people will have to start doubling up to save on rent or to pay for a mortgage. Maybe even tripling up. This should lead to more cars parked out on the streets and in front yards. Garages are used to store junk and a charger. As EVs become more popular, I envision a single charger inside the garage with multiple leads routed out to the street and front yard from underneath the garage door and charging several EVs simultaneously.
What percentage of the population has a garage?
“What everyone now wants to know is this: When will demand destruction be large enough to cause a decline in gasoline prices?”
Actually, what I would like to know is when higher gas prices will reduce traffic where I live sufficiently so that there isn’t ridiculous congestion so much of the time.
Dude, just move next to a Hyperloop terminal.
Just spitballing, seems like a change in industrial policy might be called for to avoid energy repeatedly whipsawing the economy. Something like long-term government contracts to purchase refined products. Perhaps a reverse subsidy provision where refiners are paid to decrease output over time to meet climate goals.
You mean like let the government control the oil companies, like in Russia and Saudi?
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This is fast moving now, but the Fed is still pouring fuel on the fire.
Spent $20 billion more at gas stations, from a year ago, due to spiking prices; came out of hide of other retailers. Inflation eats everyone’s lunch.
In short, the party ran out of bamboozle.
Margin debt issued warnings starting in early 2021 that the Big S would hit the fan. Folks blew it off.
Something has to give. And it’s going to be price.
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