Tag: United States

Saudi Arabia’s fiscal breakeven oil price is rising fast. What will the kingdom do about it?

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An offshore drilling platform stands in shallow waters at the Manifa offshore oilfield, operated by Saudi Aramco, in Manifa, Saudi Arabia, on Wednesday, Oct. 3, 2018.

Simon Dawson | Bloomberg | Getty Images

Saudi Arabia has a superpower. Not only is it the largest exporter of crude oil in the world; its production costs for oil projects are also the lowest in the world, at around just $10 per barrel. When around 75% of your fiscal revenue comes from oil, that’s a big deal.

And for a time, its fiscal breakeven oil price — what it needed a barrel of crude to cost in order to balance its government budget — was fairly comfortable, too.

That’s changing as the kingdom embarks on huge spending projects as part of Vision 2030, which aims to modernize its economy and diversify its revenue sources away from oil. With each passing year, that projected fiscal breakeven oil price gets higher, and the kingdom’s deficit widens.

In May of 2023 the International Monetary Fund forecast the kingdom’s breakeven oil price at $80.90 per barrel, which moved it back into a fiscal deficit following its first surplus in nearly a decade. To be sure, the fiscal breakeven isn’t the price at which Saudi Arabia makes a profit on crude but the average oil price it needs to balance the books.

The IMF’s latest forecast, in April, put that breakeven figure at $96.20 for 2024; a roughly 19% increase on the year before, and about 32% higher than the current price of a barrel of Brent crude, which is trading at around $73 as of Wednesday afternoon.

Riyadh, Saudi Arabia.

Johnnygreig | E+ | Getty Images

“At least until 2030, Saudi will have massive budgetary needs due to the need to demonstrate some significant outcome in key Vision 2030 projects and to prepare for and host big sporting and cultural events” like the World Cup 2034 and Expo 2030, said Li-Chen Sim, a non-resident scholar at the Washington-based Middle East Institute.

“All this amidst expected growth in oil supply from the U.S., Guyana, Brazil, Canada, and even the UAE and possible anemic oil consumption growth in China, the Kingdom’s largest oil customer, means that the Kingdom’s fiscal breakeven price is likely to rise perhaps to around $100.”

All that, she adds, does not include the domestic spending requirements of the kingdom’s mammoth sovereign wealth fund, the Public Investment Fund, which is behind multi-trillion dollar megaprojects like NEOM. A Bloomberg forecast cited by Nomura Asset Management put this year’s breakeven price, including PIF spending, at $112 per barrel.

“Saudi Arabia is wealthy and government spending has climbed rapidly over the past decade but it has fiscal parameters within which it must operate just like every other country,” a Nomura report on Arabian markets published Sept. 2 read.

Important economic indicators “like oil production and prices, are now flashing warning signs,” it added. “A global slowdown amid supply uncertainties may hamper prospects for hydrocarbon economies.”

Saudi Arabia’s economy swung dramatically from a budget surplus of $27.68 billion in 2022 to a deficit of $21.6 billion in 2023 as it ramped up public spending and decreased oil production due to its OPEC+ supply cut agreement. Its government forecasts a deficit (meaning the total amount of money spent will be more than the money received) of $21.1 billion for 2024, projecting revenue at $312.5 billion and expenditures at $333.5 billion.

Does the breakeven oil price actually matter?

But wait — fiscal breakeven prices are not always as important as people think they are, some economists and market analysts argue. And for Saudi Arabia, a range of options exist to manage deficits and less-than-ideal oil prices.

“The reality is that countries run deficits all the time, and therefore the idea Saudi Arabia needs $112 oil, or whatever the number is, to me doesn’t provide a true representation of what’s going on,” one energy analyst who focuses on the kingdom told CNBC.

“For Saudi Arabia, they have a lot of capacity to take on more debt if they wanted to … it’s not an issue for them to run a small deficit,” the analyst said, speaking anonymously due to professional restrictions on speaking to the press.

The kingdom also has robust foreign currency reserves, which grew to a 20-month high of $452.8 billion in July, and has been successfully issuing bonds, tapping debt markets for $12 billion so far this year. Oil revenue should increase in 2025 when the OPEC+ production cuts, the majority of which were taken by Saudi Arabia, expire, according to energy analysts.

“From that perspective, they’re also starting from a relatively strong position,” the source said.

Saudi Arabia’s public debt has grown from around 3% of its GDP in the 2010s to 24% today — that’s a massive increment, Sim said. But by international standards, it’s still low. Average public debt in EU countries, for instance, averages 82%. In the U.S. in 2023, that figure was 123%.

Watch CNBC's interview with Saudi Arabia's assistant minister of investment

Its relatively low debt level and high credit rating makes it easier for Saudi Arabia to take on more debt as it needs to. The kingdom has also rolled out a series of reforms to boost and de-risk foreign investment and diversify revenue streams. While the country’s economy has contracted for the last consecutive four quarters, non-oil economic activity grew 4.4% in the second quarter year-on-year, up 3.4% from the prior quarter.

“The good news is that the economy is progressing along its diversification track and has already absorbed large reductions in subsidies and higher VAT while generating a huge number of jobs,” the Nomura report said.

While the kingdom “still lacks the quantum of foreign direct investments desired,” it wrote, “the newly approved investment law should bring it closer to achieving its goal of building a substantially bigger non-oil sector.”

Risks remain, however — primarily if oil demand continues to be soft in major consuming countries and crude supply in non-OPEC+ countries continue to grow, Sim said. And those risks are entirely out of Saudi Arabia’s control.

“With regard to the first point, the biggest danger is a possible tit-for-tat tariff war between China and the US or Europe,” Sim said. This “could result in slower global economic growth and hence a reduced demand for oil.”

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AI demand could strain electrical grid in coming decade

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Power lines and transmission towers near the Ivanpah Solar Electric Generating System in the Mojave Desert in San Bernardino County, California, U.S., on Saturday, Feb. 19. 2022.

Bloomberg | Bloomberg | Getty Images

Artificial intelligence could strain the U.S. electric grid, as power demand from data centers is poised to surge in the coming decade just as supply is falling due to the rapid retirement of coal-fired plants.

Data centers in the U.S. alone could consume as much electricity as some major industrialized economies produce by 2030, as they proliferate not just in number but also in the scale of their power needs.

The computer warehouses that power the Internet and increasingly AI could require up to 400 terawatt hours of electricity by 2030, according to an August report from Mizuho Securities.

That’s more than the total electricity production of the United Kingdom in 2022, according to data from the International Energy Agency.

Data center developers are knocking at the door of the nation’s utilities at the same time many of these power companies are retiring coal plants as part of the transition away from fossil fuels. But the waiting list to bring clean energy, primarily solar and wind, onto the grid to replace coal is long and renewables are less reliable.

PJM Interconnection, the largest grid operator in the U.S., warned in July that the reliability of the system is a growing concern as coal plants close faster than new power generation is built.

PJM serves 13 states primarily in the Mid-Atlantic region, including northern Virginia, the largest data center market in the world. Resources in areas of Virginia are insufficient and the transmission system is constrained, limiting the ability to import power from elsewhere, according to PJM.

Yet data center “growth is accelerating in orders of magnitude, driven by the number of requests, the size of each facility and the acceleration of each facility’s ramp schedule to reach full capacity,” Dominion Energy CEO Robert Blue told investors on the company’s earnings call on Aug. 1.

Electrification of economy

In addition to data centers, manufacturing is returning to the U.S. and the broader economy is electrifying. Recent auction prices to bring new power capacity to the PJM power pool have surged more than 800% as a consequence of rising demand and limited supply.

“The market has already made one transition from coal to gas,” Susan Buehler, a spokesperson for PJM, told CNBC. “We see this energy transition is here. We just see that the forces around it are happening faster than the renewable energy transition is happening.”

“So we see a potential gap, and that’s what the market is signaling,” Buehler said.

PJM has forecast that electricity demand surge will surge nearly 40% by 2039 in its 369,000-square mile service area. Meanwhile, 40 gigawatts of existing power generation is at risk of retirement by 2030, or about 21% of PJM’s current installed capacity.

While there are 290 gigawatts of renewable projects waiting to get connected to the grid, in the past only about 5% of such projects have actually been built, according to PJM.

About 38 gigawatts of renewable energy have been approved for connection and another 72 gigawatts are coming in the first quarter of 2025, Buehler said, but the projects are not being built quickly enough due the challenges developers are facing on the ground.

Buehler said developers “can’t get their projects sited, there are supply chain delays, and there are financing issues.”

Step-change in investment needed

Utilities that operate in PJM have disclosed at least 50 gigawatts of potential data center demand during their recent earnings calls, though CEOs have cautioned there could be some duplication in the numbers.

About 29% of current data center electricity demand in the U.S. is located within PJM’s territory, according to Mizuho. Some 25% of data center power demand in the nation is in Virginia.

American Electric Power, one of the largest electric utilities in the U.S., has commitments for more than 15 gigawatts of demand from data centers through the end of the decade, interim CEO Benjamin Fowke told investors on the company’s second-quarter earnings call earlier last month.

That level of demand is equivalent to more than 40% of the peak electric load of 35 gigawatts across AEP’s entire system at the end of last year, according to Fowke. AEP serves 5.6 million customers in 11 states in the Midwest and South.

“These are far from just inquiries,” Fowke told investors. “These are serious customers that want to get on the grid and are willing to financially commit to do what it takes to get on the grid.”

Fowke testified to Congress in May that demand for electricity in some parts of the U.S. is already outstripping available capacity on the grid. The former CEO of Xcel Energy said that requests from large customers would more than double the current peak demand on the utility’s system.

“It took over 100 years of planning and building to create our current system, and a step-change in infrastructure investment on an accelerated timeline will be required to serve even a fraction of this future demand in a reliable manner,” Fowke told the Senate Committee on Energy and Natural Resources.

The cost of building new infrastructure to meet the demand is expected to reach hundreds of billions of dollars, Fowke said.

In the past, a large manufacturing facility might need 100 megawatts of electricity — equivalent to about 100,000 homes, Fowke told Congress. It is now increasingly common for a single data center to need anywhere from three to 15 times that amount of power, the CEO said.

Dominion Energy regularly gets requests to support data center campuses that require as much as several gigawatts of power, Blue said in May. That’s larger than the average capacity of a nuclear reactor in the U.S.

Going around the grid

One of the many challenges in connecting this kind of demand to the grid is that it can take up to a decade to decide the exact route a transmission line will take, get the necessary permits and build it, Edison Electric Institute senior vice president for customer solutions Phil Dion told Congress in June.

As a result, tech companies that are building data centers are increasingly looking at directly connecting their facilities to large power resources, such as nuclear plants, rather than waiting to access the grid. But that approach is already facing controversy.

Amazon Web Services purchased a data center campus in March from Talen Energy for $650 million that will be powered directly by the Susquehanna nuclear plant in Pennsylvania. It was viewed by some in the industry as a landmark agreement that could pave the way for more nuclear-powered data centers.

But AEP has challenged the agreement before the Federal Energy Regulatory Commission, warning that such arrangements could further constrain supply on the electric grid.

Constellation Energy CEO Joe Dominguez told investors earlier this month that hooking data centers directly to nuclear reactors is the fastest and most cost effective solution. Constellation operates the largest portfolio of nuclear plants in the U.S.

“The notion that you could accumulate enough power somewhere on the grid to power a gigawatt data center is frankly laughable to me,” Dominguez said on Constellation’s August earnings call.

Utility executives have warned that failure to meet rising demand from data centers could affect the entire U.S. economy.

“If I can’t get that power capacity online, I cannot do the data center. I cannot do the manufacturing. I can’t grow the core businesses of some of the largest corporations in the country,” Petter Skantze, vice president of infrastructure development at NextEra Energy Resources, the renewable energy unit of NextEra Energy, said at a conference in New York City in June.

“The stakes are really, really high,” Skantze said. “This is a new environment. We have to get this right.”

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Tech companies want nuclear power. Some utilities are throwing up roadblocks

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A cooling tower at the Constellation Nine Mile Point Nuclear Station in Scriba, New York, US, on Tuesday, May 9, 2023. 

Lauren Petracca | Bloomberg | Getty Images

Tech companies are increasingly looking to directly connect data centers to nuclear plants as they race to secure clean energy to power artificial intelligence, sparking resistance from some utilities over the potential impact on the electric grid.

Data centers, the computer warehouses that run the Internet, in some cases now require a gigawatt or more of power, comparable to the average capacity of a nuclear reactor in the U.S.

The data centers are essential to U.S. economic competitiveness and national security as the country competes with adversaries such as China for supremacy in the race to develop AI, said Joe Dominguez, the CEO of Constellation Energy, which operates the largest nuclear fleet in the U.S.

“When you’re talking about large [demand] load that also wants to use zero-emission energy, you’re going to bring it very close to nuclear power plants,” Dominguez said on Constellation’s second-quarter earnings call Tuesday. Constellation, headquartered in Baltimore, operates 21 of the 93 reactors in the U.S.

Constellation’s shares have surged 62% this year, the sixth-best stock in the S&P 500, as investors attach a higher value to the company’s nuclear power capacity to meet the growth in data centers. Shares of Vistra Corp., based outside Dallas and owner of six reactors, have doubled this year, the second-best performing stock in the S&P after AI chipmaker Nvidia.

Tech companies are building out data centers just as power supply is increasingly constrained due to the retirement of coal plants and as demand is climbing from the expansion of domestic manufacturing and the electrification of vehicles.

The largest grid operator in the U.S., PJM Interconnection, warned in late July that power supply and demand is tightening as construction of new generation lags demand. PJM covers 13 states primarily in the Mid-Atlantic region, including the world’s largest data center hub in northern Virginia.

Constellation’s Dominguez argued that connecting data centers directly to nuclear plants, called co-location by the industry, is the fastest and most cost-effective way to support the buildout of data centers, without burdening consumers with the costs of building new transmission lines.

“The notion that you could accumulate enough power somewhere on the grid to power a gigawatt data center is frankly laughable to me — that you could do that in anywhere that doesn’t start with decades of time,” Dominguez said. “This is an enormous amount of power to go out and try to concentrate.”

Amazon’s nuclear agreement

But co-locating data centers next to nuclear plants already faces controversy.

In March, Amazon Web Services bought a data center powered by the 41-year-old Susquehanna nuclear plant in Pennsylvania from Talen Energy for $650 million . But the agreement to directly sell power to the AWS data center from the nuclear plant already faces opposition from utilities American Electric Power and Exelon, who have filed complaints at the Federal Energy Regulatory Commission (FERC).

AEP and Exelon argue that the deal between Amazon and Talen sets a precedent that will result in less available power in the PJM grid area as resources “flee to serve load that uses and benefits from — but does not pay for — the transmission system”

“This will harm existing customers,” the utilities told FERC in a filing in June. Talen Energy has dismissed the objections as “demonstrably false,” accusing the utilities of stifling innovation.

“The rapid emergence of artificial intelligence and data centers has fundamentally changed the demand for power and leads to an inflection point for the power industry,” Talen said in a June statement. “Talen’s co-location arrangement with AWS brings one solution to this new demand, on a timeline that serves the customer quickly.”

FERC has requested more information on the service agreement between Talen and AWS. The regulator is holding a conference in the fall to discuss issues associated with connecting large electricity loads directly to power plants.

“It really is a great opportunity for there to be interaction between stakeholders and the commissioners in an informal setting like a conference, as opposed to doing so in litigation,” Kathleen Barrón, chief strategy officer at Constellation, said on the power company’s recent earnings call, referring to the fall FERC meeting.

Shopping for nuclear power

Constellation and Vistra have backed the AWS-Talen agreement in filings to FERC, with each of their CEOs saying on their earnings calls this week that co-location and traditional grid connection will be needed to meet demand.

Barrón told CNBC that Constellation has “seen interest from many” tech companies in potentially co-locating a data center at one of its sites.

Vistra is having numerous conversations with customers about co-location and is “in due diligence for a number of sites,” CEO Jim Burke said Thursday. With the dispute in the PJM region over co-location, data center developers may take a closer look at Texas, which operates its own grid called ERCOT, Burke said.

“We’re seeing some interest in Comanche Peak,” Burke told analysts on the company’s second-quarter earnings call, referring to one of Vistra’s nuclear plants. Comanche Peak, about 50 miles outside Fort Worth, Texas, has two reactors with 2.4 gigawatts of capacity, enough to power 1.2 million homes in typical conditions and 480,000 homes in peak periods, according to Vistra.

And Dominion Energy has indicated it is open to connecting a data center to the Millstone nuclear plant in Connecticut. The Dominion service region includes northern Virginia, the epicenter of the data center boom.

“We continue to explore that option,” CEO Robert Blue said on Dominion’s second-quarter earnings call. “We do clearly realize any co-location option is going to have to make sense for us, our potential counterparty and stakeholders in Connecticut.”

Kelly Trice, president of Holtec International, a privately held nuclear company headquartered in Florida, said the U.S. needs to start thinking more about balancing the power needs of data centers with those of all consumers. Holtec is working to restart the Palisades nuclear plant in Michigan and has also had conversations with tech companies about nuclear energy.

“Essentially, the hyperscalers and the data centers can take all the power and the consumer not get any of that if we’re not careful,” Trice told CNBC. “So the balance there, where the consumers actually get what is rightfully theirs too, is a factor.”

“The United States hasn’t really started wrestling [with] that yet,” Trice said. “But I think we’re getting close.”

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Is Western myopia in Libya creating a far worse version of Gaddafi?

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The opinions expressed in this article are those of the author and do not represent in any way the editorial position of Euronews.

If we do not prevent Libya from becoming a mafia state, the trend will not stop at Libya’s borders but become a norm in the region, and especially the Sahel, Hafed Al-Ghwell writes.

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Today, a gridlocked Libya ambles along in an unsettling calm as Russia increases its presence in the region.

Libya continues to unravel quietly, with indications mounting that rival governments are regrouping for something big.

Recently, Italian authorities intercepted a cargo ship suspected of bringing Russian weapons to General Khalifa Haftar in eastern Libya.

The reason being that Russia is arming Haftar in return for allowing Moscow to build a port on the Mediterranean coast, which would give it a base with Italy directly in its sites.

The country remains compromised, not least by its self-assured ruling elites, but also by the unhelpful policy decisions and changing rules of engagement in Western capitals. I fear the consequences will likely birth the country’s next and likely Muammar Gaddafi.

Flip-flopping Western policies

Briefly looking back, we can see that Western approaches toward Libya have undergone noteworthy changes, shifting from narrow security-oriented strategies to facilitating inclusive political settlements.

And, when that failed to secure meaningful progress in restoring the Libyan state, the West subsequently devolved toward a messy strategy of pursuing agreements among Libya’s differing factions.

This new strategy erroneously viewed bargains between the fractious and unelected Libyan elites as a makeshift bridge toward the ultimate goal—peace and stability.

This is a grave miscalculation and a deliberate misreading of fairly obvious dynamics at play in Libya.

By prioritising exclusive bargains, the West inadvertently sponsored the entrenchment of Libya’s kleptocratic governance model that has successfully sidelined the building of key institutions and security sector reform.

At the core of this ill-informed shift in strategy was a severe underestimation of the underlying causes of Libya’s endemic instability and scapegoating of its political deadlock for a stalled state-building process. It also enabled the meteoric rise of “Clan Haftar”.

Small-time CIA asset turned Libya’s biggest strongman

Khalifa Haftar rose to prominence in Libya as a result of his military background and fortuitous alliances.

An ex-officer in Gaddafi’s army and commander of Gaddafi’s armies who tried and failed miserably to invade Chad, Haftar later turned into an opponent, participating in a failed coup before spending years in exile in the United States as a small-time CIA asset.

His return in 2011, followed by a series of events and foreign sponsorships, eventually catapulted Haftar into the larger-than-life figure he has become in Eastern Libya today.

After a failed and humiliating attempt to capture Tripoli with direct support from the UAE, Haftar’s stronghold remained in the east, where he established control through his Libyan Arab Armed Forces (LAAF), a network of alliances with tribal leaders, radical Islamists and other local armed factions with foreign backing, consolidating influence through both military and political manoeuvring.

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A combination of strong anti-Islamist rhetoric, pure brutality, control over significant oil resources, and portraying himself as a bulwark of stability in a chaotic region further solidified his dominance in the eastern part of Libya — much to the delight of an international community exasperated by mounting policy failures in the country.

Despite a controversial background, problematic records of human rights violations, and deepening kleptocracy, Haftar continues to receive clandestine and overt support from various Western countries, including a recent visit with US officials.

France, for instance, valued Haftar’s promise of combating terrorism, stemming migrant flows, and possibly, being an insurance for Paris’ waning control over the Sahel.

Additionally, countries like Italy have been keen on gaining uninterrupted access to Libyan oil by trying to position Rome favourably in a post-conflict scenario and bolster its ambitions to become a Mediterranean energy hub, and Libya plays a prominent role in UAE’s ongoing agenda of gaining influence across North Africa and the Sahel.

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Meanwhile, in Brussels, lavish economic incentives for Libya’s strongmen to control migration have altered the balance of power within the country.

By offering financial incentives to curb migrant flows, the EU is inadvertently subsidising the higher operational costs associated with keeping trafficking routes open, bankrolling Clan Hafar’s management of detention facilities and security operations essential for trafficking, and increasing its control over these illicit markets.

‘Haftar & Sons, Inc’

Beyond Libya’s borders, Clan Haftar turns a hefty profit from more lucrative criminal activities like fuel and drug smuggling, while maintaining a facade of cooperation with Europe to ensure uninterrupted financial flows.

To date, there is no credible accountability mechanism or other means for tracking where profits from illicit activities go, as well as who or what they end up funding.

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Meanwhile, the more resources Haftar and his sons accumulate from its capture of Libya’s state expenditures, the greater its accumulation of power and influence, fostering a deepening personality cult around Clan Haftar.

In a sense, Europe’s and the US’ strategy of reinforcing the very instability and criminality it claims to mitigate is not just an own goal for its policy objectives.

It also perfectly encapsulates the paradox of supposed defenders of democracy, human rights and the rule of law openly crowding behind the antithesis of protection of human rights, political pluralism and consensus government at the expense of Libya’s democratisation prospects.

This trend readily reinforces Clan Haftar’s authoritarian rule. Before its downfall in 2011, the Gaddafi regime was characterised by unrestrained power concentrated in the hands of one individual, with the systematic suppression of dissent and political pluralism while at least maintaining a level of a normal state with public services and security for its people.

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Clan Haftar has already replicated this model in its control of the East. Unchecked, Libya faces the real possibility of becoming a far worse form of an earlier era of personalistic rule, suppressed civil liberties, disappearing political opposition, and a monolithic and mafia-like power structure with no regard to anything else other than the Haftar & Sons Inc while pretending it’s a national army.

The implications are grave

Politically, while some level of order might be achieved in territories under Haftar’s control, the undermining of an inclusive and legitimate central government could perpetuate instability and unrestrained violence, particularly in contested areas.

Socioeconomically, while resource control might bring short-term gains for certain factions, the lack of a unified national vision could hamper long-term development and equitable economic growth.

Citizens, especially in contested or “forgotten” regions, may continue to face issues related to access to basic services, employment opportunities, and investment in infrastructure.

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Beyond Libya, the empowerment of figures like Haftar, with documented ties to criminal networks and a history of human rights abuses, is very concerning. It signals a worrisome precedence for short-termism.

In sum, Western policy towards Libya, characterised by a preference for deal-making with controversial actors like the Haftar clan, is a myopic approach fraught with peril.

A recalibration of this strategy is imperative, one that prioritises the establishment of legitimate political institutions and respect for human rights.

If we do not prevent Libya from becoming a mafia state, the trend will not stop at Libya’s borders but become a norm in its region, and especially the Sahel.

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Hafed Al-Ghwell is the Executive Director of the North Africa Initiative (NAI) and Senior Fellow at the SAIS Foreign Policy Institute (FPI), Johns Hopkins University.

Contact us at [email protected] to send pitches or submissions and be part of the conversation.

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Trump announces Ohio senator JD Vance as his running mate

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At the beginning of the Republican convention, Donald Trump has announced Senator JD Vance of Ohio as his running mate on social media

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Donald Trump announced Ohio senator JD Vance as his running mate on Monday, selecting a former critic who turned loyal ally.

Vance is now the first millennial to join a major-party ticket, addressing concerns about the advanced age of America’s political leaders.

“After lengthy deliberation and thought, and considering the tremendous talents of many others, I have decided that the person best suited to assume the position of vice president of the United States is senator J.D. Vance of the great state of Ohio,” Trump stated in a post on his Truth Social network.

Who is JD Vance?

Senator JD Vance, age 39, gained national recognition with his 2016 memoir, “Hillbilly Elegy”. Elected to the Senate in 2022, he has become a fervent supporter of the former president’s “Make America Great Again” agenda, focusing on trade, foreign policy, and immigration.

However, Vance is relatively inexperienced in national politics and joins the Trump ticket at a critical moment. The assassination attempt on Trump at a rally at the weekend has shaken the campaign, drawing attention to the harsh political climate and underscoring the significance of the vice-presidential role.

Vance faced criticism for a post on X blaming President Joe Biden for the violence following the shooting. “The central premise of the Biden campaign is that President Donald Trump is an authoritarian fascist who must be stopped at all costs,” Vance wrote. “That rhetoric led directly to President Trump’s attempted assassination.”

Law enforcement has yet to identify a motive for the shooting.

Nonetheless, Vance’s selection is expected to energise Trump’s loyal base. He has become a prominent figure in conservative media and frequently clashes with reporters on Capitol Hill, establishing himself as a potential future leader of the Trump movement, possibly in the 2028 presidential election.

However, this choice means the Republican ticket will consist of two white men, even as Trump seeks to appeal to Black and Latino voters.

When did Vance rise?

Vance’s memoir, “Hillbilly Elegy,” detailed life in Appalachian communities that felt disconnected from the Democratic Party, though it faced criticism for oversimplifying rural life and ignoring racism’s role in modern politics.

Vance’s rise coincided with Trump’s unexpected ascent from reality TV star to president.

Initially a critic, calling Trump “a total fraud” and “America’s Hitler,” Vance eventually shifted his stance, becoming one of Trump’s most ardent supporters. “I didn’t think he was going to be a good president,” Vance recently told Fox News Channel. “He was a great president. And it’s one of the reasons why I’m working so hard to make sure he gets a second term.”

During his 2022 Senate campaign, Vance received Trump’s endorsement, which helped him secure victory in both the Republican primary and the general election.

He is also close to Trump’s son, Donald Jr. As a senator, Vance has defended Trump against various legal challenges and questioned the legitimacy of the 2020 election results, suggesting he would have supported multiple slates of electors and congressional resolution on January 6, 2021.

Despite widespread claims of voter fraud in the 2020 election, judges, election officials from both parties, and Trump’s own attorney general found no evidence of significant fraud.

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Vance’s book — subtitled “A Memoir of a Family and Culture in Crisis”, published as Trump was first running for president, earned Vance a reputation as someone who could help explain the maverick New York businessman’s appeal in middle America, and especially among the working class, rural white voters who helped Trump win the presidency.

The memoir, recounting Vance’s challenging upbringing in Middletown, Ohio, and eastern Kentucky, was adapted into a 2020 film directed by Ron Howard, starring Amy Adams and Glenn Close.

Encouraged by his grandmother, Vance served in the Marine Corps, graduated from Ohio State University and Yale Law School, and worked in a Silicon Valley investment firm before returning to Ohio. He launched a nonprofit, Our Ohio Renewal, to develop opioid addiction treatments, though it ultimately failed and was criticised as a front for his political ambitions.

As a senator, Vance has shown some willingness to work across the aisle, collaborating with Ohio’s senior senator, Democrat Sherrod Brown, on several issues, including securing funding for a $20 billion Intel chip facility and introducing rail safety legislation following a train derailment in East Palestine, Ohio.

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Leading voice for the conservatives or an extremist?

Kevin Roberts, president of the conservative Heritage Foundation, called Vance a leading voice for the conservative movement, particularly on shifting away from interventionist foreign policy and free market economics. Democrats label him an extremist due to his provocative positions, which he sometimes later amends. For example, Vance initially supported a national 15-week abortion ban during his Senate run but softened his stance after Ohio voters backed a 2023 abortion rights amendment.

Regarding the 2020 election, Vance stated he wouldn’t have immediately certified the results if he had been vice president, aligning with Trump’s grievances. Despite numerous investigations finding no significant election fraud, Vance continues to echo Trump’s conditions on honouring the 2024 election results.

People familiar with the vice-presidential vetting process noted that Vance brings debating skills, fundraising capabilities, and the ability to articulate Trump’s vision to the GOP ticket. Charlie Kirk, founder of Turning Point USA, said Vance compellingly articulates the America First worldview and could help Trump in key states like Michigan and Wisconsin.

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EU and world leaders react after failed assassination attempt on Trump

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Reactions have been coming in from shocked European and world leaders, with many deploring the attack and saying violence has no place in politics.

EU Leaders React

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Reactions have been coming in from European leaders, with many expressing their sympathy for Donald Trump and condemning the US election campaign’s descent into violence.

The assassination attempt left one attendee dead and critically injured two others.

Trump’s campaign said the presumptive Republican nominee was doing “fine” after being whisked off the stage though the shooting pierced the upper part of his right ear.

President of the EU Commission Ursula von der Leyen said “political violence has no place in a democracy,” whilst French President Emmanuel Macron posted that “it is a tragedy for our democracies.”

Italy’s Prime Minister Giorgia Meloni also posted on X.

“My solidarity and my best wishes for a speedy recovery go to him, with the hope that the next few months of the electoral campaign will see dialogue and responsibility prevail over hatred and violence.”

The political leader Trump is closest too in Italy however is Matteo Salvini, the far-right leader of the League Party. He posted: “Stronger than everything and everyone. We wish him a speedy recovery. This is the president America needs.”

Hungarian Prime Minister Viktor Orban, who is an ally of Trump, spoke of “dark hours.”

In the Netherlands the leader of the far-right Freedom Party blamed “hate rhetoric” coming from leftist politicians.

German Chancellor Olaf Scholz described the attack in a post on X as “despicable.”

“The attack on US presidential candidate Donald Trump is despicable. I wish him a speedy recovery. My thoughts are also with those who were affected by the attack. Such acts of violence threaten democracy.”

NATO’s Secretary-General Jens Stoltenberg also condemned the attack.

Spain’s President Pedro Sanchez posted on X:

“I want to convey my strongest condemnation of the attack suffered by Donald Trump during a rally in Pennsylvania. Violence and hatred have no place in a democracy. My best wishes for a speedy recovery to former President Trump and the rest of the injured and my sincere condolences to the family of the deceased.

Polish prime minister Donald Tusk posted that “violence is never the answer to political differences in a democracy.”

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And Ukraine’s president Volodymr Zelenskyy posted that “never should violence prevail.”

He said in 2022 that there have been at least 10 attempts to assassinate him by Russia.

Slovak prime minister Robert Fico, was himself the target of an assassination attempt in May, posted on Facebook: “It’s a carbon copy of the script. Trump’s political opponents are trying to shut him down. When they fail, they incite the public until some poor guy takes up arms.”

A gunman shot Fico five times as he greeted supporters in the town of Handlova in May, and now has to manage some permanent health issues. He underwent a five-hour surgery to treat multiple wounds he suffered in the shooting, followed by another two-hour surgery two days later to remove dead tissue from his gunshot wounds.

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Austrian Chancellor Karl Nehammer said on social media platform X that he was appalled by the attempt and wished Trump a quick and full recovery.

“Political violence has no place in our society! My thoughts are with all the victims of this attack!” he said.

The UK’s prime minister, Keir Starmer, also condemned the attack.

World Leaders React

The Kremlin said on Sunday that U.S. President Joe Biden’s administration created an atmosphere around presidential candidate Donald Trump that provoked an attack on him.

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“The atmosphere that was created by this administration was created during the political struggle, the atmosphere around candidate Trump, it was exactly this that provoked what America is facing today. After numerous attempts to remove candidate Trump from the political arena using at first legal instruments like courts, the prosecutor’s office, attempts to politically discredit and compromise the candidate, it was obvious to all outside observers that his life was in danger,” Dmitry Peskov commented.

Israeli Prime Minister Benjamin Netanyahu said on X: “Sara and I were shocked by the apparent attack on President Trump. We pray for his safety and speedy recovery.”

China’s Foreign Ministry has put out a statement saying: “Chinese President Xi Jinping expressed his sympathy and solidarity with former U.S. President Donald Trump following the shooting at the rally in Pennsylvania.”

Australian Prime Minister Anthony Albanese condemned the attempted assassination as an inexcusable attack on the United States and Australia’s shared democratic values.

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“In Australia, as in the United States, the essence and the purpose of our democracies is that we can express our views, debate our disagreements and resolve our differences peacefully,” Albanese told reporters in the Australian Parliament House.

Brazil’s President Luiz Inácio Lula da Silva said on X that the attack must be “strongly repudiated” by all democracy defenders and dialogue in politics, calling the incident unacceptable.

Canada’s Prime Minister Justin Trudeau posted on X saying that he was sickened by the shooting and his thoughts were with Trump, those at the event and all Americans.

“It cannot be overstated — political violence is never acceptable,” he wrote.

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Egyptian President Abdelfattah El Sissi expressed concern and stressed his country’s condemnation of the attack in a statement.

“I express my wishes for Trump’s speedy recovery and for the US election campaigns to be resumed in a peaceful and healthy atmosphere, free of any aspects of terrorism, violence, or hatred,” he said.

India’s Prime Minister Narendra Modi said on X that he was deeply concerned by “the attack on my friend.”

Mexico’s president Andrés Manuel López Obrador denounced the attack on X and said “violence is irrational and inhumane.”

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South Korea’s President Yoon Suk Yeol said on X that he was appalled by “the hideous act” of political violence. He added the people of Korea stand in solidarity with Americans.

Taiwan’s president Lai Ching-te wished Trump a speedy recovery and said his thoughts and prayers are with Trump on X. He said political violence of any form is never acceptable “in our democracies” and offered his condolences to the victims.

Venezuelan President Nicolas Maduro, who has an adversarial relationship with Trump, said during a campaign event broadcast on state television that he wished him a speedy recovery: “May God bless the people of the United States and give them peace and tranquility. We have been adversaries, but I wish President Trump health and long life, and I repudiate that attack.”

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Trump shot in the ear in assassination attempt at Pennsylvania rally

Post By World , ,

“I knew immediately that something was wrong in that I heard a whizzing sound, shots, and immediately felt the bullet ripping through the skin,” Trump wrote on his social media site.

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On the heels of an apparent attempt to kill him, former President Donald Trump called Sunday for unity and resilience as shocked leaders across the political divide recoiled from the shooting that left him injured but “fine” and the gunman and a rally-goer dead.

In a social media post, Trump said he was “shot with a bullet that pierced the upper part of my right ear.” The former president was quickly whisked from the stage by Secret Service agents, his ear covered in blood.

A prosecutor said the suspected gunman and at least one attendee are dead, and the Secret Service said two spectators were critically injured.

In the post on his social media network, former President Donald Trump said that “In this moment, it is more important than ever that we stand United, and show our True Character as Americans, remaining Strong and Determined, and not allowing Evil to Win,” he adds.

The FBI early Sunday named Thomas Matthew Crooks, 20, of Bethel Park, Pennsylvania, as the shooter in the assassination attempt on former President Donald Trump. The agency said the investigation remains active and ongoing.

The political leanings of Crooks were not immediately clear. Records show Crooks was registered as a Republican voter in Pennsylvania, but federal campaign finance reports also show he gave $15 to a progressive political action committee on Jan. 20, 2021, the day President Joe Biden was sworn in to office.

One attendee was killed and two spectators were critically injured, authorities said. All were identified as men. The Secret Service said it killed the suspected shooter — who it said attacked from an elevated position outside the rally venue, a farm show in Butler, Pennsylvania — and said Trump was safe.

The attack was the most serious attempt to assassinate a president or presidential candidate since Ronald Reagan was shot in 1981. It drew new attention to concerns about political violence in a deeply polarised U.S. less than four months before the presidential election. And it could alter the tenor and security posture at the Republican National Convention, which will begin Monday in Milwaukee.

Organisers said the convention would proceed as planned.

Trump flew to New Jersey after visiting a local Pennsylvania hospital, landing shortly after midnight at Newark Liberty International Airport. Video posted by an aide showed the former president deplaning his private jet flanked by U.S. Secret Service agents and heavily armed members of the agency’s counter assault team — an unusually visible show of force by his protective detail.

President Joe Biden, who is running against Trump, was briefed on the incident and spoke to Trump several hours after the shooting, the White House said.

“There’s no place in America for this type of violence,” the president said in public remarks. “It’s sick. It’s sick.”

Biden planned to return to Washington early, cutting short a weekend at his beach home in Rehoboth Beach, Delaware.

Many Republicans quickly blamed the violence on Biden and his allies, arguing that sustained attacks on Trump as a threat to democracy have created a toxic environment. They pointed in particular to a comment Biden made to donors on July 8, saying “it’s time to put Trump in the bullseye.”

In the coming days, much of the focus will shift to the shooter and security lapses. The shooter was not an attendee at the rally and was killed by U.S. Secret Service agents, according to two officials who spoke to the Associated Press on the condition of anonymity to discuss the ongoing investigation.

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The officials said the shooter was engaged by members of the U.S. Secret Service counterassault team. The heavily armed tactical team travels everywhere with the president and major party nominees and is meant to confront any active threats while other agents focus on safeguarding and evacuating the person at the centre of protection.

Law enforcement recovered an AR-style rifle at the scene, according to a third person familiar with the matter who spoke on condition of anonymity to discuss the ongoing investigation.

An AP analysis of more than a dozen videos and photos from the scene of the Trump rally, as well as satellite imagery of the site, shows the shooter was able to get astonishingly close to the stage where the former president was speaking. A video posted to social media and geolocated by the AP shows the body of a person wearing grey camouflage lying motionless on the roof of a building at AGR International Inc., a manufacturing plant just north of the Butler Farm Show grounds where Trump’s rally was held.

The roof where the person lay was less than 150 metres from where Trump was speaking, a distance from which a decent marksman could reasonably hit a human-sized target. For reference, 150 metres is a distance at which U.S. Army recruits must hit a scaled human-sized silhouette to qualify with the M-16 rifle. The AR-15, like the shooter at the Trump rally had, is the semi-automatic civilian version of the military M-16.

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Asked at the press conference whether law enforcement did not know the shooter was on the roof until he began firing, Kevin Rojek, Special Agent in Charge of the FBI’s Pittsburgh Field Office, responded that “that is our assessment at this time”

“It is surprising” that the gunman was able to open fire on the stage before the Secret Service killed him, he added.

Homeland Security Secretary Alejandro Mayorkas, whose department oversees the Secret Service, said officials were engaged with the Biden and Trump campaigns and “taking every possible measure to ensure their safety and security.”

Trump was showing off a chart of border crossing numbers when the gunfire began after 6:10 p.m.

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As the first pop rang out, Trump said, “Oh,” and the raised his hand to his right ear and looked at it, before quickly crouching to the ground behind his lectern. The people in the stands behind him also crouched down as screams rang through the crowd.

Someone could be heard near the microphone saying, “Get down, get down, get down, get down!” as agents rushed to the stage. They piled atop the former president to shield him with their bodies, as is their training protocol, as other agents took up positions on stage to search for the threat.

Screams were heard in the crowd of several thousand people. A woman screamed louder than the rest. Afterward, voices were heard saying “shooter’s down” several times, before someone asked “are we good to move?” and “are we clear?” Then, someone ordered, “Let’s move.”

Trump could be heard on the video saying at least twice, “Let me get my shoes, let me get my shoes,” with another voice heard saying, “I’ve got you sir.”

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Trump got to his feet moments later and could be seen reaching with his right hand toward his face, which was smeared with blood on his face. He then pumped his fist in the air and appeared to mouth the word “Fight” twice his crowd of supporters, prompting loud cheers and then chants of “USA. USA. USA.”

The crowd cheered as he got back up and pumped his fist.

His motorcade left the venue moments later. Video showed Trump turning back to the crowd and raising a fist right before he was put into a vehicle.

“Everybody went to their knees or their prone position, because we all knew, everyone becoming aware of the fact this was gunfire,” said Dave McCormick, the Republican candidate for U.S. Senate in Pennsylvania, who was sitting to Trump’s right on stage.

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As he saw Trump raise his fist, McCormick said, he looked over his shoulder and noticed someone had been hit while sitting in the bleachers behind the stage.

Eventually, first responders were able to carry the injured person out of a large crowd so he could get medical care, McCormick said.

Reporters covering the rally heard five or six shots ring out and many ducked for cover, hiding under tables. After the first two or three bangs, people in the crowd looked startled, but not panicked. An AP reporter at the scene reported the noise sounded like firecrackers at first or perhaps a car backfiring.

When it was clear the situation had been contained and that Trump would not be returning to speak, attendees started filing out of the venue. One man in an electric wheelchair got stuck on the field when his chair’s battery died. Others tried to help him move.

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Police soon told the people remaining to leave the venue and Secret Service agents told reporters to get “out now. This is a live crime scene.”

Two firefighters from nearby Steubenville, Ohio, who were at the rally told the AP that they helped people who appeared injured and heard bullets hitting broadcast speakers.

“The bullets rattled around the grandstand, one hit the speaker tower and then chaos broke. We hit the ground and then the police converged into the grandstands, said Chris Takach.

“The first thing I heard is a couple of cracks,” Dave Sullivan said.

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Sullivan said he saw one of the speakers get hit and bullets rattling and, “we hit the deck.”

He said once Secret Service and other authorities converged on Trump, he and Takach assisted two people who may have been shot in the grandstand and cleared a path to get them out of the way.

“Just a sad day for America,” Sullivan said.

“After we heard the shots got fired, then the hydraulic line was spraying all around, you could see the hydraulic fluid coming out of it. And then the speaker tower started to fall down,” Sullivan said. “Then we heard another shot that, you could hear, you knew something was, it was bullets. It wasn’t firecrackers.”

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Later Trump was videoed walking down the steps of his plane at Newark Liberty International Airport with a beefed up security detail.

He plans to spend Sunday night at his private golf club in New Jersey.

The perils of campaigning took on a new urgency after the assassination of Robert F. Kennedy in California in 1968, and again in 1972 when Arthur Bremer shot and seriously hurt George Wallace, who was running as an independent on a campaign platform that has sometimes been compared to Trump’s. That led to increased protection of candidates, even as the threats persisted, notably against Jesse Jackson in 1988 and Barack Obama in 2008.

Presidents, particularly after the assassination of John F. Kennedy in 1963, have even greater layers of security. Trump is a rarity as both a former president and a current candidate.

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North Dakota Gov. Doug Burgum, Florida Sen. Marco Rubio and Ohio Sen. JD Vance, the three men on Trump’s shortlist for vice president, all quickly sent out statements expressing concern for the former president, with Rubio sharing an image taken as Trump was escorted off stage with his fist in the air and a streak of blood on his face along with the words “God protected President Trump.”

Pennsylvania Gov. Josh Shapiro, a Democrat, said in a statement on X that he had been briefed on the situation and Pennsylvania state police were on hand at the rally site.

“Violence targeted at any political party or political leader is absolutely unacceptable. It has no place in Pennsylvania or the United States,” he said.

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Over-reliance on gas delays G7 transition to net-zero power

Post By Politics , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Three years ago, G7, a group of major industrialized countries that includes Canada, France, Germany, Italy, Japan, the United Kingdom and the United States, committed to decarbonizing their power systems by 2035. It was a historic and hopeful moment, in which the group demonstrated global leadership, and made a first step toward what needs to become an OECD-wide commitment, according to the recommendation made by the International Energy Agency in its 2050 Net Zero Emission Scenario, setting the world on a pathway to keep global warming below 1.5 degrees.

As we approach the 2024 G7 summit, the ability of G7 countries to deliver on their power systems decarbonization commitment, not least to address the still-lingering fossil fuel price and cost-of-living crisis, but also to retain their global energy transition leadership, is put under scrutiny. So far, the G7 countries’ actual progress toward this critical goal is a mixed picture of good, bad, and ugly, as new analysis shows.

via G7 Power Systems Scorecard, May 2024, E3G

Most G7 countries are making steps on policy and regulatory adjustments that will facilitate a managed transition.

Grid modernization and deployment is, for example, finally starting to receive the attention it deserves. Some countries, such as the U.S., are also starting to address the issue of long-duration energy storage, which is crucial for a renewables-based power sector.

Coal is firmly on its way out in all G7 countries, except Japan, which is lagging behind its peers. This is where the challenges begin, as things like Japan’s unhealthy relationship with coal risk undermining credibility of the whole group as world leaders on energy transition.

Despite these efforts, all G7 countries are delaying critical decisions to implement transition pathways delivering a resilient, affordable and secure fossil-free power system where renewables – mostly wind and solar – play the dominant role. A tracker by campaign groups shows that other European countries have already engaged firmly in that direction.

Progress made so far is neither uniform, nor sufficient.

Further gaps vary by country, but overall, more action is needed on energy efficiency, non-thermal flexibility solutions, and restructuring power markets to facilitate higher renewable electricity and storage uptake. The EU’s recently adopted power market reform provides a solid framework for changes in this direction, at least for the EU-based G7 countries, but it remains to be seen how the EU’s new rules are going to be implemented on the national level.

Overall: Progress made so far is neither uniform, nor sufficient. For one, translation of the G7-wide target into a legislated national commitment is lacking in most G7 countries, in Europe and beyond. Moreover, the chance of G7 countries reaching their 2035 target is at risk, along with their global image as leaders on the energy transition, due to the lack of a clear, time-bound and economically-sound national power sector decarbonization roadmaps. Whether 100 percent or overwhelmingly renewables-based by 2035, today’s power systems will need to undergo an unprecedented structural change to get there.

For this change to take off, clear vision on how to decarbonize the ‘last mile’ while providing for a secure, affordable and reliable clean electricity supply, is crucial. Regrettably, today’s G7 long-term vision is betting on one thing: Gas-fired back-up generation. While there are nascent attempts to address the development of long-term storage, grids, flexibility and other balancing solutions, the key focus in most G7 countries is on planning for a massive increase in gas capacity.

Whether 100 percent or overwhelmingly renewables-based by 2035, today’s power systems will need to undergo an unprecedented structural change to get there.

All G7 countries but France have new gas power plants in planning or construction, with the growth shares the biggest in three European countries: Italy’s planning to boost its gas power fleet by 12 percent, the U.K. by 23.5 percent, and Germany by a whopping 28 percent. The US, which consumes one quarter of global gas-in-power demand, has the largest project pipeline in absolute terms – 37.8GW, the fourth largest pipeline in the world.

This gas infrastructure build-out contradicts the real-economy trend: In all European G7 countries gas demand has been dropping at least since the 2021-2022 energy crisis, driven particularly by the power sector decarbonization. Japan’s gas demand peaked in 2007, and Canada’s in 1996 (see IEA gas consumption data). Even G7 governments’ own future energy demand projections show further drop in gas demand by 2030, by one-fifth to one-third of today’s levels in all European G7 countries and Japan, and at least by 6-10 percent in Canada and the U.S.

Maria Pastukhova | Programme Lead – Global Energy Transition, E3G

Most G7 countries argue that this new gas power fleet will be used at a much lower capacity factor as a back-up generation source to balance variable renewables. Some, for example Germany, incentivize new gas power capacity build-out under the label of ‘hydrogen readiness’, assuming that these facilities will run on low-carbon hydrogen starting in 2035. Others, for example Japan or the U.S., are betting on abating gas power generation with carbon capture and storage technologies in the long-term.

Keeping gas power infrastructure in an increasingly renewables-based, decentralized power system using technology that may or may not work in time is a very risky gamble to take given the time left.

G7 countries have got no more than a decade left to act on their commitment to reach net-zero emissions power systems. We have readily-available solutions to deliver the major bulk of the progress needed: Grids, renewables, battery, and other short and mid-duration storage, as well as efficiency improvements. These technologies need to be drastically scaled now, along with additional solutions we will need by 2035, such as long-duration energy storage, digitalization, and educating skilled workers to build and operate those new power systems.

While available and sustainable, these solutions must be deployed now to deliver in time for 2035. Going forward, G7 can’t afford to lose any more time focusing on gas-in-power, which is on the way out anyway and won’t bring the needed structural transformation of the power system.



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Jeep reveals all-electric Wagoneer S in EV offensive, starting at $72,000

Post By Business , , , , , , ,

2024 Jeep Wagoneer S EV

Jeep

NEW YORK – The first all-electric Jeep SUV for the U.S. will be the 2024 Wagoneer S, starting at about $72,000 when it’s scheduled to go on sale this fall.

The Stellantis-owned brand revealed the vehicle and pricing Thursday, portraying it as a “new chapter” for the quintessential American SUV brand that has struggled with domestic sales in recent years.

“This represents a lot. It is the first global [all-electric vehicle] built in North America, designed in the U.S. … for the world,” Jeep CEO Antonio Filosa told CNBC during an interview after revealing the vehicle. “It is a milestone in our history.”

Filosa, who started leading Jeep in December, said the brand is in “fantastic shape” but it’s in the midst of a “transition like all the automotive brands nowadays” involving electrification.

Despite a slower than expected adoption of EVs in the U.S., Filosa said the brand is not worried about consumer adoption because its additive to the Jeep’s lineup, which will continue to offer traditional gas-powered SUVs, plug-in hybrid electric vehicles and “extended-range” electric vehicles starting next year.

Jeep Wagoneer S EV concept

Michael Wayland / CNBC

A “Launch Edition” of the Wagoneer S will initially be available with a 400-volt, 100-kilowatt-hour battery pack capable of more than 300 miles on a single charge, 600 horsepower and 617 pound-feet of torque for a 0-60 mph acceleration of 3.4 seconds. It is capable of charging from 20%-80% in 23 minutes using a DC Fast charger, according to the company.

Jeep also revealed a Trailhawk off-road performance concept of the EV, which Filosa said “hopefully soon will become a product.”

Filosa said less expensive models of the Wagoneer S will start being released roughly six months after the Launch Edition.

The $71,995 starting price of the Wagoneer S EV sits between gas-powered versions of the Wagoneer, starting at about $63,000, and more luxurious Grand Wagoneer, starting at roughly $92,000.

Jeep also will introduce a new unnamed midsize SUV next year to replace its discontinued Cherokee, Filosa said.

2024 Jeep Wagoneer S EV

Jeep

He also said the company will release electric, extended-range versions of the traditional gas-powered Wagoneer and Grand Wagoneer in 2025. The technology, which uses an engine as a gas-powered generator in addition to EV batteries, is expected to debut on the upcoming Ram Ramcharger pickup truck.

U.S. EV offensive

The Wagoneer S is the beginning of what Stellantis CEO Carlos Tavares this week called the automaker’s EV offensive for the U.S., including six to eight all-electric vehicles this year.

“There is a huge amount of opportunities here in the U.S. We are just starting the offensive of our electrification,” Tavares said Wednesday during a Bernstein investor conference.

For Jeep, the Wagoneer S is expected to be followed by a Wrangler-inspired off-road vehicle called the Recon later this year and a new roughly $25,000 EV “very soon,” Tavares said Wednesday without disclosing additional details.

Stellantis CEO Carlos Tavares holds a news conference after meeting with unions, in Turin, Italy, March 31, 2022.

Massimo Pinca | Reuters

For years, Tavares has been outspoken about the company being forced to produce EVs, which cost 40% more, due to regulatory requirements and not consumer demand. On Wednesday, he described EVs as a “cost-cutting exercise” to ensure the vehicles are profitable.

The EVs are a shift for Jeep in the U.S., where the brand has been focusing on plug-in hybrid electric vehicles, or PHEVs, such as its Wrangler and Grand Cherokee SUVs. The plug-in vehicles accounted for 17.5% of Jeep’s sales this year.

Filosa said Jeep, which is currently No. 1 in PHEVs in the U.S., expects to continue growing sales of those vehicles in addition to the upcoming EVs.

“Electrification to us so far has been working very, very well. Basically,” he said during the reveal event, “we built the PHEV industry. We own this part of the market.

 Jeep Wagoneer S Trailhawk EV concept

Michael Wayland / CNBC

Stellantis’ total PHEV U.S. sales last year was nearly 143,000, up 124% compared to 2022. Leading the way was Jeep, including 67,429 Jeep Wrangler and 45,684 Jeep Grand Cherokee “4xe” SUVs.

Jeep is using 4xe badging as a play on the brand’s off-road reputation combined with electrification, including EVs and PHEVs.

Wagoneer S

The Wagoneer S is Jeep’s first “global” EV, according to the company. The Jeep brand’s first EV model called the Avenger, a small SUV starting at about 35,000 euros, or about $37,800, went on sale last year in Europe.

The Wagoneer S, which will be produced at a plant in Mexico, is based on Stellantis’ large EV platform, which is expected to underpin eight vehicles for the company from 2024-2026.

2024 Jeep Wagoneer S EV “R-Wing”

Jeep

Despite sharing the “Wagoneer” name with Jeep’s current gas-powered model, the five-passenger, two-row EV shares little with its three-row traditional internal combustion engine counterpart other than some Jeep styling.

The most notable difference on the exterior is a more modern interpretation of the brand’s iconic seven-slotted grille, which the EV doesn’t actually need for cooling. It’s indented and the slots are solid and interconnected with one another compared to seven separate slots.

“We reinvented the traditional seven-slot grille,” said Ralph Gilles, Stellantis head of design. “I am so damn proud of this.”

The Wagoneer S also features a large “R-Wing,” an open spoiler on the back of the SUV. Gilles said the goal was to not make a “jellybean” like many EVs with good aerodynamics currently being sold in the U.S.

The Wagoneer S is far less boxy that the gasoline model, assisting in it in being the most aerodynamic Jeep ever produced by the brand, the company said.

Stellantis design chief Ralph Gilles during the unveiling of the Jeep Wagoneer S EV on May 30, 2024 in New York City.

Michael Wayland / CNBC

Gilles said the Wagoneer name is more representative of the luxuriousness of the vehicle rather than a singular design.

Inside the vehicle more than 45 inches of screens, including a 12.3-inch center display, and a mix of metal, fake leather and other sustainable materials.

Gilles, a longtime renowned car designer with the company, said wood was banned from the interior of the vehicle. It also doesn’t feature any chrome on the exterior of the SUV. Those decisions were made following input from younger designers to make the vehicle more sustainable and attractive for more youthful buyers.

“If this is going to be a green vehicle, we had to rethink the materials inside,” Gilles said. “There was a huge push for sustainable materials everywhere.”

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The bonds that bind: Our adversarial sovereign bond habit

Post By World , , , , ,

The opinions expressed in this article are those of the author and do not represent in any way the editorial position of Euronews.

No one is obligated to help China fund its war machine. The decision to buy Chinese sovereign bonds should reside with informed investors, Elaine Dezenski and Joshua Birenbaum write.

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In Chinese President Xi Jinping’s recent visit to Serbia, he extolled bonds “forged with blood” between the two countries from NATO’s bombing of Belgrade. 

Yet, it is concerns over future aggression, not past wars, that have the world focused on China. 

The Biden administration, the US Congress, and other governments have raised alarms about China’s military build-up, arguing that Western investors should not be sending money to Chinese companies that are helping to support the People’s Liberation Army (PLA). 

As the UK non-profit Hong Kong Watch explained in a statement before the House of Lords: “China’s strategy of military-civil fusion ensures that unchecked institutional investment could directly counter Britain’s national security interests if British pensions funds and other major players are funding firms in partnership with the Chinese military.”

Direct investment in private Chinese companies supporting the PLA is a serious risk. Yet a far larger pool of Western investments is flowing directly to the state budget of the People’s Republic of China (PRC) through the purchase of Chinese sovereign bonds, funding whatever the PRC budget may prioritise — from Chinese battleships and EV subsidies to concentration camps.

How do sovereign bonds contribute to China’s defence spending?

Chinese defence spending, which has doubled since 2015, is paid for from the state budget, which is, in turn, funded by numerous sources, including the issuance of sovereign bonds. 

Those bonds are often passively purchased by global investors based upon their default inclusion in funds that follow key benchmarks, sending vast quantities of money to China with little oversight or awareness of China’s military benefits.

Chinese sovereign bonds are bought by major institutional investors and individual mutual fund owners alike. These investors are rarely making an intentional choice to invest in China. Rather, huge swaths of the market passively base their portfolio composition on aggregated benchmarks. 

The default options on many retirement plans, for instance, are target date plans based upon predetermined mixes from established indexes — one of the risks of what The Wall Street Journal has described as “retirement funds on autopilot”. Indeed, one of the purported benefits of so-called “passive investing” — which now makes up the majority of the market — is its strict adherence to the benchmarks.

Until relatively recently, China’s sovereign bonds were excluded from the global indexes. Then, starting in 2017, a handful of index providers began adding Chinese government bonds to their bond benchmarks. In 2018, MSCI changed its equities index to include Chinese stocks. 

As The Wall Street Journal noted at the time, “In 2018, more than $13.9 trillion (€12.85tr) in investment funds had stock portfolios that mimic the composition of MSCI indexes or used them as performance yardsticks, and nearly all investments by US pension funds in global stocks are benchmarked against MSCI indexes.”

Benchmarks, which are designed to give a representative and diversified slice of the market, have become the unelected arbiters of whether given stocks or bonds are held by all funds that are pegged to the index. 

This decision to add Chinese investments to global benchmarks caused a cascade effect as passive investment funds and others who tied their portfolio to the benchmark followed suit, sending billions of dollars directly to the Chinese state. 

FTSE Russell, a global provider of benchmarks, explained the issue this way: “Fund managers seeking to match, or outperform, benchmark indexes are therefore obliged to increase the weightings in Chinese bonds.”

What is the role of index providers in all of this?

Index providers are for-profit companies, with those profits inextricably linked to the decision of what to include in the benchmarks. 

When MSCI, one of the world’s largest index providers, initially resisted adding Chinese stocks to its benchmark, Beijing threatened to cut off MSCI’s access to critical pricing data in a move described as “business blackmail.” MSCI relented and included the Chinese stocks.

Index providers aren’t motivated only by threats. Bloomberg, Citigroup, and others garnered benefits for adding Chinese bonds to their benchmarks, including receiving a bond settlement license from China. 

That pivot, made on behalf of millions of investors, fundamentally realigned capital toward authoritarian regimes. As The New York Times said at the time about Citigroup’s decision to lead the pack into the Chinese sovereign bond market, “That is a propaganda victory for Beijing, which has struggled to entice foreign investors. For Citigroup, it is a relatively low-risk diplomatic win.”

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When Bloomberg and other companies added Chinese bonds to their indexes, it was estimated that Chinese securities would account for just over 5% of Bloomberg’s $53tr (€49tr) Global Aggregates bond index, but those numbers have substantially increased since then. 

Today, the Bloomberg index allocates nearly 10% of its $65 trillion Global Aggregates benchmark to Chinese bonds.

No one is obligated to fund Beijing’s war machine

The adversarial bond issue is a market problem with market solutions. Numerous indexes already exclude Chinese bonds (called “ex-China” indexes), but those are limited products that are marketed to clients who must proactively direct their fund managers to include them. Rather, ex-China benchmarks should be the default.

Clients could be permitted, consistent with sanctions and other restrictions, to add those bonds in, but passive investment flows should not be blindly directed to adversarial regimes. Similarly, default options for retirement plans and passive investments should not be funnelled to the Chinese war machine.

Improving the hygiene of financial markets is a necessity, starting with a much deeper discussion about how key decisions — like the inclusion of adversarial bonds in benchmark indexes — impact investors, the global financial system, and the economic security of democratic governments.

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No one is obligated to help China fund its war machine. The decision to buy Chinese sovereign bonds should reside with informed investors.

Elaine Dezenski is Senior Director and Head of the Center on Economic and Financial Power at the Foundation for Defense of Democracies (FDD). She was formerly an acting and deputy assistant secretary for policy at the US Department of Homeland Security. Joshua Birenbaum is Deputy Director of the Center on Economic and Financial Power at the FDD.

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