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.
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 Reassess EV Production Amid Declining Demand
Automakers face overcapacity in EV production due to weakening demand, prompting a return to combustion-engine cars. U.S., German, and French automakers are producing EVs at 40-45% below expectations. Europe’s EV market is struggling with high prices and reduced subsidies, causing companies like Mercedes-Benz to delay EV targets and Volkswagen to consider shutting a factory in Belgium. Stellantis halted EV output in Italy, and Valeo seeks buyers for two plants. In the U.S., Ford is investing $3 billion in its Super Duty F-Series pickup truck, shifting from a delayed electric SUV. Interest in hybrids and plug-in hybrids is growing. OPmobility confirmed its full-year targets despite uncertainties, with shares rising 12% on strong new orders. The shift to EVs was driven by regulations, not consumer demand.