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Climate

AM Briefing: BYD vs. Tesla

On quarterly EV sales, 2024 weather, and a darker shade of red

AM Briefing: BYD vs. Tesla
Heatmap Illustration/Getty Images

Current conditions: States in the Northeast are bracing for a major winter storm • Two months’ worth of rain fell in just three days in eastern Australia • Major floods brought parts of Saudi Arabia to a standstill.

THE TOP FIVE

1. Fewer cars eligible for 2024 EV tax credit

The number of electric vehicle models that are eligible for the government’s $7,500 tax credit has been more or less cut in half after new battery sourcing rules came into effect on January 1. Thirteen models now qualify, including the Tesla Model Y, the Chevy Bolt EV, and the Ford F-150 Lightning. Under the new rules, cars that use battery components made by Chinese manufacturers are disqualified, a move meant to wean the U.S. market off the Chinese supply chain. And the restrictions will become even tighter in 2025, targeting raw materials like lithium. U.S. automakers are working to expand their domestic manufacturing capabilities but this won’t happen overnight. In the meantime, propsective EV owners could consider leasing rather than buying, which will let you “skirt much of the red tape,” notesHeatmap’s Andrew Moseman.

2. BYD closes in on Tesla’s global EV lead

Tesla is expected to release its fourth quarter sales figures today and the big question is whether it will hold onto its position as the world’s top-selling EV maker. Yesterday Chinese automaker BYD announced it had sold 526,409 fully electric vehicles in the final three months of the year; analysts forecast Tesla’s sales to come in at around 483,200. BYD has been closing in on Tesla for a while, and if it takes the top spot, “it will be both a symbolic turning point for the EV market and further confirmation of China’s growing clout in the global automotive industry,” explainsBloomberg Green. Both BYD and Tesla are facing increasing competition from legacy automakers racing to catch up to their leads.

3. 2024 expected to bring more record-breaking weather

While 2023 was the hottest year ever recorded, experts predict 2024 will bring more extreme weather driven by a combination of man-made global warming and the El Niño weather pattern. The United Kingdom’s Met Office says the average global temperature for 2024 is forecast to be between 1.34 degrees and 1.58 degrees Celsius above the pre-industrial average. “We expect two new global temperature record-breaking years in succession, and, for the first time, we are forecasting a reasonable chance of a year temporarily exceeding 1.5 °C,” says the Met Office’s Dr. Nick Dunstone.

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  • 4. ‘Warming stripes’ updated for 2023

    One of the researchers behind the iconic “warming stripes” – a visual representation of annual global temperatures over time – has updated the graphics to include 2023. Climate scientist Ed Hawkins says last year was so warm, he may need to update his color palette:

    X/ed_hawkins

    5. U.S. property catastrophe reinsurance rates jump 50%

    A rise in extreme weather and natural disasters in the U.S. is prompting a big hike in so-called reinsurance rates, which is likely to trickle down to propery insurance costs. As Reutersexplains, “reinsurers provide insurance for insurers and the prices they agree at the beginning of each year set the trend for the cost of insurance for the next 12 months.” On January 1, U.S. property catastrophe reinsurance rates jumped by as much as 50% for policies that previously experienced natural disasters, according to broker Gallagher Re. The U.S. experienced at least 25 climate-related weather disasters with losses exceeding $1 billion last year, according to the National Oceanic and Atmospheric Administration. The annual average between 1980 and 2022 is about 8 events.

    THE KICKER

    “Solar is quietly eating the world. This is what an energy transition looks like.” –Eric Wesoff at Canary, on reasons to be optimistic about the energy transition


    Yellow

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    Climate

    AM Briefing: Hurricane Erick’s Rapid Intensification

    On storm damage, the Strait of Hormuz, and Volkswagen’s robotaxi

    Hurricane Erick Intensified Really, Really Quickly
    Heatmap Illustration/Getty Images

    Current conditions: A dangerous heat dome is forming over central states today and will move progressively eastward over the next week • Wildfire warnings have been issued in London • Typhoon Wutip brought the worst flooding in a century to China’s southern province of Guangdong.

    THE TOP FIVE

    1. Hurricane Erick slams into Mexico after rapid intensification

    Hurricane Erick made landfall as a Category 3 storm on Mexico’s Pacific coast yesterday with maximum sustained winds around 125 mph. Damages are reported in Oaxaca and Guerrero. The storm is dissipating now, but it could drop up to 6 inches of rain in some parts of Mexico and trigger life-threatening flooding and mudslides, according to the National Hurricane Center. Erick is the earliest major hurricane to make landfall on Mexico's Pacific coast, and one of the fastest-intensifying storms on record: It strengthen from a tropical storm to a Category 4 storm in just 24 hours, a pattern of rapid intensification that is becoming more common as the Earth warms due to human-caused climate change. As meteorologist and hurricane expert Michael Lowry noted, Mexico’s Pacific coast was “previously unfamiliar with strong hurricanes” but has been battered by epic storms over the last two years. Acapulco is still recovering from Category 5 Hurricane Otis, which struck in late 2023.

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    Politics

    It’s Chris Wright’s Worldview. They’re Just Legislating It.

    The energy secretary's philosophy is all over the Senate mega-bill.

    Chris Wright.
    Heatmap Illustration/Getty Images

    As the Senate Finance Committee worked on its version of the reconciliation bill that would, among things, overhaul the Inflation Reduction Act, there was much speculation among observers that there could be a carve out for sources of power like geothermal, hydropower, and nuclear, which provide steady generation and tend to be more popular among Republicans, along the lines of the slightly better treatment received by advanced nuclear in the House bill.

    Instead, the Senate Finance Committee’s text didn’t carve out these “firm” sources of power, it carved out solar and wind, preserving tax credits for everything else through 2035, while sunsetting solar and wind by 2028.

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    Wires and panels.
    Heatmap Illustration | Abbr. Projects

    When I reached out to climate tech investors on Tuesday to gauge their reaction to the Senate’s proposed overhaul of the clean energy tax credits, I thought I might get a standard dose of can-do investor optimism. Though the proposal from the Senate Finance committee would cut tax credits for wind and solar, it would preserve them for other sources of clean energy, such as geothermal, nuclear, and batteries — areas of significant focus and investment for many climate-focused venture firms.

    But the vibe ended up being fairly divided. While many investors expressed cautious optimism about what this latest text could mean for their particular portfolio companies, others worried that by slashing incentives for solar and wind, the bill’s implications for the energy transition at large would be categorically terrible.

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