U.S. Consumers Mull EVs Amid Higher Gasoline Prices

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

A report from JD Powers finds renewed consumer interest in electric vehicles. The internal combustion engine still has the market cornered, however.

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Higher Gas Prices Offset Policy Headwinds

A string of domestic refinery issues, coupled with the geopolitical risk premium causing gas prices to rise, has U.S. consumers renewing their interest in electric vehicles, a report from JD Power finds.

On Wednesday, IIR Energy News Intelligence reported that Suncor Energy was working to restore power and restart units at its Denver Commerce City Complex, where two plants--Denver Refinery - Plant 1 (West) and Denver Refinery - Plant 2 (East)--combine for 98,000 barrels per day (bpd) in crude oil-processing capacity.

Industrial Info Resources is tracking progress at these and other refineries. For more information on these facilities, the Industrial Info Resources Global Market Intelligence (GMI) Petroleum Refining Plant Database offer details--including capacities, maintenance schedules and necessary equipment--in profiles of Plant 1 and Plant 2.

The broader Denver area is feeling the pinch. Travel club AAA reported the average price for a gallon of regular unleaded gasoline was $4.65 on Thursday, up 6.4% over the last seven days.

With those costs on the rise, U.S. automotive data analytics company JD Power, in an annual study on consumer considerations, found 26% of new-vehicle shoppers said it was "very likely" they'd consider buying an electric vehicle (EV) last month, up 3% from the prior month.

"Despite ongoing policy changes, including the repeal of federal tax credits, a growing number of new-vehicle shoppers remain interested in EVs," said Brent Gruber, executive director of EV solutions at JD Power.

The lack of federal support for the so-called energy transition is prompting domestic automakers to shift production from full EVs to hybrids and turn back toward internal combustion engine vehicles, leaving some domestic battery-manufacturing capacity offline.

Ultium Cells, a joint venture between GM and LG Energy Solution, is retooling its plant in Spring Hill, Tennessee, to shift production from EV battery cells to lithium-iron phosphate (LFP) battery cells for energy-storage systems (ESS).

But GM and joint-venture project partner Samsung SDI, a unit of Samsung, are building a $3.5 billion battery plant in Indiana that can produce EV and LFP batteries. Readers can read detailed reports for the Tennessee and Indiana projects.

Meanwhile, JD Power found that consumers are still a bit wary of embracing EVs. Range anxiety and the availability of charging stations is the top consumer concern, though JD Power's study found that concern declined 6% from last year.

"The irony is that public chargers are already more common than many people realize," Gruber said. "Across much of the country, fast chargers are often available within about 50 miles, but for those not driving an EV, they can be easy to overlook."

By the Numbers

• 3% month-on-month interest in EVs
• 6.5% spike in gas prices in Denver tied to refinery issues

Energy Transition Stalling, But Not Idled

While EV adoption remains slow, the conventional energy sector is rocked by war in the Middle East that began with joint U.S.-Israeli airstrikes on Iran in late February. The price for Brent crude oil, the global benchmark, is up 48% since the conflict began, leading to the highest level of U.S.-consumer inflation in three years.

Even still, the industry remains upbeat on the prospects of electrifying the transportation sector, among the highest polluting sectors in the world.

"When combined with accretive recurring revenue from software and physical services and decisive actions to improve our EV performance, we are driving a fundamentally more profitable business, allocating capital with extreme discipline, protecting our balance sheet, and positioning Ford to deliver consistently higher returns," said Sherry House, the chief financial officer of the Michigan-based company.

Ford is rolling out a Universal EV (UEV) Platform, with the introduction of a truck model expected later this year. It's also spinning off a battery-manufacturing division as Ford Energy.

In its financial report for the first quarter, Ford Model e, its clean vehicle arm, lost $777 million as it worked on new and more affordable EVs and UEV platforms.

Key Takeaways

• EVs still viable, even with the lack of federal support
• Refinery issues, war premium, creating headaches for consumers

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news, and analysis on the industrial process, manufacturing, and energy-related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified, and verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).