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Do you want a light tailwind or a full-on hurricane?
“The only thing better for the climate than buying an EV over a gasoline-powered car is buying no car at all,” the climate scientist
Rob Jackson has written. But for many Americans, not having a car at all is the stuff of logistical and cultural nightmares. The average person living in the U.S. covers more than 1,000 miles per month in their vehicle, and nearly 45% of people don’t even have the option of opting for public transportation. Ditching your car? You might as well ask people to give up their cell phones.
But across the country, transportation advocates and e-bike warriors are looking for solutions to go, if not entirely car-less, then at least car-light. Heatmap has put together a comprehensive guide to help you make a decision that best fits your lifestyle, whether that’s becoming a superpedestrian, a committed e-bike user, or just trying to replace a couple of short-haul drives a week.
Doug Gordon is the cohost of “The War on Cars,” a podcast about the fight against car culture. He is also a writer, TV producer, and safe streets advocate, and he advises nonprofits and mobility companies on communications strategies to promote better streets and public infrastructure through his Brooklyn Spoke Media consulting business.
Alexa Sledge is the director of communications at Transportation Alternatives, a nonprofit organization that has worked to promote non-polluting, safe, and quiet travel in New York City since 1973.
Bryan Deanis the sales manager at The eBike Store in Portland, Oregon, which opened in 2008 as the city’s first e-bike-only retailer. He’s spent over six years helping customers pick out their perfect bikes and is also the creator of the #eBikeAnywhere hashtag.
Kevin Lau is a product specialist at REI with more than 20 years of experience. He is based out of Marlton, New Jersey.
Only 8% of U.S. households currently get by without owning a car, and less than 1% of Americans commute to work by bike. The U.S. is so driving-centric that we’re home to one-fifth of all the cars on the planet despite having less than 5% of the global population.Eleven states have more registered vehicles than people.
But just because driving has always been your default doesn’t mean it makes the most sense for the kind of travel you do — even if you live somewhere without great public transportation. Over half of all trips Americans make in a car are for a distance of less than three miles — perfect to convert into a bike ride.
“I think of mobility like a Swiss army knife: You have to use the right tool for the job,” Gordon told me. “If I just need to pick up a carton of milk, does it make sense to do that in a 6,000-pound metal box on wheels that is powered by dinosaur juice? Not so much.”
On average, commuting by bike in the U.S. saves an estimated $2,500 per year, and it has been found to have massive benefits for one’s mental health, cardiovascular health, and even productivity at work. Yes, even e-bikes!
“If you go to places like Copenhagen or Amsterdam — places where there are huge numbers of cyclists — and you poll those people, concern for the environment barely cracks the top five reasons why they cycle,” Gordon said. “The reasons why people cycle in Denmark and the Netherlands are because it’s safe and convenient, and it’s often the fastest and cheapest way to get where they’re going.”
Transportation is the most significant contributor to climate change in the United States, with nearly 60% of the sector’s greenhouse gas emissions coming from cars alone (another 23% comes from trucks). Replacing a quarter of your total driving with walking, biking, or e-biking could save 1.3 tons of greenhouse gas emissions per year, according to our friends at WattTime — about the same as forgoing burning 1,433 pounds of coal or three barrels of oil. If every American drove even a mere 10% less per year, it’d be like taking 28 coal-fired power plants offline.
You can still make a significant impact without ditching your car, in other words: You simply have to drive less. And the upsides are enormous. More Americans die of car pollution than in car accidents every year. Additionally, commuting by bike or by foot makes us healthier and happier.
It also helps us realize what our community priorities should be. “Individual action is not always what we need to focus on,” Gordon said. “We need to focus on institutional change. But my philosophy is that lots of individual action actually adds up to the political will to get the institutional change you need.”
A survey of studies from five countries (including the U.S.) found that the main barriers to cycling were low perceived safety, bad weather, lack of cycling infrastructure (including “shower facilities” at one’s destination), and distance and perceived effort.
Safety is a valid concern. Riding a bike is about 500 times more likely to be fatal than riding a bus, according to a 2007 study; even with the success of programs like New York’s Vision Zero, collisions with cars remain a real danger for people on bikes. The car-related pollution inhaled while cycling can also shorten a cyclist’s life by an estimated one to 40 days. But the benefits of cycling on average far outweigh the risks: Riding a bike adds an estimated three to 14 months to your life, even when the possibilities of collisions and air pollution are considered. The health benefits are so significant that a separate study by Swedish researchers found that cyclists had a 47% lower risk of early death and a 10% lower risk of hospitalization compared to car and train commuters.
What about concerns about shower availability and the “distance and perceived effort” of riding a bike? That’s where the advantages of an e-bike’s pedal assist come into play. “E-bikes are great at blasting through any concerns you have about sweat,” Gordon told me. Even in hot weather or on difficult terrain, pedal assist can keep you looking fresh when you arrive at the office.
The first step to driving less is thinking about when and where you can replace specific trips with walking, cycling, or public transportation instead. Lau told me his general rule of thumb is that if a trip is less than a mile and he can safely walk (i.e. if there are sidewalks or safe paths), then he’ll walk. “If it’s more than that, I’ll take the bike if I have a place to lock it or can bring it into my workplace or store,” he said. For trips where he might need some extra assistance — that are farther, longer, hillier, or will require carrying “more cargo without working as hard,” he’ll opt for an e-bike instead.
You can do a lot of this reconnaissance from your couch. Apple Maps and Google Maps can take a lot of the guesswork out of finding the best bike paths to and from your house and the other places you frequent, including informing you ahead of time if the route will require riding on major or minor roads or ones with protected bike lanes. Google and Apple Maps can also give you real-time information about public transportation options in your area (as well as allow you to plan for trips when service might be reduced, like late nights or weekends), and many transit systems now have their own apps to make tracking delays or alternative service simpler.
It’s funny how you don’t realize where the long, slow inclines are in your neighborhood until you’re huffing up them on a bike. Google Maps and Apple Maps can show you what elevation to expect on a walking or cycling route. If you live in a hillier area, an e-bike might be better than a traditional bike since it can take some of the ouch out of the ups.
“Something really, really important that people don’t always think about is gear,” Sledge told me. “It doesn’t necessarily have to be expensive, but if you can only ride your bike when it’s 80 degrees and sunny, that’s not the best scenario.”
If you live somewhere where it gets hot, rainy, snowy, windy, or the weather can change unexpectedly, think ahead of time about the sort of gear you’d need to make cycling or walking more comfortable. (We have a checklist of ideas below.)
California, Colorado, Connecticut, Hawaii, Massachusetts, New York, Oklahoma, and Vermont all have statewide tax credits or rebates to encourage e-bike adoption.
Live somewhere that isn’t on that list? Here is a super handy tracker from the Transportation Research and Education Center at Portland State University of more than 100 counties, cities, and municipalities that offer e-bike incentive programs. Also, look for e-bike lending libraries that might be in your area.
If you’re having trouble learning about the programs available to you, head into a brick-and-mortar e-bike shop in your area or connect with your local transportation advocacy group — they’ll know what programs you can take advantage of and be happy to point you in the right direction.
Do you know what bike enthusiasts love more than anything? Creating new bike enthusiasts. If you’re still feeling intimidated by the idea of getting on a bike — or even if you’re not — “find a friend who’s already doing it,” Gordon suggested. Bike people are “an evangelical bunch, and if you tell a friend who you know is into biking or bike commutes regularly that ‘Hey, I’m thinking of doing it,’ I can guarantee that person will be more than happy to hold your hand and help you through your first ride.”
There are dozens of emissions-free or emissions-light transportation options, from using your own two feet to digging the old beater bicycle out of your garage to going full Steve Wozniak with a Segway. The most important thing is to something you’ll actually use.
That said — “What’s really going to be the best option for most Americans is an e-bike,” Sledge told me. “That’s a true car replacement when so often a [traditional] bike can’t be a true, true, true car replacement.” E-bikes are simply more practical and comfortable for longer rides or daily commutes, and if you need to haul things like groceries or children, they can’t be beaten.
I’ve looked at all my options and don’t think I can drive any less than I already do. What can I do instead?
There’s no way around it: E-bikes are pricy. “An e-bike is going to be a big purchase — nowhere near as much as a car, but still, it’s a major purchase,” Sledge said. Even with incentive programs (more on that below), you’re likely to spend more than $1,000 out of pocket.
It is tempting to look for a bargain. But Dean stressed that manufacturers and bulk retailers are “sacrificing a lot” in terms of quality and service to make a profit at lower price points. As a rule, “If you’re spending less than $1,000 on any bike, it’s landfill,” he said. “And that waste is toxic — odds are, it isn’t going to be recycled properly.”
Gordon suggested that if you’re concerned about how often you’ll use an e-bike, it makes sense to get “a cheap regular bike” initially. “Then you can figure out if this is something you want to do in the long term, and after a few weeks, or a month, or a year, you can go, ‘Okay, I’m ready for the $1,000, $2,000, $5,000 bicycle.’”
Perspective is important, too. Yes, e-bikes are expensive — if you compare them to regular bikes. “If you compare them to cars, they’re a bargain,” Gordon said. “E-bikes are a replacement tool; they’re not an upgrade from other bikes. So if you’re a family with two cars and are going down to one, getting a $2,500 or even $5,000 e-bike is a relative bargain.” Additionally, many retailers — including The eBike Store in Portland, Oregon, where Dean works — offer installment plans to help make the purchase more manageable.
Conversion kits are a popular way to convert an analog bike you already own into an e-bike by attaching a motor to the front hub, rear hub, or mid-drive. Many of these kits can be found cheaply on websites like Amazon, though The Washington Post warns that it is still a “very Wild West market” and to only buy batteries from reputable e-bike battery brands (low-quality batteries are more likely to start fires). While converting to an e-bike might be a good option for you if you want to dip a toe in the e-bike water, you’ll still need to spend several hundred dollars to get a kit that gives you the same oomph as an actual e-bike. That said, whatever option gets you on a bike is the best one, and if you’re converter-kit curious, here’s a good guide for learning where to start.
“Buying a bike at a brick-and-mortar store from competent, kind people who love their job — customers are going to have a fantastic experience,” Dean told me. “They’re going to get a great taste for the bike, which means they’ll be riding it a lot. We’re not in the business of selling bikes that sit and rot in someone’s garage.”
It is especially important to go to a store with e-bike specialists on staff (rather than a bulk retailer like Costco — or worse, anything online) because the mechanics will have checked the bike over and adjusted the safety points so it’s ready to go. “You’re going to get educated and get a strong appreciation of the beautiful tool that you are buying, and learn how to operate it and make it last,” Dean added.
Most importantly, though, ensure you take the bike for a test ride before handing over your credit card. Any retailer worth its salt will offer this as an option; the best retailers will take you on a guided test ride, where they’ll teach you how to use the e-bike you’re trying out. But the bottom line is, “Don’t buy a bike that you haven’t ridden,” Dean said. “Ride the bike before you buy it; that’s in all-caps with smiley faces and exclamation points. Don't buy the bike if you can’t ride it first.”
“Buy the bike that’s going to put the biggest, dumbest smile on your face.”
Dean said he points riders looking to log miles to the Specialized Como. “When you’re commuting long miles, you want something comfortable, something that’s reliable, something that has a strong enough motor that will get you where you’re going and a big-enough battery that you’re not going to sweat it,” he said. The Specialized Como is also an excellent choice for people who want to “show up to work not sweaty” but maybe get a little bit more of a workout on the way home.
If you prefer commuting on a traditional bike, Lau suggested REI’s ADV 1.1, a road touring bike, or the CTY 1.1 bike, a less-expensive hybrid built for logging longer distances and enduring the daily wear-and-tear of a commute. His e-bike pick for commuters is the CTY e2.2, a popular, well-reviewed, and accessible commuter bike specifically marketed to “replace car trips.”
Dean loves to recommend Tern bikes to people who want to make trips with their kids. “They’ve been doing this for a long time, they have tons of great accessories, and they use Bosch power systems,” he said — all points in the bike’s favor. That customizability and reliability make it a good fit for families who want to be able to tailor the bike to their needs and price point while also not having to worry about it breaking down in the middle of a toddler’s meltdown.
But there is one other primary reason why Dean points parents to Tern. “All of their bikes are rider first, cargo behind” — versus bucket bikes that put the cargo in front of the rider. While the latter design is also popular, it also means that if you’re trying to squeak out into traffic, you’re nosing your most precious cargo ahead of you, into potential harm’s way.
Lau offered three options for e-bikes that won’t make you miss the trunk of your car, starting with the Cannondale Cargowagen, which can lug up to 440 pounds — that is a lot of Chili & Lime Flavored Rolled Corn Tortilla Chips. Its range isn’t quite as good as some other bikes on the market — the battery is 545 watt-hours — so it’s probably a better fit for people who live in higher-density areas or near their preferred market. (You can always buy a second battery if you want a little more range.) The Cargowagen is also a class 3 bike, meaning you won’t have to worry about the ice cream melting before you can get home.
Like Dean, Lau loves to recommend Tern bikes for handling heavy loads, especially the Tern GSD S00, which conveniently folds up so it can even be stored in an apartment or transported in an elevator while still being compatible with Tern’s line of cargo-carrying products — but at almost $6,000 before add-ons, it’ll likely be out of many first-time e-bikers’ budgets. Tern’s Vektron S10 is a less expensive option and still has the power to handle hilly roads with six Trader Joe’s bags in tow. (Note that both Terns are class 1 bikes, meaning the pedal assist tops out at 20 miles per hour.)
“Lightweight e-bikes are out there,” Dean said, and can be had — for the right amount of money. “They’re usually going to start around $3,500 to $4,000 and then go up from there,” he told me, pointing to Specialized as one of his favorite lightweight brands.
Keep in mind that you may not need a lightweight e-bike. “No one has ever come in and said, ‘I want a heavy bike,’” Dean pointed out. Electric motors are, by necessity, heavy, so getting a lighter bike can mean sacrificing half the motor and battery. There are workarounds: “If you have stairs to go up, almost all of these bikes have a walk assist mode,” which gently turns the tires so you’re not fighting gravity on your own, Dean told me. Likewise, if you’re trying to load your bike onto a car rack, “you don’t have to Hulk it up there; you can be a little smarter about your efforts by picking up the front wheel and putting it in the rack behind your car. Then pick up the back wheel.” If you’re really struggling with your bike, you can always pop off the battery — one of the heavier components — and carry it separately.
The best new commuter bike you can get away with is the CTY 1.1, the analog bike Lau recommended above, but for an e-bike option, he points customers to the Co-op CTY e2.1, an easy, accessible, no-frills class 1 bike that won’t run you more than $2,000. It might be a little light on features for a serious urban commuter, though.
Dean told me that the Gazelle Medeo and some of the bikes from Electra Country will have price points that could be more acceptable to customers on a budget. Gazelle uses the reliable Bosch power system, and the Medeo is “really good” and comes in “multiple versions.” (I found one for less than $2,000). Electra Country is a subsidiary of Trek and is a “one-size-fits-all, beach cruiser-looking bike” that comes in super fun colors.
Congratulations! You’re the proud owner of a bike or an e-bike (or skateboard or e-scooter or a really good pair of walking shoes). What happens now?
While the benefits of riding a bike (or any other form of active transportation) still outweigh the risks, cars are getting bigger, their blindspots are getting larger, and pedestrian and cyclist deaths nationwide are at a 40-year high. Even electric vehicles might be a small part of the problem since they’re so much heavier than regular cars — and that much more dangerous if you get hit.
I asked Sledge how newly carless commuters could become better pedestrians, and she quickly corrected me. “There is no such thing as being a good pedestrian,” she said. “So often, in the United States, when we have groups of people that are consistently harmed by other groups of people, we’re like, ‘How can the victims be better?’ And the real answer is, ‘How can we create systems and designs that protect those people?’”
We’ll get into that. But the bottom line is: be safe when you’re out on the road. Learn how to navigate intersections safely, and don’t take unnecessary risks. Especially if you’re on an e-bike, “You’re traveling faster than most cars are expecting you to,” Dean said. “To remember that, imagine you are not only invisible, but they’re all trying to kill you.”
“Riding a bike is a really good entry for a lot of people into larger political conversations about climate, the design of their cities or towns, and a host of other issues,” Gordon told me. It might only be a short amount of time before you start to wonder why there aren’t more protected bike lanes in your town or city, or why mass transit isn’t reaching your neighborhood or destination, or why lousy road design is making your commute more dangerous than it should be.
There’s some good news, though: There has never been a better time to become a transit advocate. “It could be as small as your block, or your neighborhood, or your city, but there are tons of groups all over the country that focus on working to make them safer and better for the people in them,” Sledge said.
One of the best places to start is by making your voice and your values heard. As Sledge reminded me, car companies already have — and continue to spend money and time lobbying policies that are better for drivers (and their bottom lines) than others on the road. But where to begin? “First, I would look for any kind of organization in your community, your neighborhood, or your city that focuses on safe streets or fighting climate change, and see if you can get involved with them,” Sledge said. “And if you don’t have that kind of organization, start to go to your city council meetings, making your voice heard with your local representatives — those kinds of things really make a difference.”
Another great resource is Transportation for America’s Transit Advocate Guide, which takes you step-by-step through building a movement in your community. Transportation Alternatives also hosts occasional activist trainings to help you learn how to organize successful campaigns in your neighborhood.
Maybe you bought an e-bike or a monthly metro pass … but you’ve been unable to quit your car the way you thought you would. That’s okay! This is not an all-or-nothing activity. “Don’t feel guilty if you’re still driving,” Gordon stressed. Remember that “you’re operating within a system that is built for you to drive, so starting small is really good.” Every fit and start of progress helps.
Remember also that better, low- and zero-emissions-friendly infrastructure and a pedestrian-first culture aren’t going to be built overnight. Even the most hard-core among us still need to use cars occasionally. Just “reimagining how we’re going to truly allocate our public resources — our public dollars, our public services — to serve everyone, and radically rethinking how to do that, is so important,” Sledge said.
I will leave you with one last instruction for ditching your car. When you discover the bike that lets you “follow your joy, follow your bliss,” and puts a “smile on your face” — as Dean likes to say — don’t keep it to yourself.
Someone else in your community is beginning to think about ditching their car, too. It’s your turn now. Go forth. Become someone else’s enthusiastic bike geek.
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The EV-maker is now a culture war totem, plus some AI.
During Alan Greenspan’s decade-plus run leading the Federal Reserve, investors and the financial media were convinced that there was a “Greenspan put” underlying the stock market. The basic idea was that if the markets fell too much or too sharply, the Fed would intervene and put a floor on prices analogous to a “put” option on a stock, which allows an investor to sell a stock at a specific price, even if it’s currently selling for less. The existence of this put — which was, to be clear, never a stated policy — was thought to push stock prices up, as it gave investors more confidence that their assets could only fall so far.
While current Fed Chair Jerome Powell would be loath to comment on a specific volatile security, we may be seeing the emergence of a kind of sociopolitical put for Tesla, one coming from the White House and conservative media instead of the Federal Reserve.
The company’s high-flying stock shed over $100 billion of value on Monday, falling around 15% and leaving the price down around 50% from its previous all-time high. While the market as a whole also swooned, especially high-value technology companies like Nvidia and Meta, Tesla was the worst hit. Analysts attributed the particularly steep fall to concerns that CEO Elon Musk was spending too much time in Washington, and that the politicization of the brand had made it toxic to buyers in Europe and among liberals in the United States.
Then the cavalry came in. Sean Hannity told his Fox News audience that he had bought a Model S, while President Donald Trump posted on Truth Social that “I’m going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American.” By this afternoon, Trump had turned the White House lawn into a sales floor for Musk’s electric vehicles. Tesla shares closed the day up almost 4%, while the market overall closed down after Trump and his advisors’ furious whiplash policy pronouncements on tariffs.
Whether the Tesla put succeeds remains to be seen. The stock is still well, well below its all-time highs, but it may confirm a new way to understand Tesla — not as a company that sells electric vehicles to people concerned about climate change, but rather as a conservative culture war totem that has also made sizable investments in artificial intelligence and robotics.
When Musk bought Twitter and devoted more of his time, energy, money, and public pronouncements to right wing politics, some observers thought that maybe he could lift the dreadful image of electric vehicles among Trump voters. But when Pew did a survey on public attitudes towards electric vehicles back in 2023, it found that “Democrats and Democratic-leaning independents, younger adults, and people living in urban areas are among the most likely to say they would consider purchasing an EV” — hardly a broad swathe of Trump’s America. More than two-thirds of Republicans surveyed said they weren’t interested in buying an electric car, compared to 30% of Democrats.
On the campaign trail, Trump regularly lambasted EVs, although by the end of the campaign, as Musk’s support became more voluminous, he’s lightened up a bit. In any case, the Biden administration’s pro-electric-vehicle policies were an early target for the Trump administration, and the consumer subsidies for EVs passed under the 2022 Inflation Reduction Act are widely considered to be one of the softest targets for repeal.
But newer data shows that the tide may be turning, not so much for electric vehicles, but likely for Tesla itself.
The Wall Street Journalreported survey data last week showing that only 13% of Democrats would consider buying a Tesla, down from 23% from August of 2023, while 26% of Republicans would consider buying a Tesla, up from 15%. Vehicle registration data cited by the Journal suggested a shift in new Tesla purchases from liberal urban areas such as New York, San Francisco, and Los Angeles, towards more conservative-friendly metropolises like Las Vegas, Salt Lake City, and Miami.
At the same time, many Tesla investors appear to be mostly seeing through the gyrations in the famously volatile stock and relatively unconcerned about month-to-month or quarter-to-quarter sales data. After all, even after the epic fall in Tesla’s stock price, the company is still worth over $700 billion, more than Toyota, General Motors, and Ford combined, each of which sells several times more cars per year than Tesla.
Many investors simply do not view Tesla as a luxury or mass market automaker, instead seeing it as an artificial intelligence and robotics company. When I speak to individual Tesla shareholders, they’re always telling me how great Full Self-Driving is, not how many cars they expect the company to sell in August. In many cases, Musk has made Tesla stockholders a lot of money, so they’re willing to cut him tremendous slack and generally believe that he has the future figured out.
Longtime Tesla investor Ron Baron, who bought hundreds of millions of dollars worth of shares from 2014 to 2016, told CNBC Tuesday morning, that Musk “believes that digitization [and] autonomy is going to be driving the future. And he thinks we’re … on the verge of having an era of incredible abundance.”Baron also committed that he hasn’t, won’t, and will never sell. “I’m the last in, I’ll be the last out. So I won’t sell a single share personally until I sell all the shares for clients, and that’s what I’ve done.”
Wedbush Securities’ Dan Ives, one of the biggest Tesla bulls on the street, has told clients that he expects Tesla’s valuation to exceed $2 trillion, and that its self-driving and robotics business “will represent 90% of the valuation.”
Another longtime Tesla bull, Morgan Stanley’s Adam Jonas, told clients in a note Monday that Tesla remained a “Top Pick,” and that his price target was still $430, compared to the stock’s $230.58 close price on the day. His bull case, he said, was $800, which would give the company a valuation over $2.5 trillion.
When the stock lags, Jonas wrote, investors see Tesla as a car company. “In December with the stock testing $500/share, the prevailing sentiment was that the company is an AI ‘winner’ with untapped exposure to embodied AI expressions such as humanoid robotics,” Jonas wrote. “Today with the stock down 50% our investor conversations are focused on management distraction, brand degradation and lost auto sales.”
In a note to clients Tuesday, Ives beseeched Musk to “step up as CEO,” and lamented that there has been “little to no sign of Musk at any Tesla factory or manufacturing facility the last two months.” But his bullishness for Tesla was undaunted. He argued that the scheduled launch of unsupervised Full Self-Driving in June “kicks off the autonomous era at Tesla that we value at $1 trillion alone on a sum-of-the-parts valuation.”
“Autonomous will be the biggest transformation to the auto industry in modern day history,” Ives wrote, “and in our view Tesla will own the autonomous market in the U.S. and globally.”
The most effective put of all may not be anything Trump says or does, but rather investors’ optimism about the future — as long as it’s Elon Musk’s future.
The uncertainty created by Trump’s erratic policymaking could not have come at a worse time for the industry.
This is the second story in a Heatmap series on the “green freeze” under Trump.
Climate tech investment rode to record highs during the Biden administration, supercharged by a surge in ESG investing and net-zero commitments, the passage of the Infrastructure Investment and Jobs Act and Inflation Reduction Act, and at least initially, low interest rates. Though the market had already dropped somewhat from its recent peak, climate tech investors told me that the Trump administration is now shepherding in a detrimental overcorrection. The president’s fossil fuel-friendly rhetoric, dubiously legal IIJA and IRA funding freezes, and aggressive tariffs, have left climate tech startups in the worst possible place: a state of deep uncertainty.
“Uncertainty is the enemy of economic progress,” Andrew Beebe, managing director at Obvious Ventures, told me.
The lack of clarity is understandably causing investors to throw on the brakes. “We’ve talked internally about, let’s be a little bit more cautious, let’s be a little more judicious with our dollars right now,” Gabriel Kra, co-founder at the climate tech firm Prelude Ventures, told me. “We’re not out in the market, but I would think this would be a really tough time to try and go out and raise a new fund.”
This reluctance comes at a particularly bad time for climate tech startups, many of which are now reaching a point where they are ready to scale up and build first-of-a-kind infrastructure projects and factories. That takes serious capital, the kind that wasn’t as necessary during Trump’s first term, or even much of Biden’s, when many of these companies were in a more nascent research and development or proof-of-concept stage.
I also heard from investors that the pace of Trump’s actions and the extent of the economic upheaval across every sector feels unique this time around. “We’re entering a pretty different economic construct,” Beebe told me, citing the swirling unknowns around how Trump’s policies will impact economic indicators such as inflation and interest rates. “We haven’t seen this kind of economic warfare in decades,” he said.
Even before Trump took office, it was notoriously difficult for climate companies to raise funding in the so-called “missing middle,” when startups are too mature for early-stage venture capital but not mature enough for traditional infrastructure investors to take a bet on them. This is exactly the point at which government support — say, a loan guarantee from the Department of Energy’s Loan Programs Office or a grant from the DOE’s Office of Clean Energy Demonstrations — could be most useful in helping a company prove its commercial viability.
But now that Trump has frozen funding — even some that’s been contractually obligated — companies are left with fewer options than ever to reach scale.
One investor who wished to remain anonymous in order to speak more openly told me that “a lot of the missing middle companies are living in a dicier world.” A 2023 white paper on “capital imbalances in the energy transition” from S2G Investments, a firm that supports both early-stage and growth-stage companies, found that from 2017 to 2022, only 20% of climate capital flowed toward companies at this critical inflection point, while 43% went to early-stage companies and 37% towards established technologies. For companies at this precarious growth stage, a funding delay on the order of months could be the difference between life and death, the investor added. Many of these companies may also be reliant on debt financing, they explained. “Unless they’ve been extremely disciplined, they could run into a situation where they’re just not able to service that debt.”
The months or even years that it could take for Trump’s rash funding rescission to wind through the courts will end up killing some companies, Beebe told me. “And unfortunately, that’s what people on the other side of this debate would like, is just to litigate and escalate. And even if they ultimately lose, they’ve won, because startups just don’t have the balance sheets that big companies would,” he explained.
Kra’s Prelude Ventures has a number of prominent companies in its portfolio that have benefitted from DOE grants. This includes Electric Hydrogen, which received a $43.3 million DOE grant to scale electrolyzer manufacturing; Form Energy, which received $150 million to help build a long-duration battery storage manufacturing plant; Boston Metal, which was awarded $50 million for a green steel facility; and Heirloom, which is a part of the $600 million Project Cypress Direct Air Capture hub. DOE funding is often doled out in tranches, with some usually provided upfront and further payments tied to specific project milestones. So even if a grant has officially been awarded, that doesn’t mean all of the funding has been disbursed, giving the Trump administration an opening to break government contracts and claw it back.
Kra told me that a few of his firm’s companies were on the verge of securing government funding before Trump took office, or have a project in the works that is now on hold. “We and the board are working closely with those companies to figure out what to do,” he told me. “If the mandates or supports aren’t there for that company, you’ve got to figure out how to make that cash last a bunch longer so you can still meet some commercially meaningful milestones.”
In this environment, Kra said his firm will be taking a closer look at companies that claim they will be able to attract federal funds. “Let’s make sure we understand what they can do without that non-dilutive capital, without those grants, without that project level support,” he told me, noting that “several” companies in his portfolio will also be impacted by Trump’s ever-changing tariffs on imports from Canada, Mexico, and China. Prelude Ventures is working with its portfolio companies to figure how to “smooth out the hit,” Kra told me later via email, but inevitably the tariffs “will affect the prices consumers pay in the short and long run.”
While investors can’t avoid the impacts of all government policies and impulses, the growth-stage firm G2 Venture Partners has long tried to inoculate itself against the vicissitudes of government financing. “None of our companies actually have any exposure to DOE loans,” Brook Porter, a partner and co-founder at G2, told me in an email, nor have they received government grants. If you add up the revenue from all of the companies in G2’s portfolio, which is made up mainly of sustainability-focused startups, only about 3% “has any exposure to the IRA,” Porter told me. So even if the law’s generous clean energy tax credits are slashed or the programs it supports are left to languish, G2’s companies will likely soldier on.
Then there are the venture capitalists themselves. Many of the investors I spoke with emphasized that not all firms will have the ability or will to weather this storm. “I definitely believe many generalist funds who dabbled in climate will pull back,” Beebe told me. Porter agreed. “The generalists are much more interested in AI, then I think in climate,” he said. It’s not as if there’s been a rash of generalist investors announcing pullbacks, though Kra told me he knows of “a couple of firms” that are rethinking their climate investment strategies, potentially opting to fold these investments under an umbrella category such as “hard tech” instead of highlighting a sectoral focus on energy or climate, specifically.
Last month, the investment firm Coatue, which has about $70 billion in assets under management, raised around $250 million for a climate-focused fund, showing it’s not all doom and gloom for the generalists’ climate ambitions. But Porter told me this is exactly the type of large firm he wouldexpect to back out soon, citing Tiger Global Management and Softbank as others that started investing heavily during climate tech’s boom years from 2020 to 2022 that he could imagine winding down that line of business.
Strategic investors such as oil companies have also been quick to dial back their clean energy ambitions and refocus their sights on the fossil fuels championed by the Trump administration. “Corporate venture is very cyclical,” Beebe told me, explaining that large companies tend to make venture investments when they have excess budget or when a sector looks hot, but tighten the purse strings during periods of uncertainty.
But Cody Simms, a managing partner at the climate tech investment firm MCJ, told me that at the moment, he actually sees the corporate venture ecosystem as “quite strong and quite active.” The firm’s investments include the low-carbon cement company Sublime Systems, which last year got strategic backing from two of the world’s largest building materials companies, and the methane capture company Windfall Bio, which has received strategic funding from Amazon’s Climate Pledge Fund. Simms noted that this momentum could represent an overexuberance among corporations who just recently stood up their climate-focused venture arms, and “we’ll see if it continues into the next few years.”
Notably, Sublime and Windfall Bio both also have millions in DOE grants, and another of MCJ’s portfolio companies, bio-based chemicals maker Solugen, has a “conditional commitment” from the LPO for a loan guarantee of over $200 million. Since that money isn’t yet obligated, there’s a good chance it might never actually materialize, which could stall construction on the company’s in-progress biomanufacturing facility.
Simms told me that the main thing he’s encouraging MCJ’s portfolio companies to do at this stage is to contact their local representatives — not to advocate for climate action in general, but rather “to push on the very specific tax credit that they are planning to use and to talk about how it creates jobs locally in their districts.”
Getting startups to shift the narrative away from decarbonization and climate and toward their multitudinous co-benefits — from energy security to supply chain resilience — is of course a strategy many are already deploying to one degree or another. And investors were quick to remind me that the landscape may not be quite as bleak as it appears.
“We’ve made more investments, and we have a pipeline of more attractive investments now than we have in the last couple of years,” Porter told me. That’s because in spite of whatever havoc the Trump administration is wreaking, a lot of climate tech companies are reaching a critical juncture that could position the sector overall for “a record number of IPOs this year and next,” Porter said. The question is, “will these macro uncertainties — political, economic, financial uncertainty — hold companies back from going public?”
As with so many economic downturns and periods of instability, investors also see this as a moment for the true blue startups and venture capitalists to prove their worth and business acumen in an environment that’s working against them. “Now we have the hardcore founders, the people who really are driven by building economically viable, long-term, massively impactful companies, and the investors who understand the markets very well, coming together around clean business models that aren’t dependent on swinging from one subsidy vine to the next subsidy vine,” Beebe told me.
“There is no opportunity that’s an absolute no, even in this current situation, across the entire space,” the anonymous climate tech investor told me. “And so this might be one of the most important points — I won’t say a high point, necessarily — but it might be a moment of truth that the energy transition needs to embrace.”
On the energy secretary’s keynote, Ontario’s electricity surcharge, and record solar power
Current conditions: Critical fire weather returns to New Mexico and Texas and will remain through Saturday • Sharks have been spotted in flooded canals along Australia’s Gold Coast after Cyclone Alfred dropped more than two feet of rain • A tanker carrying jet fuel is still burning after it collided with a cargo ship in the North Sea yesterday. The ship was transporting toxic chemicals that could devastate ecosystems along England’s northeast coast.
In a keynote speech at the energy industry’s annual CERAWeek conference, Energy Secretary Chris Wright told executives and policymakers that the Trump administration sees climate change as “a side effect of building the modern world,” and said that “everything in life involves trade-offs." He pledged to “end the Biden administration’s irrational, quasi-religious policies on climate change” and insisted he’s not a climate change denier, but rather a “climate realist.” According toThe New York Times, “Mr. Wright’s speech was greeted with enthusiastic applause.” Wright also reportedly told fossil fuel bosses he intended to speed up permitting for their projects.
Other things overheard at Day 1 of CERAWeek:
The premier of Canada’s Ontario province announced he is hiking fees on electricity exported to the U.S. by 25%, escalating the trade war kicked off by President Trump’s tariffs on Canadian goods, including a 10% tariff on Canadian energy resources. The decision could affect prices in Minnesota, New York, and Michigan, which get some of their electricity from the province. Ontario Premier Doug Ford estimated the surcharge will add about $70 to the monthly bills of affected customers. “I will not hesitate to increase this charge,” Ford said. “If the United States escalates, I will not hesitate to shut the electricity off completely.” The U.S. tariffs went into effect on March 4. Trump issued another 30-day pause just days later, but Ford said Ontario “will not relent” until the threat of tariffs is gone for good.
There was a lot of news from the White House yesterday that relates to climate and the energy transition. Here’s a quick rundown:
The EPA cancelled hundreds of environmental justice grants: EPA Administrator Lee Zeldin and Elon Musk’s so-called Department of Government Efficiency nixed 400 grants across environmental justice programs and diversity, equity, and inclusion programs worth $1.7 billion. Zeldin said this round of cuts “was our biggest yet.”
Transportation Secretary Sean Duffy rescinded Biden memos about infrastructure projects: The two memos encouraged states to prioritize climate change resilience in infrastructure projects funded by the Bipartisan Infrastructure Law, and to include under-represented groups when planning projects.
The military ended funding for climate studies: This one technically broke on Friday. The Department of Defense is scrapping its funding for social science research, which covers climate change studies. In a post on X, Defense Secretary Pete Hegseth said DOD “does not do climate change crap. We do training and war fighting.”
Meanwhile, a second nonprofit – the Coalition for Green Capital – filed a lawsuit against Citibank over climate grant money awarded under the Inflation Reduction Act but frozen by Zeldin’s EPA. Climate United filed a similar lawsuit (but targeting the EPA, as well as Citibank) on Saturday.
A new report from the Princeton ZERO Lab’s REPEAT Project examines the potential consequences of the Trump administration’s plans to kill existing EV tax credits and repeal EPA tailpipe regulations. It finds that, compared to a scenario in which the current policies are kept in place:
“In other words, killing the IRA tax credits for EVs will decimate the nascent renaissance in vehicle and battery manufacturing investment and employment we’re currently seeing play out across the United States,” said Jesse Jenkins, an assistant professor and expert in energy systems engineering and policy at Princeton University and head of the REPEAT Project. (Jenkins is also the co-host of Heatmap’s Shift Key podcast.)
REPEAT Project
The U.S. installed nearly 50 gigawatts of new solar power capacity last year, up 21% from 2023, according to a new report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie. That’s a record, and the largest annual grid capacity increase from any energy technology in the U.S. in more than 20 years. Combined with storage, solar represents 84% of all new grid capacity added in 2024.
SEIA and Wood Mackenzie
Last year was “the year of materialization of the IRA,” with supply chains becoming more resilient and interest from utilities and corporate buyers growing. Installations are expected to remain steady this year, with little growth, because of policy uncertainty. Total U.S. solar capacity is expected to reach 739 GW by 2035, but this depends on policy. The worst case scenario shows a 130 GW decline in deployment through 2035, which would represent $250 billion in lost investments.
“Last year’s record-level of installations was aided by several solar policies and credits within the Inflation Reduction Act that helped drive interest in the solar market,” said Sylvia Levya Martinez, a principal analyst of North America utility-scale solar for Wood Mackenzie. “We still have many challenges ahead, including unprecedented load growth on the power grid. If many of these policies were eliminated or significantly altered, it would be very detrimental to the industry’s continued growth.”
Tesla shares plunged yesterday by 15%, marking the company’s worst day on the market since 2020 and erasing its post-election stock bump.