European EV Sales Overtake Gas for the First Time

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THE TOP FIVE

1. European EV sales overtake gas for the first time

Workers assemble Volkswagen's ID.3 electric car on a production line at German car factory. Jens Schlueter/Getty Images

Sales of electric vehicles in Europe surged 30% to a record high last year, with battery-powered models outselling gas-burning cars for the first time last month, the Financial Times reported. The increase came despite a 38% drop in Tesla’s annual sales on the continent as Chinese rival BYD zoomed past Elon Musk’s automaker. Electric vehicles now account for 17% of EU car sales, up from 14% in 2024.

Tesla, meanwhile, is shifting gears. During a quarterly earnings call Wednesday evening, Musk announced plans to end production of the Model S sedan, its first fully original car design, and Model X SUV. “It’s time to basically bring the Model S and X programs to an end with an honorable discharge, because we’re really moving into a future that is based on autonomy,” he said. “So if you’re interested in buying a Model S and X, now would be the time to order it.” He said he would continue offering support for the existing models “for as long as people have the vehicles.” The big seller in the quarter, however, wasn’t any car at all. The company sold a record number of its utility-scale Megapack batteries. In a shareholder deck, the company told investors it had “achieved our highest quarterly energy storage deployments, driven by record Megapack deployments.” That brought revenue from the energy sector up 27% from 2024 to $12.8 billion.

2. Trump administration secretly rewrites safety rules for nuclear reactors

The Department of Energy has overhauled a set of nuclear safety rules and shared them with companies it’s regulating without making the changes public. Citing leaked documents, NPR reported Wednesday that the agency had cut more than 750 pages from earlier versions of the rules, “leaving only about one-third of the number of pages in the original documents.” The changes include loosening rules on monitoring radiation leaks in groundwater and raising the threshold for an accident investigation. When I asked Emmet Penney, a nuclear historian and a senior fellow at the right-leaning Foundation for American Innovation, what he made of the report, he said the cuts eliminated a number of dubiously useful rules, including reducing how much security is required at nuclear stations, and praised Secretary of Energy Chris Wright. “Reducing costs burdens like unnecessary security for test reactors is a smart move from the DOE, as is clarifying vague radiation standards,” he told me. “These changes demonstrate Secretary Wright’s seriousness when it comes to catalyzing the nuclear renaissance.”

Also on Wednesday, the Energy Department announced a new initiative asking states to express interest in hosting “Nuclear Lifecycle Innovation Campuses,” where companies across the nuclear fuel cycle could set up shop, including recycling used fuel.

3. Utilities asked for a lot of ratepayer money last year

Electric and gas utilities requested almost $31 billion worth of rate increases last year, according to a new analysis by the energy policy nonprofit PowerLines. That compares to $15 billion in 2024. “In case you haven’t already done the math: That’s more than double what utilities asked for just a year earlier,” Heatmap’s Matthew Zeitlin wrote. Electricity prices went up by 6.7% in the past year, outpacing the 2.7% increase for prices overall. That makes power prices 37% more expensive than just five years ago. “These increases, a lot of them have not actually hit people's wallets yet,” PowerLines executive director Charles Hua told a group of reporters Wednesday afternoon. “So that shows that in 2026, the utility bills are likely to continue to rise, barring some major, sweeping action.” Those could affect some 81 million consumers, he said.

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4. Drax faces another hit as Japan reconsiders energy from wood pellets

Drax built its business off a loophole in carbon accounting. Under the international rules on how to quantify emissions, the carbon from losing a tree is counted in the country where it’s felled. That meant chopping down old-growth trees in forests in the American South and shipping the vitamin-sized wood pellets to England to burn in a power plant counted as low-carbon energy in the United Kingdom — even if the power plant had to burn twice as much wood to equal the energy from coal. At long last, European and American policymakers are waking up to the realities of the wood pellet energy industry. Enviva, a major wood pellet producer, went bankrupt in 2024. Drax, meanwhile, has been losing green-energy subsidies in its native U.K. Now the company is facing the potential loss of the new biggest market for its wood pellets. Japan, compensating for the nuclear reactors still sitting idle 15 years after the Fukushima disaster, is set to soon surpass the U.K. as the world’s largest pellet importer market. But Japanese policymakers are now considering pulling support for all projects over 10 megawatts. “The real intention is quite simple: no new government support, phasing out. We don’t see any clear path of bringing down costs in the foreseeable future,” one government official told the Financial Times. “Existing projects might survive but no new projects are coming.”

5. New York City sues solar installer that damaged homes and put customers in debt

New York City’s Department of Consumer and Worker Protection filed a lawsuit late last week against Radiant Solar and its owner, William James Bushell, demanding $18 million in restitution and about $1.7 million in penalties for damaging New Yorkers’ homes and leaving the customers across the city in debt. It’s the largest sum the city has ever sought from a home improvement contractor. The city argued that Radiant, as The New York Times put it, “engaged in a dizzying array of mechanical and monetary malfeasance for years.” That included padding loans with undisclosed “dealer fees,” signing customers up for large loans they didn't ask for, failing to file paperwork for customers to receive tax credits, and neglecting city approval processes. The company even allegedly ran a bogus sweepstakes for a new Tesla.

THE KICKER

Redwood Materials’ big transformation is bringing in the money. Amid a two-year slump in lithium prices, the battery recycling startup announced the launch of a new venture last summer to provide grid-scale storage from restored battery packs. Yesterday, as Heatmap’s Katie Brigham wrote, “it’s clear just how much that bet has paid off.” The company raised a $425 million round of Series E funding for the new venture, called Redwood Energy. The money came from such investors as Google and Nvidia’s venture capital arms