AD #3275 – U.S. Gasoline Prices Soar; Elon Musk Demands More Oil & Gas Production; Detroit 3 Profits Threatened
March 7th, 2022 at 11:49am
Listen to “AD #3275 – U.S. Gasoline Prices Soar; Elon Musk Demands More Oil and Gas Production; Detroit 3 Profits Threatened” on Spreaker.
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Runtime: 9:50
0:08 Russian Invasion Sends Gasoline Prices Soaring
0:48 Palladium Prices Shoot Up 79%
1:13 Detroit Three Profits Threatened
1:41 Elon Musk Calls for More Oil & Gas Production
3:01 Cradle-To-Grave: BEV Far Cleaner Than ICE
4:36 Cars & Trucks with Best Resale Value
5:25 Stellantis To Make Ethanol Hybrid
5:56 Peek Inside VW’s ID. Buzz
6:53 ELMS Runs into Real Problems
7:50 Battery Swapping in China Attracts Bosch
8:29 Continental Makes Video Screens Disappear
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RUSSIAN INVASION SENDS GASOLINE PRICES SOARING
The Russian invasion of Ukraine is sending oil prices higher than they’ve been in over a decade. And that means everyone is going to be paying more at the pump. In the U.S. gasoline now costs over $4 a gallon on average. That’s the highest it’s been since 2008, and 40 cents more than just a week ago. In many places in California it’s over $5 a gallon. And prices could go even higher. Legislation was introduced in the House of Representatives to ban the import of Russian oil. Roughly 8% of U.S. liquid fuel imports come from Russia.
PALLADIUM PRICES SHOOT UP 79%
And it’s not just oil that’s going up. The price of palladium, which is needed in catalytic converters, is skyrocketing. Russia produces 25-30% of the global supply of palladium. At the beginning of the year, an ounce of palladium cost $1,900. Now it costs over $3,400 an ounce and that is an all-time record.
DETROIT THREE PROFITS THREATENED
Here’s our Autoline Insight. Soaring oil prices are a real threat to automakers who rely heavily on pickups and SUVs. Sales of those vehicles always slow down dramatically when gasoline prices go up quickly. That could be a real problem for General Motors, Ford, Stellantis and even Toyota. Those companies need the profits from those big vehicles to pay for their investments in EVs.
ELON MUSK CALLS FOR MORE OIL & GAS PRODUCTION
Meanwhile, none other than Elon Musk is calling on the United States to immediately start increasing oil and natural gas production. “Extraordinary times demand extraordinary measures,” he tweeted out. He also said “Obviously, this would negatively affect Tesla, but sustainable energy solutions simply cannot react instantaneously to make up for Russian oil & gas exports.” With the war in Ukraine showing no signs of slowing down, and the global backlash against Russia only intensifying, we think Elon is right. Extraordinary times demand extraordinary measures.
CRADLE-TO-GRAVE: BEV FAR CLEANER THAN ICE
Maybe this will end the argument about whether BEVs are cleaner than ICE vehicles. According to a new study from Ford and the University of Michigan light-duty BEVs “have approximately 64% lower cradle-to-grave life cycle greenhouse gas emissions than (ICE) vehicles on average…” in the U.S. Researchers looked at three different 2020 powertrain options – ICE, hybrid and battery electric – from midsize sedans and SUVs and full-size pickups, taking into account vehicle production, fuel economy, annual mileage, vehicle lifetime as well as regional differences in the electricity grid and outside temperatures. They found that the more you go up in vehicle size, the bigger impact it has on reducing emissions. For example, replacing an ICE pickup with a BEV pickup saves 74 metric tons of carbon dioxide over the lifetime of the vehicles, compared to 45 metric tons if you did the same switch with a midsize sedan. And here’s something else we found really interesting. We know EV manufacturing produces more emissions because battery making is so energy intensive, but it only takes an electric sedan 1.2 to 1.3 years to offset those emissions. It takes an SUV 1.4 to 1.6 years and a truck will reach its breakeven point in 1.3 years.
CARS & TRUCKS WITH BEST RESALE VALUE
Detroit automakers are doing a good job of producing vehicles with good resale value. Six of the top 10 vehicles in Kelley Blue Book’s best resale value list for 2022 are from Detroit automakers. The models are the Chevy Corvette, GMC Sierra, Jeep Gladiator, Ford F-Series, Maverick and Ranger. And the non-Detroit vehicles are the Tesla Model X, Toyota Tacoma, 4Runner and Tundra. Toyota is the number one brand for resale value and Lexus is the top luxury brand. KBB says the average 2022 model year vehicle will retain 43% of its value after five years, while the models in the top ten will retain 56% or more.
STELLANTIS TO MAKE ETHANOL HYBRID
Stellantis is going to launch a bunch of new models in South America over the next few years, including a number of hybrid and electric vehicles. And Reuters reports one of those hybrids could use an engine powered by ethanol. It would be offered in Brazil sometime around 2025. Brazil has had 100% ethanol engines for decades, thanks to government policies to produce ethanol as a fuel. And the idea is starting to gain traction in other areas, like India.
PEEK INSIDE VW’S ID. BUZZ
Volkswagen’s new electric van, the ID. BUZZ, will be fully revealed on Wednesday, but it’s showing off a little more of the interior now. It talks about how it will feature sustainable materials, outlines of the van molded right into plastic panels and even winking smiley faces on some pieces. But we also see a little bit of the design with background lighting that comes in 30 colors or the two-tone paint theme that’s carried through to the seat panels, dash pad and door trim. Some of you may even notice some influence from the classic T1 camper van.
ELMS RUNS INTO REAL PROBLEMS
ELMS, or Electric Last Mile Solutions, is really struggling. The EV startup is going to lay off one out of every four employees. Its two co-founders, Jim Taylor and Jason Luo, resigned over questionable stock purchases. We heard well over a month ago that the company had stopped paying contract engineers. Here’s our Autoline Insight. The biggest problem ELMS ran into is that it imports truck cabs and frames from China, and you can’t put very many of them in a shipping container. Ever since Covid hit, the cost of shipping containers has skyrocketed. In fact, it’s very difficult to even get shipping containers. So if ELMS can’t assemble electric trucks in volume it has no cash flow. And with no cash flow it has to start laying off employees.
BATTERY SWAPPING IN CHINA ATTRACTS BOSCH
Battery swapping for EVs is getting a lot more interest from companies in China. And now Bosch, Mitsubishi and a Chinese company called Blue Park Smart Energy are joining forces to offer a battery-as-a-service business model. The service will be offered to fleets, and to finance companies which would lease the batteries. Blue Park makes the swapping machines, Bosch will supply cloud-based battery management and diagnostics, and Mitsubishi Corporation, not Mitsubishi Motors, has extensive experience in commercializing battery maintenance.
CONTINENTAL MAKES VIDEO SCREENS DISAPPEAR
Car designers are going for a cleaner, simpler look to the interior. So Continental developed a way to blend video screens right into the trim on an instrument panel. They call it Shy-Tech. When it’s off, the displays are invisible. All you see is the trim on the instrument panel. But they can immediately display a variety of things such as large navigation maps, or the speedometer, or even for a video that passengers can watch for fun. Continental says it can offer designers almost any color or pattern of trim they want, including wood, carbon fiber or leather. And the display can even run the entire length of the IP. The idea is to clean up the interior design by integrating video displays into the trim instead of having a bunch of black screens embedded in the instrument panel.
But that brings us to the end of today’s show. Thanks for tuning in.
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Comments (31)
March 7th, 2022 at 12:01 pm
A. Gas prices. You say “over $4 a gallon on average. That’s the highest it’s been since 2008″
Question 1, John and Sean: Are you seriously (not just you, but ALL Journalists and Anchors, auto or not) comparing 2008 Dollars (Watermelons) to 2022 Dollars (14 years of inflation later, ie oranges)?
Question 2, are you also going, 1-2 days from tgoday, when the price exceeds the old record of $4.11 (in 2008 dollars!!), that tomorrow’s $4.20 is “greater” than the 2008 $4.11?
Question 3, do you know this is a horribly wrong comparison, but you still (ALL of you in your field) do it, to attract our attention, since bad news sells, while good news, nobody cares about?
So now let’s get serious please. In May 2008, when the ‘record’ $4.11 happened, the best selling vehicles in the US that month changed in a MONUMENTAL, earthquake way. The Perennial no 1, the F 150, went to no FIVE, 5, and the top 4 were 1. Civic, 2. Corolla, 3. Accord, 4. Camry (!!!)
However, that huge change only lasted a month or two back then.
In TODAY’s, 2022, money, gas prices will keep going up due to the Ukraine Disaster, and even more if we, as we should, and there is bipartisan pressure on the senile idiot in the WH to BAN RUSSIAN OIL IMPORTS. Only when gas prices exceed $4.11 in 2022 dollars, ie, $7.00 or so, (they are already above $7 in some CA gas stations, but of course I mean the AVERAGE gas prices US-wide), then MAYBE you will see the same huge switch away from the idiotic pickups and large SUVs to compact, fuel efficient cars, and some more BEVs.
March 7th, 2022 at 12:05 pm
the liberal pols are causing a lot of problems just to get people to buy EVs.
March 7th, 2022 at 12:06 pm
B. Stop the Presses! “CRADLE-TO-GRAVE: BEV FAR CLEANER THAN ICE”
I assume Ford was the one who wasted their $ on this Joint U Michigan-Ford study (U M just wasted their time), to prove the OBVIOUS.
This reminded me of a news item several decades ago, there was a similar study on Ecdysiasts ( for the illiterate Joe sixpacks here this means Strippers), and one of the most shocking, major findings of that study was that the subjects under study had statistically significantly larger breasts than the average adult female.
Your tax dollars at work, then, and Ford’s dollars at work, now.
March 7th, 2022 at 12:18 pm
Somehow I just lost part of my next post. It was about the TRULY RIDICULOUS “overall score” the New Auto issue of Consumer Reports has.
No time to rewrite it all, but some individual scores, you can go read the rest, and LAUGH OUT LOUD.
Tesla Model S, old CR score 99, NEW one.. 60!
LEXUS. ANY Lexus. ALL are in the Dumps.
At the same time, Porker BMW X5, 90!!!
Genesis, the darling of Auto Journalists and Regulars here. Kit, why don’t you let us know how BAD their scores (ALL MODELS) were, esp the brand new “suv” the GX80, which got… 47!!!
Jeep Wrangler, which made Stellaaa Billions, gets only 28 (!!!!), less than even that excremental FIAT 500 “SUV”
It is INSANE.
I want to see the photos of the geniuses who came up with these scores, and a short Bio for all of them.
More important, I want CR to PUBLISH the ‘equation’, ‘Formul’, or, more likely, their Voo-Doo procedure, which adds up whatever partial scores, broken down in detail by components, and arrives at these LAUGHABLE “overall scores”.
March 7th, 2022 at 12:21 pm
That screen Conti has come up with looks really interesting, some of the tech that’s come out in the last few years is so impressive.
March 7th, 2022 at 12:21 pm
elon musk knows if there is a depression in this country people will not be buying his teslas. Elon Musk Calls for More Oil & Gas Production
March 7th, 2022 at 12:29 pm
I wouldn’t put much value int KBB’s resale value predictions for today’s vehicles in 5 years. Things, they are a changing, and resale value yesterday means nothing about what will happen in 5 years. I’d expect resale of Corvette to remain high, because it is a “niche” vehicle. Big pickup trucks? I wouldn’t count on their holding their value too well by 2027.
March 7th, 2022 at 12:34 pm
@7 I think resale values are very regional. Where I live trucks hold their value very well but sports cars not really but if I lived in Toronto then I can see it being the opposite possibly.
March 7th, 2022 at 12:38 pm
I hope people finally realize that Elon Musk is a “Man on a Mission” to bring Renewal and Sustainable energy to the world.
Elon Musk’s contribution of StarLink to the Ukrainian Freedom Fighters demonstrates that he is not your “Run of the Mill” Billionaire.
March 7th, 2022 at 12:39 pm
Cradle to Grave: does that include disposal/recycling of the batteries; I don’t think that was included, especially since there are no large-scale operations instituted yet. I’m not saying that EV is not more ecological, just saying it may not be as dramatic as stated in Ford’s report.
March 7th, 2022 at 12:41 pm
4 This is what CR’s “overall” score is based on:
“Overall score reflects a vehicle’s performance in our road tests, predicted reliability and owner satisfaction from our annual auto surveys, the availability of front-crash prevention systems, and crash-test results from IIHS and NHTSA, if tested.”
Many buyers don’t care about the latest crash prevention tech, crash test results, or even reliability. Some cars, like Tesla Model Y and Corvette have very low reliability survey results, and Corvette lacks many driver assistance features. As a result, Model Y got an “overall” rating of 59, and Corvette got 57. The CR score that car enthusiasts, and many other buyers should look at is “road test” score, where the Y got 90, and the ‘Vette got 97. CR’s car tests, as with other reviews of vehicles and other products, are most useful if you actually look through all of the information, not just one number.
March 7th, 2022 at 12:42 pm
I think, in order for us to see significant change in the model mix the buying public want, we need both fuel price shock and a sense that the prices are going to remain consistently high for at least a year or two.
I think we have those conditions currently, so it will be interesting to watch the market respond.
One big topic in the EV world is when will we reach the tipping point for EVs over ICE. It may be much sooner with this war than it would have been otherwise.
March 7th, 2022 at 12:46 pm
8 Resale value is regional, but the outfits like Carmax remove a lot of the regionality by transporting vehicles they buy to where the value is best.
9 Yeah, I’ve heard that Starlink has been very valuable in Ukraine, and even in parts of Russia where internet access has been cut off, or is heavily censored.
March 7th, 2022 at 12:50 pm
10 I’m wondering if those “cradle to grave” estimates are based on some guesses that effective recycling of batteries will exist by the time currently sold EVs are scrapped.
March 7th, 2022 at 12:54 pm
We drove 386 miles for $16.74 on Tuesday March 1, 2022 in our 2019 Tesla Model 3. This included all home and highway charging from our default 75% back to 75%. It would cost the same today.
March 7th, 2022 at 1:07 pm
1. You probably had many readers agreeing with you until you took an ugly and completely unnecessary turn by attacking the President. Stick to the facts, which your baseless assertion is certainly not.
March 7th, 2022 at 1:22 pm
Does that cradle to grave include the emissions from mining and refining the ores that make up the batteries and the disposal of batteries at end of life or we just talking about production of the vehicle and the emissions it produces over it’s life span ?
March 7th, 2022 at 1:23 pm
@16 I don’t think he was attacking the President of the United States: I read it as him referring to himself as a senile idiot.
March 7th, 2022 at 1:35 pm
gas prices will be the least of your monthly costs as there was a food producer on TV saying food for a family of 4 will be $1500 a month soon as his cost to raise it have more than doubled.
March 7th, 2022 at 2:25 pm
I’ve been involved in the energy industry for over 40 years. (all types of energy). Oil consumption in the world is up 60% in the last 20 years. Even if some wealthy countries switch their wealthiest inhabitants to electric cars, oil consumption worldwide will not decrease unless economic activity or population growth decreases. Keep in mind that plastics and a multitude of other materials are derived from oil.
Elon Musk has an insatiable appetite to be in the news every single day and his latest comments are far more selfish in nature. He must be aware that significant sudden increases in energy costs, historically, ALWAYS lead to a significant recession and a decrease in consumption. In his case, luxury high priced personal vehicles.
In have never bought into his false narrative of saving the world by taking us off oil and saving the planet by moving us to Mars… I’ll admit he does have accomplishments but he’s more like P.T. Barnum, Ponzi and Trump all rolled into one.
March 7th, 2022 at 2:46 pm
20 Road vehicles are, by far, the biggest user of oil, with petrochemical production a very distant second.
https://www.statista.com/statistics/307194/top-oil-consuming-sectors-worldwide/
Over time, oil consumption should decrease as big, thirsty vehicles die off, and are replaced by EVs and more efficient oil burners, but that will take years, or decades to change much.
March 7th, 2022 at 2:54 pm
18 LOL +1
March 7th, 2022 at 3:13 pm
20) He is definitely self serving as he knows a global recession will kill sales of anything above $30-35K which is everything he makes. The OEMs that still sell products in the below $30K range will be able to weather the storm. He also knows a global recession will kill EV investments and all tax incentives/schemes related to EV development as countries look to prioritize cash to feeding people and not paying for $45K+ cars.
March 7th, 2022 at 3:13 pm
a great show to kick off the new week,cheers
March 7th, 2022 at 4:28 pm
I really like the Continental screens being integrated into the trim. Finally cars may start to look like they were designed with a display in mind and not thrown on the dash like it was an afterthought.
Gas prices never really follow inflation and the general public has to have it. Buying a new house or a car or TV is a choice. But most everyone needs gas electric water and of course we all want those as cheaply as we can get them because it’s not like you can go without. You can conserve and try and use less yourself but you still end up being affected when prices go up because it will affect everyone else too. So the farmer the truck driver the grocer and everyone in between gets hit with that increase cost. It all gets passed onto the consumer so yep hold on everyone cause we about to pay more for everything.
March 7th, 2022 at 5:01 pm
while waiting for electric revolution the 3 detroit automakers need desperately an extremely fuel efficient vehicle. even if they had to collaborate with each other and the national laboratories.
March 7th, 2022 at 5:09 pm
like the volkswagen XL1
March 7th, 2022 at 5:10 pm
but with affordability in mind. not so exotic materials.
March 7th, 2022 at 5:41 pm
Core inflation averaged ~2% per year… about 31% cumulative. So, $4.11 in 2008 would be ~$5.40 today. Simply math.
March 8th, 2022 at 9:12 am
Maybe we will experience a new VW bug. Not necessarily from VW but any automaker that can launch an affordable EV. Could a cheap no frills “people car” EV sell?
March 8th, 2022 at 10:31 am
30 I’d think there’d be a market for a cheap, basic, short range EV as a commuter car for people who can charge at home. I’d consider one to use when I’m in Indiana, charging with a 120v outlet, if the car was cheap enough.