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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


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    Politics

    AM Briefing: Let the Vote-a-Rama Begin

    On taxing renewables, climate finance, and Europe’s heat wave

    Where Things Stand with the GOP’s Megabill
    Heatmap Illustration/Getty Images

    Current conditions: Parts of Northern California are under red flag warnings as warm air meets whipping winds • China’s southwestern Guizhou province is flooded for the second time in a week • A potential bomb cyclone is taking aim at Australia’s east coast.

    THE TOP FIVE

    1. The Senate GOP’s new tax on renewables could kill the industry

    Late on Friday Senate Republicans added a new tax on solar and wind projects to the budget reconciliation megabill that sent many in the industry into full-blown crisis mode. The proposal would levy a first-of-its-kind penalty on all solar and wind projects tied to the quantity of materials they source from companies with ties to China or other countries designated as adversaries by the U.S. government. “Taken together with other factors both in the bill and not, including permitting timelines and Trump’s tariffs, this tax could indefinitely undermine renewables development in America,” wrote Heatmap’s Jael Holzman. Here are a few reactions from politicians and industry insiders:

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    Politics

    How the Senate GOP’s New Tax on Renewables Could ‘Kill’ the Industry

    As bad as previous drafts of the reconciliation bill have been, this one is worse.

    The Capitol and John Thune.
    Heatmap Illustration/Getty Images

    Senate Republicans are in the final stages of passing their budget reconciliation megabill — which suddenly includes a new tax on solar and wind projects that has sent many in the industry into full-blown crisis mode.

    The proposed tax was tucked inside the latest text of the Senate reconciliation bill, released late Friday night, and would levy a first-of-its-kind penalty on all solar and wind projects tied to the quantity of materials they source from companies with ties to China or other countries designated as adversaries by the U.S. government. Industry representatives are still processing the legislative language, but some fear it would kick in for certain developers as soon as the date of its enactment. Taken together with other factors both in the bill and not, including permitting timelines and Trump’s tariffs, this tax could indefinitely undermine renewables development in America.

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    Green
    Energy

    On Top of Everything Else, Trump’s Tax Bill Would Break Direct Pay

    A little-noticed provision would make the payment option used by tax-exempt groups all but impossible to claim.

    Solar panels and wind turbines.
    Heatmap Illustration/Getty Images

    A little-noticed provision in the Senate tax bill will sabotage the efforts of tribes, rural electric cooperatives, and public power authorities to develop local affordable energy projects by striking a section of the Inflation Reduction Act that enabled tax-exempt groups to claim the clean energy tax credits as direct cash payments from the Treasury.

    The IRA included strict domestic sourcing requirements beginning in 2026 for groups utilizing this “direct pay” option on projects larger than 1 megawatt. But the law also created exceptions for cases where domestic components were not available in sufficient quantity or quality, or would increase costs by more than 25%. The Senate bill would get rid of these exceptions.

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