By Thomas Paulson, Head of Market Insights Elon Musk started off the Q1 results call saying, “Well, it’s never a dull moment these days. Well, thanks, for sure, every day is going to be exciting.” That’s a statement that most would agree with. Following TSLA the company and stock has never been dull for us over the past decade; as such, it has been a topic in our Advan Insights. And so, here we go with one more update.

Historically, gas demand has been pretty predictable for any given time of the year, so the supply has been what mostly determined the pricing we see in the pumps. With the advent of remote working and as a result the ability to commute less, however, Americans have at least one lever to reduce the amount of gas they purchase. The other major aspect of the demand of course being leisure travel.

Advan has been flagging an unprecedented demand in gasoline as early as February 2021. Unsurprisingly, gasoline prices have been following traffic (ie demand) at the gas stations in lockstep, since we have started tracking gas station traffic in 2016. The graph below shows gasoline prices overlaid with Advan Miles Driven index: We can speculate about the reasons for the surge in demand: more people are driving to work instead of using mass transit; more are traveling by car instead of flying when possible; more are just not working or taking trips when they can; people moved out of city centers where they didn’t regularly use a car and are now driving for groceries, run errands etc.

Automotive is one of the industries that has been struggling with chip shortages, supply chain issues and labor shortages for months now. But do all the carmakers struggle at the same level? To answer the question, we employed Advan’s foot traffic data for two US automakers and one Japanese: Ford (F), General Motors (GM) and Toyota (TM) respectively. Starting with Toyota, the largest manufacturer in the world by the number of units produced, we see that the total number of employees each month does not fluctuate considerably after the sharp drop in the early months of the pandemic.

Workers at Deere & Co. (DE), the world’s top agriculture equipment manufacturer, walked out of its factories to demand better pay and health benefits, a move that had not be seen in over 30 years, and while the company is on track for its most successful year ever. The strike started on Oct. 14 with about 10,000 employees or about 15% of Deere’s workforce (according to Bloomberg ), refusing to work in an effort to change their contracts.

Automakers have been struggling to produce cars due to the global shortage of semiconductor chips first occurred in the early months this year. Fiat/Chrysler, General Motors and Ford and other big names in the industry announced they would reduce the pace of production to tackle this challenge. It did not take long and the impact of the idled factories is now reflected on the sales. Using employee counts are often times the right metric produced by our data to analyze industrial companies.

Gas prices and futures (contracts to buy gasoline at some point in the future) have been up massively over the last few months, to the extent that some traders are betting on the return of $100 oil/barrel before the end of the year (Options Traders Bet on Return of $100 Oil ). It was reasonable to expect that with US reopening after the pandemic we would see an increased demand in travel, and gasoline demand as a result.

The answer is: Yes and no. Road trips are back but air travel is slower to recover. Using our latest traffic pattern data, some interesting new travel trends emerged over the Memorial Day weekend (MDW) - the unofficial beginning of the summer season for many Americans on the go. We believe this pattern could be a leading indicator for consumer behavior as we move closer to Independence Day in July and the summer vacation period.

One of the largest moves we have ever seen in our data is that of gas station visitors and miles driven. Americans drive more now than they ever did, pre-pandemic and all. What is the best way to trade this data? According to the analysis below, Gasoline Futures. This is the RBOB Gasoline front month index, on a year over year change basis, overlaid with Advan’s foot traffic at all US Gas Stations, also on a year over year basis.

After a year of virus-related travel restrictions and with Covid vaccinations picking up steam nationwide, Americans are feeling more comfortable to get out of town, fact that is causing a surge in post-vaccination travel. Using our proprietary geolocation data, we can see the sudden increase in travel-related indexes, a sign that consumers are ready to travel again. US airlines reported an increase in airfare activity as restrictions started to ease more across states.