Europe’s ‘not out of the woods’ despite gas prices falling to 4-month lows
The latest data shows that the EU’s overall storage levels are at an average of nearly 94% full.
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European gas prices may have dropped to levels not seen in more than four months, but this is far from being the end of the energy crisis, four industry analysts told CNBC.
The Dutch Title Transfer Facility (TTF) is Europe’s main benchmark for natural gas prices. Russia’s invasion of Ukraine and the subsequent pressures on Europe’s energy mix have pushed natural gas prices to trade at historic levels back in August — above 340 euros per megawatt hour. However, these have significantly come down since then, ending Thursday’s session at 108.5 euros per megawatt hour.
In addition, intraday European gas prices even went negative at the start of the week — meaning that holders of natural gas paid buyers to take the cargo off their hands.
“With gas storage near full, LNG inflows in oversupply and favourable mild autumn weather, prices are doing the work to keep the system balanced as commodities trade in the present,” Ehsan Khoman, head of commodities research at MUFG Bank, told CNBC via email.
The latest data compiled by industry group Gas Infrastructure Europe shows that the EU’s overall storage levels are at an average of nearly 94% full. That’s comfortably above the 80% target the bloc had set for countries to reach by the start of November.
Some of the LNG (liquefied natural gas) orders made during the summer are arriving now, when storage is full, representing an oversupply. Temperatures in the region have also been unusually warm, with some nations currently experiencing 20 degree Celsius (68 degrees Fahrenheit) heat.
Nikoline Bromander, analyst at consultancy Rystad Energy, said high output from wind power and political agreement within the EU on cooperative measures to reduce gas prices and consumption have contributed to lowering gas prices.
But Europe’s energy crisis isn’t over, and analysts are warning European policymakers against complacency.
Europe ‘not out of the woods’
“The temptation in Europe will be to take a sigh of relief and acknowledge the hard work and tough decisions on demand and supply that have been taken,” Bromander said in a research note.
“However, a series of factors – from Asian demand for LNG potentially increasing to a lack of sufficient regasification facilities in Europe means that decision makers may feel the pressure sooner rather than later.”
One of the big question marks is what will happen to LNG demand when China fully reopens its economy. Beijing has been the biggest buyer of LNG in the world, but its zero-Covid policy has prevented its economy from operating at full capacity. If this dynamic changes in the coming months, there will be more competition for the commodity and prices could spike.
Even if this winter ends up being mild, next winter also remains a supply concern.
Tom Marzec-Manser
head of gas analytics at ICIS
Henning Gloystein, director for energy at consultancy firm Eurasia Group, told CNBC that “the current glut shouldn’t be seen as a signal though that the upcoming winter might not see energy shortages.”
“Given there’s virtually no Russian gas available in Europe, supply is tight. Once it gets cold, inventories will draw down. If there’s a late winter cold snap when stocks have been reduced, thigs could get pretty tight in early 2023, meaning possible price spikes and potential energy shortages,” Henning said, adding that “it’s therefore still very important for industry and households to try to reduce consumption.”
Tom Marzec-Manser, head of gas analytics at energy consultancy ICIS, reaffirmed the point that that weak gas prices in recent days should not be interpreted as a sign that Europe is now out of the woods when it comes to managing the lost flows from Russia.
Before Russia’s invasion of Ukraine, the EU was obtaining about 40% of all its natural gas from Moscow. That has now fallen below 10%.
“Forward pricing indicates that high prices will soon return: ICIS data shows gas for delivery in January is more than four times the price of spot gas at the TTF,” Marzec-Manser told CNBC via email.
Europe has in recent months endured a sharp drop in gas exports from Russia, traditionally its largest energy supplier.
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“Even if this winter ends up being mild, next winter also remains a supply concern as refilling storages through the summer of 2023 will be much harder than summer just gone, with little-to-no Russian gas available,” he added.
Several experts have warned that Europe’s high storage levels were to a large extent achieved with Russian gas. Even Xavier Bettel, the prime minister of Luxembourg, an EU nation, acknowledged earlier this month that storage was full with Russian gas. However, Russia supplies have been severely disrupted and it is Europe’s aim to be completely free from Russian fossil fuels.
Furthermore, there’s also the risk that European demand picks up in the coming months.
“The risk with the sell-off in the European gas market is the potential that demand starts to pick-up,” Khoman from MUFG Bank said, citing reports that fertilizer producers in Europe are easing curtailments.
“If this is part of a broader trend that we see in European demand, it would make it increasingly difficult for Europe to rebuild storage to comfortable levels ahead of next winter,” he added, projecting gas prices to average 200 euros per megawatt hour in the second quarter of 2023 and until the end of next year.
The CEO of EDP, Portugal’s utilities firm, summed it up when speaking to CNBC’s “Squawk Box Europe” Friday. “Certainly we are in a much better place than we were a couple of months ago,” Miguel Stilwell d’Andrade said, but “we should expect a lot of volatility going forward.”
What would you get if you created the illegitimate love child of a Mercedes G-Wagon and a Brinks armored truck (and perhaps if the Mercedes chain-smoked through the pregnancy)? I think you’d wind up with something like the wacky-looking electric cart that has earned the dubious honor of being named this week’s Awesomely Weird Alibaba Electric Vehicle of the Week!
I’m not sure this is exactly an armored golf cart, so I wouldn’t invite any unnecessary potshots while cruising your hood, but I’m at a loss of how else to describe it.
It’s definitely not a “real” car, as evidenced by its US $6,999 price tag and the 30 km/h (18 mph) top speed. If you ask me though, that speed goes in the ‘advantages’ column. When you drive something that looks this good, you want to be going slow enough to give people a good, long look.
A vehicle like this is designed to send a statement. Unfortunately, I think that statement might be, “I wanted a Jeep but my spouse wanted to remodel the kitchen.”
So if it’s not a real car, then what is it?
Measuring a stubby 306 cm long (an entire half inch over 10 feet), this four-seater mini-SUV is less G-Wagon and more “Oh, gee” wagon. It can supposedly carry up to 370 kg (815 lb) in passengers or cargo, but there’s no telling how much of a dent that puts in the already challenged top speed.
Safety might also be a passing concern. It doesn’t have any seatbelts, but the tires look like they just about extend out past the front and rear, so at least you’ve got some nice shock-absorbent bumpers built into the design.
The advertisement claims a maximum range of up to 80 km (50 miles) per charge, which seems like several more miles than anyone needs from something like this.
There’s no word on battery technology, which means I’m assuming either features older lead acid tech or there’s a frunk full of lemons and a bunch of loose wires running through the firewall.
I’m glad to see that the roof rack is at least equipped with enough LED lights to make an airport runway jealous, just in case I find myself stuck in the wilds of my backyard after dark. And that roof rack even looks pretty heavy-duty, though since the cart is considerably taller than it is wide, tight turns with a heavily-loaded roof rack should probably be avoided.
As much as I love this thing, I don’t think I’ll be whipping out my credit card any time soon.
Don’t get me wrong, I’ve bought plenty of bad ideas on Alibaba before. But since my $2,000 electric truck ending up costing me nearly 4x that much by the time it landed in the US, I’m a bit worried what the final price tag on a $6,999 Mini-MegaOverlander would become.
I don’t recommend anyone actually try buying this cute little TinyTrailblazer either, and I’m certainly not vouching for the vendor, who I discovered by chance while scrolling through Alibaba to procrastinate real work. Keep in mind that this is all part of a tongue-in-cheek column I write, diving into the depths of Alibaba’s weird and funny collection of awesome electric vehicles.
But hey, if someone does go that route, it wouldn’t be the first time my advice has been ignored and some awesome photos have landed in inbox several months later. Just don’t say I didn’t warn you if it turns out some Nigerian prince has your last paycheck and you’re up a creek with no MicroMudder to come bail you out!
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Yup, Mullen Automotive [Nasdaq: MULN] is still here! And the EV company is defying the naysayers, reporting progress in EV sales, and reducing its monthly burn rate. Following Mullen Automotive’s significant strides in expanding its EV presence and improving its financial health in the last few weeks, Electrek caught up with David Michery, CEO and chairman of Mullen Automotive, who told us what trends he thinks 2025 will see for EV owners and others in the EV market.
After 2024 saw breakthroughs in tech, affordability, and adoption, Michery predicts this year will see even more disruption, transforming transportation and logistics on a massive scale. Here’s what to watch for this year.
EV total cost of ownership falls sharply
“Even if the federal EV tax credit from the Inflation Reduction Act is repealed, EVs will become more affordable through state-level incentives, manufacturer subsidies, and private partnerships. The investment case for electrification is simply too strong for the private sector to ignore.
“Reduced battery costs, cheaper maintenance, and lower energy expenses will make EVs increasingly attractive to businesses and consumers. Charging infrastructure programs and fleet retrofitting will also help organizations navigate the upfront costs with the goal of long-term savings.
“The result is a financial tipping point: EVs will no longer just be environmentally compelling – they will also be the most cost-effective choice.”
Commercial EVs expand their use cases
“If 2024 was any indication, 2025 will bring new use cases for EVs. Transportation and delivery will likely continue to reign supreme, but the customizable nature of EVs means that we can expect more specialized use cases such as airport shuttles, university campus logistics, home services, and refrigerated delivery.
“Airports will adopt EV cargo vans for quieter, cleaner transit and delivery between terminals, while universities will electrify campus logistics to align with sustainability goals. Innovations in temperature-controlled EVs will expand the reach of refrigerated deliveries, cutting emissions in cold-chain logistics. And this is cause for celebration.
“New use cases mean more widespread adoption – and recognition that electrification is the best way forward.”
(Editor’s note: This is the business that Mullen Automotive is in, and he’s not wrong.)
2025 will be the year of the battery
“EV batteries are poised for immense improvement in the coming year. Solid-state polymer batteries – an innovation that significantly expands battery lifespan and thus widens range – are currently in road testing.
“Offering higher energy density and faster charging, these new batteries will make EVs more reliable and competitive with internal combustion vehicles as compared to other electric alternatives.
“Plus, better range and more efficient energy consumption will undoubtedly translate to lower maintenance costs for fleet owners.”
Read more: Mullen scores a solid, 3,000-unit electric truck order from Volt Mobility
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Environment
Toyota is still lagging behind EV rivals in the US as bZ4X sales finally start to pick up
Although Toyota bZ4X sales nearly doubled last year, the auto giant is still falling behind in the US EV market. Overseas rivals like Hyundai and Kia are lapping Toyota. Even other Japanese automakers, including Honda and Nissan, are selling more EVs in the US than Toyota.
Toyota bZ4X sales lagged behind US EV rivals in 2024
Toyota boasted that its 2024 electrified vehicle sales reached over 1 million in the US in 2024. However, that’s primarily thanks to its hybrid models.
With just 1,854 bZ4X models sold in December, Toyota’s 2024 total reached 18,570. Although that number is up 99% from the 9,329 sold in 2023, it’s still far behind the competition.
To put it in perspective, Honda, which began delivering its electric Prologue last March, sold over 33,000 models last year. In December, Honda sold nearly 7,900 Prologues alone. During the second half of 2024, Honda sold an average of over 5,000 electric SUVs per month.
Nissan also outsold Toyota with nearly 19,800 Ariya electric SUVs sold last year. Nissan’s decade-old LEAF secured another 11,226 sales in the US in 2024, up 57% year-over-year.
Kia’s first three-row electric SUV, the EV9, outsold the bZ4X last year despite a +$10,000 higher MSRP. After deliveries began in late 2023, Kia sold over 22,000 EV9 models in the US last year.
After setting new US sales records last year, Hyundai and Kia are aggressively aiming for more EV market share in 2025. Hyundai began production at its massive new EV plant in Georgia, where it will produce new EVs like the upgraded 2025 IONIQ 5 and three-row IONIQ 9.
With Kia building EV9 models at its West Point plant and the Genesis Electrified GV70 built in Alabama, Hyundai Motor has five EV models that qualify for the $7,500 federal tax credit for the first time, which should boost demand further.
Toyota slashed 2025 bZ4X prices by $6,000 to make it more competitive. Starting at $37,070, the 2025 bZ4X undercuts the 2025 Hyundai IONIQ 5 ($42,500) and Nissan Ariya ($39,770).
Although Honda has yet to release 2025 Prologue prices, it’s expected to start much higher. The 2024 Honda Prologue starts at $47,400.
Electrek’s Take
Like several others, Toyota pushed back major EV projects, including its first three-row electric SUV. The delay gave overseas rivals, like Hyundai and Kia, an opportunity, which they gladly took advantage of.
Toyota also scrapped plans to build new Lexus electric SUVs in North America. Instead, the new Lexus EV models will be imported from Japan.
The company is preparing to start battery production at its new $13.9 billion facility in NC, which should help ramp up EV sales. In the first half of 2026, it will also begin building the larger electric SUV at its Georgetown, Kentucky, plant.
The Japanese auto giant is still promising advanced new EV batteries are coming soon with significantly more range and faster charging at a lower cost. But when will they actually hit the market?
Toyota has been vowing to launch new EV battery technology for years. By 2027, the company plans to launch a pair of new Performance and Popularized batteries, which will enable a nearly 500-mile (800-km) WLTP range. In 2028, Toyota plans to launch solid-state EV batteries with mass production in 2030.
Will it be enough? Or is Toyota already too late to the party? Let us know what you think in the comments below.
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