EIA Short-Term Energy Outlook
Brent crude oil prices are forecasted to average $89 per barrel in the second half of 2024, up from $84 per barrel in the first half, due to continued withdrawals from global oil inventories. These withdrawals are partly driven by OPEC+ production cuts, expected to remain until at least September. Despite higher oil prices, U.S. households are projected to spend a lower percentage of their disposable income on gasoline, at 2.3% in 2024 and 2.2% in 2025, due to factors like falling gasoline prices and increased vehicle efficiency. The forecasted regular grade retail gasoline price is around $3.50 per gallon for 2025, lower than the 2023 average and $0.50 less than the 2022 average.
Automakers Reconsider Rapid Shift to Electric Vehicles Amid Market Challenges
Automakers once committed to a rapid shift to electric vehicles (EVs) but are now slowing down due to cooling sales, high prices, and uncertain politics. Companies like GM, Ford, Volvo, and others are delaying EV launches, keeping some gasoline models, and increasing focus on hybrids. Market conditions and consumer demand are influencing these adjustments, making the transition to all-electric fleets more gradual than initially planned.
GM Delays EV Expansion Plans, Pushing Back Key Launches
General Motors is delaying the launch of its second U.S. electric truck plant and Buick’s first EV, pushing the retooling of the Michigan plant to mid-2026 and potentially missing its goal of 1 million EVs in North America by 2025. CEO Mary Barra emphasized the need for responsible growth, while CFO Paul Jacobson hinted at the possibility of further delays or adjustments to future EV battery cell plants. Despite a 40% increase in U.S. EV deliveries in Q2, EVs only accounted for 3.2% of GM's total sales. GM aims to produce 200,000 to 250,000 EVs in North America this year, with profitability expected once output reaches 200,000 units by Q4.