Gasoline Demand Has Peaked As Electric Vehicles Rise : The Indicator from Planet Money On this very special episode of Indicators of the Week, we talk about the decline of demand for gasoline and reflect on the past three years of the show with Cardiff.
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Peak Gasoline And Cardiff Fare Thee Well

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Peak Gasoline And Cardiff Fare Thee Well

Peak Gasoline And Cardiff Fare Thee Well

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UNIDENTIFIED PERSON, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC'S "WAKING UP TO THE FIRE")

CARDIFF GARCIA, HOST:

Hey, everyone. Stacey and Cardiff here. This is THE INDICATOR FROM PLANET MONEY. And welcome to a special Thursday edition of indicators of the week. Stacey, we're off tomorrow.

STACEY VANEK SMITH, HOST:

Oh, yes, we are, because the markets are closed, and so we have the day off. So it is our early indicators of the week, Thursday edition.

GARCIA: Indicators of the week, of course, is when Stacey and I share with each other and with our listeners an indicator from the week that we came across and that we thought was striking, fun, interesting, you know, something that just stuck with us. We kind of ambushed each other with those indicators because we haven't told each other what they're going to be.

SMITH: It's not an ambush (laughter). There - no blood is shed, typically.

GARCIA: Not yet, but there's a first time for everything.

SMITH: That's true.

GARCIA: So find out after the break...

GARCIA: Yes.

GARCIA: ...Whether or not any blood will be shed in the sharing of today's indicators of the week.

SMITH: Also, if Cardiff can break his devastating rock, paper, scissors losing streak - devastating and mathematically almost impossible.

GARCIA: I'm 0 for the last 4, but I think this is it, yes.

SMITH: You think - you're sensing a turnaround? OK.

(SOUNDBITE OF MUSIC)

GARCIA: OK, Stacey, as always, you and I play rock, paper, scissors for who goes first in sharing our indicator of the week. I've lost four in a row, OK, four in a row.

SMITH: We should clarify that you've lost every single time we've ever played rock, paper, scissors. You lost.

GARCIA: Yes, four times.

SMITH: (Laughter) I just like the way that sounds.

GARCIA: Here we go. Ready? On three.

SMITH: OK.

GARCIA: One, two, three. Five in a row. Five in a row. I can't believe it. Rock beats scissors.

SMITH: I was trying to lose. Rock crushes scissors.

GARCIA: I can't believe it.

SMITH: Well, Cardiff, for this one, you know, it's winner's choice, I imagine - right? - because I rocked it.

GARCIA: Yeah, of course.

SMITH: I would like you to go first.

GARCIA: Oh, OK. You're going to let me go first.

SMITH: I'm just classy like that. Yeah.

GARCIA: All right. Excellent.

SMITH: What is your indicator of the week?

GARCIA: (Laughter) Well, then here is my indicator of the week. It is 26.6 million barrels per day. That is the gasoline demand for the whole world in the year 2019. And here's why that's such a big deal. A new report from the IEA, the International Energy Agency, predicts that that year was peak gasoline demand, that we may not actually get back to that amount of gasoline demand ever again. And there's a couple of reasons why this might be the case.

SMITH: Like the whole globe was shut down because of the pandemic. So one of the reasons is, like, a little rough, right?

GARCIA: Just for 2020, right?

SMITH: Right.

GARCIA: So 2020, everything kind of collapsed. But the IEA is essentially saying that, even after the pandemic ends, we won't get back to the pre-pandemic peak in gasoline demand. And one reason is simple. It's just greater fuel efficiency. So you keep getting better mileage for each gallon of gas that you put in your car. That means you just don't need to buy as much gas. Another is you can imagine there are some societal trends like more teleworking that will lead to a bit less driving. But the big one seems to be that a technology that's been simmering for a very long time and which just hasn't gone to market is now finally here and seems like it's ready for mass adoption. And that's electric vehicles.

In the case of GM and Volvo, they've announced targets for when they are no longer going to even sell gas-powered vehicles. They're going electric. And so I think there's a big lesson to draw here, and it includes issues like political incentives to adopt newer technologies, right? Which is that we've been hearing for so long that electric vehicles are going to be a thing, long enough that I think a lot of us have become kind of cynical, right?

But this is actually quite common for a technology to be improving, to be tinkering, but not yet be adopted because a number of things have to happen first. One is that you need like new infrastructure to be built to accommodate that technology. Another is the technology itself doesn't just need to improve. It needs to improve to the point where it's cheaper than other alternatives.

But another thing you need is for the overall, like, you know, environment to be ready for that technology to become useful to the masses. And one of the things that helps is when the government does provide incentives for that technology to finally be adopted, like what's happening in California and a lot of other places where, you know, electric vehicles have either been subsidized or gas-powered vehicles have been discouraged. And that is what it seems the IEA is expecting and why gasoline demand for the whole world may have already peaked.

SMITH: That is a beautiful indicator. Nice work, scissors.

GARCIA: (Laughter) So that was winner's choice. I went first for the first time ever. Thank you for that. That was very gracious of you.

SMITH: I tried to be a good winner since it seems to be like my lot in life - winning.

GARCIA: That was the pity go first. Stacey, so that's my indicator. What is your indicator of the week?

SMITH: OK, mine is a little sound cue, so hopefully you can hear this.

GARCIA: OK.

SMITH: All right.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

GARCIA: I'm Cardiff Garcia.

SMITH: And I'm Stacey Vanek Smith. This is the INDICATOR FROM PLANET MONEY.

GARCIA: A show about work, business and the economy.

SMITH: Do you know what that is?

GARCIA: That sounds like a very, very, very early indicator, like, from the earliest days of THE INDICATOR.

SMITH: It was, in fact, our very first indicator. It was the very first time that we said those words. And in fact, we have said them almost 750 times since then in the, like, three-plus years that we have been doing the show.

GARCIA: Wow.

SMITH: That is my indicator today, 750.

GARCIA: That is quite a milestone. But yeah, I think I know why you brought it up.

SMITH: Of course, Cardiff, the reason that I am bringing this up is that you are leaving THE INDICATOR. This is your last indicator of the week. You are moving on. You're starting your own podcast. You're starting a company. It's a very exciting time for you, very sad for me.

GARCIA: It's also sad for me. I mean, you know, I'm leaving to go do this project I'd been dreaming about for a very long time. But obviously, I'm going to be ambivalent about it because it means leaving behind this great experience of having made THE INDICATOR and most of all of having partnered with you from the very beginning and having gone to do all these great shows together. And I'm also very sad. And I'm so just proud of, like, how we worked and the shows that we made together. It's been really awesome. But you're right, this this is, today, my last indicator as a full-on member of THE INDICATOR team. So, yeah, it's - I don't even know what to say. I'm getting a little emotional over here.

SMITH: I have some sub-indicators that I can give you to give you a minute.

GARCIA: Yes. Let's go there.

SMITH: So 750-ish indicators over the last three years. That is 6,000 minutes of us talking.

GARCIA: Wow.

SMITH: About 38 Jobs Fridays.

(SOUNDBITE OF AIR HORN)

GARCIA: All right.

SMITH: Six episodes about the yield curve that I could find.

GARCIA: The yield curve inverted.

SMITH: The yield curve.

GARCIA: Try to contain your excitement.

(LAUGHTER)

SMITH: I still don't really understand it, going to be 100% honest here, Cardiff.

GARCIA: I'm surprised it's only six. I'm a little disappointed I didn't get to double digits on the yield curve episodes, yeah.

SMITH: Three episodes about mixed martial arts.

GARCIA: (Laughter).

SMITH: Spoiler alert - those were not my idea.

GARCIA: In general, the show is about sports, right, Cardiff.

SMITH: That was you.

GARCIA: But still.

SMITH: One recession. One pandemic. The Dow Jones Industrial Average has climbed 8,769 points. And, of course, Cardiff, zero days that I did not feel really lucky and really enjoy working with you.

GARCIA: That's very sweet. That indicator, of course, applies to me as well and working with you,

SMITH: Six thousand minutes of us talking - 6,000.

GARCIA: (Laughter) But no, I mean, working on the show has been just unbelievably rewarding. And, yeah, I'm going to miss the team. I'm going to miss you. And I'm also going to miss our listeners, you know, who've been so awesome and need to keep listening to THE INDICATOR because under your helm, it's just going to keep getting better and better. And for that reason, if no other, I will definitely be back to bask in the glory of what it will continue to be. And I can't wait for that. You know, I'm happy that, you know, we're going to keep, like, a great relationship. And, yeah, it's been really special.

SMITH: Yes. OK. So, Cardiff, so here is to - I don't know. Here is to 750 shows, 6,000 minutes and to your new venture, which we're all excited to hear about. And we'll have you back to talk about it.

GARCIA: You bet.

This episode THE INDICATOR was produced by Jamila Huxtable and fact-checked by Sam Tsai (ph). It was edited by Jolie Myers. And the INDICATOR is a production of NPR.

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