Wednesday, January 5, 2022

Commentary -- Flood Of Vehicles To Begin Hitting The Market This Summer -- January 5, 2022

Updates

January 6, 2022: a reader who knows the "truck industry" as well as anyone and who writes me to expand on my notes as often as necessary, provided these thoughts regarding my notes below:

600 mile range for an electric truck will put it into a regional delivery range. 200 to 300 mile trip - 600-mile round trip and the unit comes back to the terminal. 
600 miles is not enough range for long haul truckers who can drive 11 out of 24 hours.
At the posted limit it puts the 600 mile truck in a range of no reserve power in case of any type of delay or in extreme hot or cold weather which reduces the range. 
Urban, close-haul pickup and delivery is the only real useful place for electric powered trucks. Great for use at container ports, delivery of gasoline, and other short, multiple daily trip loads. 
Long haul is the last use of electric. 
The big question still is where will all the power come from? To install a charging location, truck stop or terminal will take a huge amount of power. Are there any power plants being built to service this demand, 24 / 7 no matter what the weather? 
There are supply chain disruptions now  with plenty of blame flying around. Who will take the heat when the region you are in has no reliable delivery, especially in extreme weather.

Comment: great, great help for me -- that comment --- first of all, huge difference in my thinking -- "long haul" vs "medium haul" vs "short haul." I was completely wrong suggesting EV would be an answer for "long haul" but it looks like EV niche might be "medium haul" (ports, terminals, high density urban areas) and "short haul." 

The big, big, big issue remains: the infrastructure. I concentrated on footprint of the recharging pads -- that is a very small issue compared to the underlying need for much more robust electric grid beginning with power stations.

Original Note

January 4, 2022: dam will break, summer of 2022 -- flood of new cars start hitting the market.

I made that comment yesterday, that by the summer of 2022 -- about six months from now, a flood of new cars will start hitting the market. 

Now this in The WSJ today: automakers supercharge move into electric vehicles. No specific timeline but 2023 will start to see the many new EV entries, but the supply chain issues will resolve well before then for ICE vehicles, and we should see a huge flood of new vehicles this summer (2022). 

The big three: GM, Ford, and Rivian. Timelines and updates.

  • Rivian fades in the long term.
  • Ford beats GM to market.
  • Tesla pick-up seems to be the laggard. My hunch: the prototype design was seen as a dud; designers started over. 

Long-haul trucks:

If these long-haul trucks really get 600-mile range on single charge, the "big guys" are going to start plotting (probably already have) where to put the mega-electric truck stops.

I don't know if other folks have noticed but truckers like to sleep also, and the truck stops are absolutely full overnight -- perfect for re-charging their vehicles.

But the footprint will be interesting. Right now, a truck pulls in, refuels and in fifteen minutes leaves the refueling pump, and goes off to park.

With e-charging, these trucks will occupy the charging station all night, so instead of six pumps for a hundred trucks, they will need a hundred charging stations for a hundred trucks. 

Derivative

To make sure they get a charging station, truckers will pull off the road earlier in the evening to beat the crowd. This could really be a disaster for a trucker who can't find an available charging station; could lose up to one day in travel time. 

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The Sports Page

Local high school posted photos of recent scrimmage with our granddaughter's soccer team. Link here.

The Guyer high school posted 58 photos, almost all of which featured Guyer athletes. Of the handful of photos of Grapevine High School athletes, almost every one of them was of our granddaughter Olivia.




EVs -- POVs -- Cars, Pick-Up Trucks; Fleets -- Minivans, Vans -- Scorecard

Scorecard, January 5, 2021.
Scorecard, November 22, 2021.

Apple, Foxconn, November 19, 2021.
Scorecard, November 18, 2021
.

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Commentaries

January 5, 2022.
January 4, 2022: dam will break, summer of 2022 -- flood of new cars start hitting the market.

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Scorecards

Scorecard additions, January 5, 2021, link here -- Amazon partners with Stellantis; separate story, new battery manufacturer, Our Next Energy (ONE).

  • Rivian -- Amazon -- Ford out -- GlobalFoundries
  • Stellantis -- Amazon -- see what happened to Rivian when this was announced, January 5, 2022;
  • Sony -- SUV announced -- link here.
  • Lordstown -- Apple -- GM -- silicon M1 chip (GM currently depends on seven chip manufacturers)
  • Tesla -- chips (?)
  • Lucid - chips (?) -- Casa Grande, AZ 
  • Volkswagen, the ID4: five plants worldwide; ID4 will start rolling out from VW's Nashville, TN, plant. 
  • GM --
  • F --

Scorecard changed, November 22, 2021.

EV scorecard just a few days ago, link here:

  • Rivian -- Amazon -- Ford -- GlobalFoundries
  • Lordstown -- Apple -- GM -- silicon M1 chip (GM currently depends on seven chip manufacturers)
  • Tesla -- chips (?)

Landscape changed:

  • Rivian -- Amazon -- Ford out -- GlobalFoundries
  • Lordstown -- Apple -- GM -- silicon M1 chip (GM currently depends on seven chip manufacturers)
  • Tesla -- chips (?)
  • Lucid - chips (?) -- Casa Grande, AZ

The scorecard, November 18, 2021:

  • Rivian -- Amazon -- Ford -- GlobalFoundries
  • Lordstown -- Apple -- GM -- silicon M1 chip (GM currently depends on seven chip manufacturers)
  • Tesla -- chips (?)

Apple -- Foxconn, November 19, 2021.

How will AAPL do it? Foxconn. On November 10, 2021, Foxconn and Lordstown Motors entered into a strategic partnership. Link to press release here. Wasn't "November 10, 2021" just one week ago?

  • Lordstown, Ohio: factory already there, and it's not in California
  • Lordstown Motors Corp: a provider of electric light-duty trucks focused on the commercial fleet market
  • Hon Hai Technology Group (Foxconn): one of the largest electronics manufacturers in the world
  • press release explains how this is all going to be done
  • Lordstown Motors: wiki. Workforce? Locked and loaded to get this done.

EVs: The Scorecards Evolve. Amazon Partners With Stellantis; Mercedes F1-Derived Battery Vs ONE Startup -- January 5, 2021

Amazon partners with Stellantis, January 5, 2022. 

Amazon.com Inc and Stellantis NV said Wednesday (January 5, 2022) they will collaborate to develop cars and trucks with Amazon software in the dashboards, and deploy electric vans made by Stellantis on Amazon's delivery network.

The agreements expand Amazon's efforts to get a bigger foothold in the transportation industry, and could help Stellantis close the gap with Tesla Inc in developing vehicles with sophisticated, software-powered infotainment features that are connected to the data processing cloud.Stellantis shares were up more than 3% in Milan.

The agreements between Stellantis and Amazon, the online retailer and cloud computing power, announced in conjunction with the CES technology conference, are wide ranging, involving software and hardware.Amazon and Stellantis said they will work together to develop software for the "digital cockpit" infotainment systems of Stellantis vehicles that will start launching in 2024.

Stellantis said it will use Amazon's Alexa technology for voice controlled features, "navigation, vehicle maintenance, ecommerce marketplaces, and payment services." Big ecommerce delivery fleet operators such as Amazon will be key to determining winners and losers as established automakers compete with startups to electrify the world's package delivery system.

Mercedes F1 battery, January 5, 2022.

An electric car's driving range is a big frickin' deal. It's why Mercedes-Benz was so pleased when it leveraged F1-derived battery and wind-tunnel technology to create the Vision EQXX Concept with a massive 620 miles of range. 
That's not sarcasm. 
If accurate, 620 miles is huge--even in a relative concept car, given that it actually works and is road legal. Michigan battery startup Our Next Energy (ONE), however, has reportedly gone a step further, squeezing 752 miles from a single charge without stopping to recharge. 
According to ONE, it swapped a Tesla Model S's battery for one of its own design -- a patented technology called Gemini -- then it ran a bunch of tests to prove the range possible. 
ONE's founder and CEO, Mujeeb Ijaz (formerly the senior director of energy storage at Apple) told The Drive the following in regards to its findings: 
"We conducted two tests, the first on public roads in a trip that spanned Detroit Michigan to Michigan's Upper Peninsula and back," said Ijaz. "We recorded 752.2 miles one this run at an average speed of 55 mph and in average ambient temperature conditions below freezing. The second test was conducted indoors on a vehicle dynamometer at 73.4° F temperature at 55 mph and we achieved 882 miles during this test."

Thirty-Four Active Rigs; Hess With Four New Permits; Two DUCs Reported As Completed; And Another Beautiful Day In The Bakken -- January 5, 2022

Active rigs: 34 active oil and gas rigs according to the NDIC

$77.31
1/5/202201/05/202101/05/202001/05/201901/05/2018
Active Rigs3413556354

Five new permits, #38731 - #38735, inclusive:

  • Operator: Hess
  • Field: Big Butte (Mountrail), Manitou (Mountrail), Manitou (Mountrail)
  • Comments:
    • Hess has permits for two EN-Neset wells and three EN-Anderson wells in SESW 7-156-94; the wells will be sited 705 FSL and between 1714 FWL and 1846 FWL;

One permit renewed:

  • 37205, Grayson Mill, Larsen 10-2 XE 1H, Williams County; scout ticket still shows it as an Equinor well; not sure what this is all about, in the daily activity report this name (Larsen 10-2 XE 1H) but on the NDIC map it is still carried as "Larsen 3-10 XE1 #1TFH." This is on a pad that was originally permitted for ten wells but six have been canceled; two are completed/producing (#20842 and #20013); two are still confidential (#37205 and #37206).
    • 20013, Lucy Hanson 15-22 1-H, AB, t8/11; cum 352K 6/19;
    • 20842, Larsen 3-10 #2H, AB, t7/11; cum 298K 6/19;

Two producing wells (DUCs) reported as completed:

  • 36783, 3,082, Grayson Mill Operating, Marcia 3-10 7H, the scout ticket still shows it as an Equinor well;
  • 37885, 516, Crescent Point Energy CPEUSC Sylven 3-11-2-158N-100W-MBH,

Bad Hair Day -- January 5, 2022

In honor of National Bird Day (a few days ago):

Levi: here, hold my birdseed --


Lesson learned: do not stick finger in electrical outlet.

How Global Leaders Think About The Future Of Energy -- January 5, 2022

Strategically:

  • Mexico will begin to phase out crude oil and refined exports this year and end all such exports in 2023;
  • China is likely to halve their fuel export quota; keep more at home.
  • US will mandate that more be kept in the ground (forever); and release reserves from the SPR to sell to China and India.

My hunch: the Brandon team is using the "heating water on the stove / frog on a log" theory to gradually raise price of gasoline in California to expedite transition to EVs.

This seems to be a huge win - win for investors. 

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UNP

Wow. From Zacks.

And after all that, Zacks still rates UNP as a "hold." What am I missing? Waiting for a pullback to buy on the dip?

Permian's Pioneer Goes Naked -- January 5, 2022

From social media or go direct to the Bloomberg paywall or direct to MSN with no paywall.


XOM, Guyana, "A New Find" -- The Snarky Edition -- January 5, 2022

I know I'm wrong looking at this in this way, but perhaps not all that wrong. 

Here's another note from social media regarding XOM and Guyana.

We all know there is oil off-shore Guyana, but every time XOM has a successful well off-shore Guyana, XOM and/or the analysts call it "a new find."

In my mind that would be like EOG releasing a presser every time they completed another Permian well or Bakken well, saying they had "a new find." 

In my mind, a successful well off-shore Guyana is not "a new find," but another successful well. 

MIRITE?

EIA's Weekly Petroleum Report -- WTI Crosses (Going Up) $78 -- January 5, 2022

Link here

  • US crude oil in storage decreased by a moderate 2.1 million bbls from the previous week;
    • US crude oil in storage now stands at 417.9 million bbls, 8% below the five-year average;
    • US crude oil imports averaged 5.9 million bbls per day last week, yawn; decreasing by 0.9 million bbls per day from the previous week;
    • over the past four weeks, imports averaged 6.3 million bopd, almost 17% more than the same four-week period last year
    • US refiners are operating at 89.8% of their operable capacity, no change
  • distillate fuel inventories reported by EIA corroborate API estimates from yesterday reporting an increase of 4.4 million bbls last week -- which is a big deal -- based on other data, it suggests "demand destruction" more than anything else -- high prices;
    • distillate inventories are 16% below the five-year average
  • total products supplied over the last four-week period averaged 21.4 million bbls/day up by 14% from same period last year;
  • jet fuel product supplied was up almost 40% compared to same four-week period last year

At time of release of this report:

  • WTI: up 1.35%; up $1.04; trading at $78.03.

EVs -- Commentary -- January 5, 2022

Note: WTI just crossed (going up) $78. Whoo-hoo. 

Updates

Later, 12:36 p.m. CT: what are the three top reasons why folks don't buy pick-up trucks? Answer:

  • they are pick-up trucks;
  • they are expensive to buy;
  • they are expensive to fuel;

New paradigm: why folks are going to love all-electric pick-up trucks:

  • they are pick-up trucks;
  • they are no more expensive than the current Teslas being sold;
  • they are incredibly inexpensive to fuel.

Original Post

I was slow to "coming around" to EVs but slowly I'm starting to get "a feeling" for what's going on or how it plays out.

A disclaimer: for EVs to become mainstream there is still a huge infrastructure build out that will be required, and a recognition that forty percent of Americans live in apartments or rental homes, where individuals have less control over availability of in-home EV charging stations.

EVs can be divided into at least seven categories:

  • POVs, non pick-ups: family sedans, SUVs, cross-overs; across all income sectors, including luxury
  • POVs, pick-up trucks: farm, ranch, urban cowboys;
  • commercial, personal rentals: Hertz, Enterprise, U-Haul;
  • commercial, last mile: minivans, vans, neighborhood delivery vehicles, US Postal Service
  • commercial, pick-ups: construction; landscaping / lawn; pool maintenance;
  • commercial trucks, long haul:
  • commercial trucks, specialty:

In the POV sector, the big story will be pick-up trucks

And that makes sense. I'm used to paying $20 to fill up my little Honda Civic but I see sales of $70 or more when someone fills up their F-350. A lot of those folks pay in cash. These folks are going to love not going to the service station and paying that kind of money. In addition, if the pickup truck is being used for work, less down time for oil changes and routine maintenance. I think EV pick-ups sales are going to be huge, and right now, it appears Ford has the advantage. 

In the commercial truck, specialty sector, I am very, very biased toward Daimler. 

Rental, fleets, neighborhood small business: I don't know how the other sectors play out, but my hunch is that the US government (USPS), Amazon, Hertz, Enterprise, U-Haul will pick winners and losers when it comes to two of the sectors. It's very possible, U-Haul could be the next big commercial company to announce transition to EVs. 

POV cars/SUVs: up for grabs. 

Commercial trucks, long haul ("18-wheelers," "semis"): up for grabs. Daimler might be big in this arena overseas but not so much in the US.

Financial And Economic Notes -- January 5, 2022

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here

Commentary on EVs: I was slow to "coming around" to EVs but slowly I'm starting to get the feeling there is some clarity here. I guess I will continue this discussion elsewhere.

PFE: shares up 2% in pre-market trading as Biden announces that it has asked Pfizer to double the production of "Covid-19 pills." Jim Cramer advocates US distributing the "Covid-19 pill" free of charge to every American. Okay. Later: just announced. US raises "order" to 20 million from 10 million for the new "Covid pill." BofA analyst suggests the "pill" could raise PFE's current cash horde from $40 billion to $100 billion, or something along that line.

GM: another look at all the excitement yesterday with regard to GM. Link here.

  • For the record, GM sales totals show it sold one Hummer EV in the fourth quarter and 25 Bolts for a total EV sales of 26 vehicles. A 2022 theme.

Daimler Truck: it looks like we're almost there -- for the new Daimler Truck Group to start trading ADRs on NYSE. From Merrill Lynch this morning:

EPD: Wall Street will be looking for positivity from Enterprise Products Partners as it approaches its next earnings report date. The company is expected to report EPS of $0.55, up 7.84% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $11.31 billion, up 60.54% from the prior-year quarter. Zacks

JNJ: quarterly dividend of $1.06 remains unchanged; dates: 2/18/22; 2/22/22; 3/8/22.

Have we jumped the shark? From social media:


Never sure what this means? Link here.

First group "financial / economic" indicators:

  • 10-Year Treasury: link here. 1.653%. After small jump this past week, it has stopped rising for at least one day.
  • DXY: link here. 96.05, down slightly.
  • Silver: link  here. Continues to rise, now at $23.215.
  • CBOE volatility index: link here. Up slightly at 17.11.

WTI Trending Toward $78; Mexico To Phase Out Crude Oil Exports -- January 5, 2022

ND governor: has eased some driving restrictions for truckers hauling propane. 

US shale: equities jump as demand swells revenue. Rigzone. Link here

US shale: Spain's Repsol buys US shale oil and gas assets from Rockdale Marcellus for $222 million. Link here.

Mexico: to phase out crude oil exports over the next two years (2022 - 2023). I knew this was going to be a big story, and that hunch corroborated with blog on the subject from RBN Energy. See below. 

  • US oil imports;
  • US imports from Mexico;
    • about twenty million bbls oil and petroleum products each month; 700,000 bopd
    • the total volume is inconsequential; the problem: it's "the kind of oil" the US refiners needs
  • US imports from Canada:
    • about 130 million bbls oil and petroleum products each month; 4 million bopd
    • again, Canadian oil is the "right" kind of oil

US gasoline prices continue to rise.

Huge ADP payrolls report. Good growth; smashed expectations. Dow goes from red to green as news is being reported, but then back to red.

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Back to the Bakken

Active rigs:

$77.49
1/5/202201/05/202101/05/202001/05/201901/05/2018
Active Rigs3213556354

Wednesday, January 5, 2022: 4 for the month, 4 for the quarter, 4 for the year

  • 26824, conf, Bruin, WM Polar 157-101-25B-36-6B, Otter, nice production

Tuesday, January 4, 2022: 3 for the month, 3 for the quarter, 3 for the year;

  • 37900, conf, CLR, JDT Federal 24-10RH, Cedar Hills, small production;
  • 37000, conf, CLR, LCU Reckitt Federal 7-22H1, Long Creek, no production data,
RBN Energy: how Mexico's plan to phase out crude oil exports may impact US refineries. Archived.

Mexico’s state-owned PetrĂ³leos Mexicanos, the second-largest exporter of crude oil to the U.S. after Canada, said in late December that it will slash its export volumes in 2022 and eliminate them completely in 2023. The plan is premised on Pemex’s expectation that, with increased utilization of the company’s six existing refineries and the impending start-up of a new one, it will need every barrel of the Maya, Isthmus, Olmeca, and other varieties of oil it produces. While at first glance it may seem that Mexico phasing out exports of crude would pose a major challenge to some U.S. refineries, there’s good reason to believe that in reality it won’t. In fact, as we discuss in today’s RBN blog, there may be less to Pemex’s planned export phase-out than meets the eye.