Winning: diesel demand hits 26-year low as EV, hydrogen sales boom
US diesel demand plummeted to its lowest seasonal level in 26 years last quarter – but is that due to a down economy, or booming commercial EV sales?
The production of distillate, the petroleum-based fuel that powers trucking, heating, and heavy industry, plunged to 3.67 million barrels per day in March (down from more 4.1 million barrels last year) according to monthly data from the US Energy Information Administration. That figure marks a downward revision from the agency’s previous estimates, and is even lower than the same month in 2020 (3.96 million). But, while less oil is generally good for people and planet, it’s not always good for profits.
“The deteriorating diesel market is a warning signal that broader oil demand growth could be at risk,” according to a quote attributed to Dennis Kissler, senior vice president for trading at BOK Financial Securities, by Transport Topics. “Consumption of the fuel tends to fall as the economy slows, and a slowing economy presages waning demand for other fuels.”
“It’s a function of the slowing of the economies in Asia and the US and how inflation is tightening consumer spending habits,” Kissler said, continuing to spin a decline in oil consumption as a bad thing. “They’re not going out and spending money like they were a year ago.”
Is it really inflation, or is it EVs?
Even in diesel-loving Europe, the diesel engine is dying a quick death. Volvo, for example, recently built its last-ever diesel vehicle, an XC90 (above), and rolled it straight off the assembly line and into a museum.
Volvo’s not alone. Companies like Nissan, Hyundai, and Daimler (parent company of Mercedes-Benz and the Freightliner and Rizon truck brands) have also backed away from developing new internal combustion engines.
And, while we’re on the topic of Daimler’s truck brands, it’s worth noting that commercial EV sales are soaring. Despite all the doom, gloom, and wishful thinking from the pro-oil/anti-EV crowd, the numbers paint a narrative of swift expansion in the commercial EV and ZEV (Zero-Emission Vehicle) markets, with CALSTART’s latest figures revealing a remarkable 250% growth in the zero-emission heavy truck market.
Those same CALSTART figures, from January of this year, show that the US had seen the deployment of more than 14,000 battery-electric cargo vans in 2023, with a significant surge of 11,835 units deployed in the first half of that year, alone. That is a staggering 461% increase in deployments compared to CALSTART’s previous report – and the electrification of large commercial fleets is a trend that doesn’t seem to be slowing down.
Take a good look at the numbers for HD trucks. The CALSTART graph shows “just” 867 units on the road, sure – but consider some recent news stories that are blowing that number out of the water:
I could keep going, but you get the idea: there are hundreds, if not thousands of electric trucks on the road today that weren’t this time last year – and if you don’t think that’s putting a damper on diesel demand I have a bridge to sell you.
Electrek’s Take
The oil industry knows that we’re past “peak oil,” and demand for diesel is going to continue to drop. Both because trucks are electrifying and switching to hydrogen, and because diesel/ICE models are becoming ever more efficient, using less diesel to move the same amount of Earth and goods. That’s why they’re not pulling the usual demand levers of lowering prices – instead, oil companies seem to be raising prices compared to crude oil and refining costs, giving this writer the sense that they’re trying to grab as much cash as they can while the grabbing’s still good.
That’s my take, anyway. What’s yours? Scroll on down to the comments section at the end of this story and let us know.
SOURCES: Equipment World, Transport Topics; other source links throughout.
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On today’s sunny side up episode of Quick Charge, we take a look at the latest from the world of solar power, and discuss Congressional Republicans’ plans to limit your energy independence by eliminating a critical tax credit for homeowners nearly ten years early. (!)
We’ve also got a quick review of a massive solar farm powering 200,000 homes in Indiana and the biggest solar project East of the Mississippi – both part of a record 98% of all new power generation and grid capacity introduced in 2025 coming from wind and solar. Those are jobs, those are lower utility rates, those are energy independence … so why are Congressional Republicans working to make that more expensive?
Source Links
If you want to read that EnergySage report on the state of the home solar industry, including news about battery energy storage system and V2H/V2G prices and financing trends, you can check it out for yourself, below, then let us know what you think in the comments.
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If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
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A Waymo autonomous vehicle drives along Masonic Avenue on April 11, 2022 in San Francisco, California.
Justin Sullivan | Getty Images News | Getty Images
Alphabet’s Waymo unit has received approval to expand its autonomous ride-hailing service to more parts of the San Francisco Bay Area, including San Jose.
In March, the company submitted a request to the California Public Utilities Commission to gain approval for its latest passenger safety plan, a key step in gaining permission to operate driverless vehicles across a broader area. On Monday, the proposed expansion was approved, allowing for Waymo’s driverless coverage to extend from San Francisco down through the Peninsula.
“We’re very excited to share that the CPUC has approved our application to operate our fully autonomous commercial ride-hailing service in the South Bay and nearly all of San Jose!” the company wrote in a post on X on Monday. “While this won’t change our operations in the near-term, we’re looking forward to bringing the benefits of Waymo One to more of the Bay Area in the future.”
The $5 billion Empire Wind is back in business. The Trump administration’s Bureau of Ocean Energy Management (BOEM) has lifted its stop-work order for Empire Wind, a major offshore wind project off the coast of New York led by Empire Offshore Wind LLC, a subsidiary of Equinor. Construction is now allowed to resume.
Equinor CEO Anders Opedal welcomed the news, saying the restart reinforces Equinor’s commitment to delivering clean energy while supporting local economies and saving thousands of jobs. He also credited a wide coalition of officials for helping get the project back on track, including Trump, New York Governor Kathy Hochul, and congressional leaders like Senator Chuck Schumer and Representative Dan Goldman. Opedal also thanked the Norwegian prime minister and the minister of finance for raising the issue with the US administration.
Governor Hochul said in a statement that “countless conversations with Equinor and White House officials” had taken place.
Neither the BOEM nor the Department of the Interior has issued a comment.
The Trump administration halted construction of the 54-turbine Empire Wind on April 16, but discussions between Equinor, regulators, and leaders at the federal, state, and city levels led to a reversal. That means Empire Wind can now push ahead with its goal of powering 500,000 New York homes with offshore wind energy.
“This project delivers on the energy ambitions shared by the US and New York by providing a vital new source of power to the region,” said Molly Morris, president of Equinor Wind US. She added that Empire Wind is boosting supply chain investments across the country, with activity in New York, Louisiana, Pennsylvania, Texas, and South Carolina.
Equinor plans to reassess the project’s financials in the second quarter. The goal is still to install turbines offshore in 2025 and hit full commercial operation by 2027. The company says it will work with suppliers and regulators to minimize any delays from the month-long pause.
Empire Wind was first awarded its offshore lease in 2017 after a competitive federal process. It received its final construction green light in early 2024 following an extensive environmental review. Construction kicked off shortly after, and the project is now over 30% complete.
The US is a major market for Equinor. The Norwegian energy giant says it has invested around $60 billion in US energy projects since the early 2000s, more recently in low-carbon solutions, critical minerals, and renewables. Empire Wind is one of its flagship projects in the US.
Read more: Trump admin halts $5 billion NY offshore wind project mid-build
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
FTC: We use income earning auto affiliate links. More.
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