Gas Guzzlers Are Back!

posted in: Charts, crude oil, Energy | 0

A note via RBC:

 

Vehicle_Fuel_Efficiency

“Total new US auto sales were evenly split between cars relative to trucks and SUVs in the five-year period leading up to 2015, but the latter category now makes up about 60% of total new vehicles rolling off the lot.

To this point, regulations and efficiencies in cars are what have re-written the historical relationship between vehicle miles traveled and gasoline demand. Large-scale electric cars will be the next big disruption risk to the industry, but electric cars as a segment remain in their infancy, and the threat to gasoline demand remains muted for the time being. Tesla sold 50,000 vehicles last year, which compares to total vehicle sales of more than 17 million cars US wide. There will be a time in the future when we will be more concerned about the cannibalization of gasoline demand, but that time is not now.”

My take is that U.S. consumers simply can’t get enough of larger vehicles (SUVs) because we love space. The reprieve in gas prices during the last year and a half has ensured that gas prices will remain well supported for years to come as U.S. drivers have loaded up on gas guzzlers during a period of exceptionally low oil/gasoline prices.