Trump Launches a New Attack on California’s Clean Car Rules

Current conditions: New Orleans is expecting light rain with temperatures climbing near 90 degrees Fahrenheit as the city marks the 20th anniversary of Hurricane Katrina • Torrential rains could dump anywhere from 8 to 12 inches on the Mississippi Valley and the Ozarks • Japan is sweltering in temperatures as high as 104 degrees.

THE TOP FIVE

1. Trump launches a new attack on California’s clean car rules

Smog city.Apu Gomes/Getty Images

In a new lawsuit filed Thursday, the Trump administration accused California of abusing its power under the Clean Air Act to enact strict rules on planet-heating pollution from cars that unlawfully forces the country to transition to electric vehicles. The litigation comes about nine months after the Republican-controlled Congress voted to block California from banning sales of gas-powered cars by 2035, and looks to halt statewide rules that Sacramento has continued to enforce. If successful, The New York Times noted that the case “could reverberate far beyond California,” given that 17 states representing more than a third of the U.S. automobile market follow California’s standards. “While the Trump administration surrenders the future of the auto industry to China, California will continue competing globally to win the clean vehicle market,” Anthony Martinez, a spokesperson for Governor Gavin Newsom, told the newspaper, adding, “This lawsuit is meritless, and we’re not backing down from this fight.”

The lawsuit came right as the California-based electric automaker Lucid unveiled its first midsize electric SUVs, called the Cosmos and Earth. A third model is in the works, the company said at its latest investor conference, according to InsideEVs.

2. The Senate overwhelmingly approves a big housing bill with big climate stakes

The Senate voted 89-to-10 on Thursday to approve the 21st Century ROAD to Housing Act. While the legislation faces an uncertain future in the House, its passage “is nevertheless a milestone for U.S. federal housing policy — and, in less obvious ways, for climate policy,” Heatmap’s Jeva Lange wrote yesterday.

Here’s a quick breakdown of what she covers in her explainer:

• The impact of the so-called “build-to-rent” ban.
• Why a new categorical exclusion from the National Environmental Protection Act is risky.
• How retrofitting abandoned buildings might work.
• The new definition of manufactured housing.
• Where grants for home weatherization come in.

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3. Microsoft is in talks to lease data centers from Stargate

Microsoft is in “advanced talks” to lease hundreds of megawatts of data center capacity at the Abilene Stargate campus in Texas, The Information reported. Developed by data center giant Crusoe, the project is the first of the $500 billion OpenAI-backed Stargate venture to go live. The site, operated by tech giant Oracle, had originally been slated to expand from 1.2 gigawatts to 2 gigawatts. But as Data Center Dynamics reported, the companies abandoned the plans “due to financing challenges and OpenAI’s frequently changing demand forecasting and shifting view of Stargate.”

Over in Mississippi, meanwhile, Elon Musk’s xAI scored a win when regulators this week authorized the AI company to build a power plant with 41 natural gas-fired turbines to power its data centers, CNBC reported. The NAACP and other civil rights groups had tried to halt the vote, which was held on the state’s primary election day and thus prevented voters from attending. “We are outraged that, despite the community’s clear demand to move the Election Day hearing, MDEQ chose to bulldoze through a decision that silenced the very residents most harmed by it,” Abre’ Conner, director of environmental and climate justice at NAACP, said in a statement referring to the Mississippi Department of Environmental Quality.

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4. Clean cement startup Sublime Systems guts workforce after Trump cuts

Sublime Systems, the Massachusetts company that Canary Media called “one of the most promising low-carbon cement startups,” has laid off about two-thirds of its workforce this week in response to the Trump administration’s repeal of a key grant. The company had already paused construction in December on its forthcoming commercial-scale facility. The moves come after the Department of Energy clawed back an $87 million award from the now-defunct Office of Clean Energy Demonstrations.

It’s not the only Massachusetts-based company aiming to decarbonize heavy industry that cut jobs this month. The green steelmaker Boston Metal slashed 71 of its workers after an “unforeseen industrial accident” at the company’s plant in Brazil made meeting the commercial progress needed to unlock an expected tranche of financing impossible. The layoffs take effect next week.

5. Energy Department offers $2 billion for upgrades to a grid facing ‘eye-popping’ demand

The Energy Department made $1.9 billion in funding available Thursday for grid upgrades that can help push more electricity through existing lines. The money, which came with a call for proposals, is designated for “the rapid deployment of reconductoring,” a process that involves swapping old cables for higher-capacity lines, and other advanced transmission technologies “that expand transfer capability, strengthen reliability and resource adequacy, and reduce costs for consumers, all while making use of existing rights of way.”

The timing is no surprise. The independent market monitor of the PJM Interconnection, America’s largest electricity market, shared what Heatmap’s Matthew Zeitlin called “eye-popping figures on how data centers raise electricity costs” in its latest annual report. “Data center load growth is the primary reason for recent and expected capacity market conditions, including total forecast load growth, the tight supply and demand balance, and high prices,” the ombudsman unit said in the report, released Thursday.

THE KICKER

Sunrun already dominated America’s rooftop solar market. Now the company’s batteries make up nearly half of all residential storage capacity deployed last year in the U.S. Sunrun built 1.5 gigawatt-hours of batteries throughout 2025, when the Solar Energy Industries Association estimates the country added 3.1 gigawatt-hours of new capacity. That puts Sunrun’s share of the market last year at about 48%. “Our deliberate and decisive pivot to provide Americans with energy independence is why Sunrun leads the residential energy storage sector,” Sunrun CEO Mary Powell said in a press release. “Sunrun’s battery fleet provides important resiliency benefits to our customers and immense support to the power grid, serving as the backbone of our nation-leading distributed power plant.”