You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
Whatever your motivation for buying an electric vehicle, here’s the thing: The first day you own one, you’re going to love it.
Forget the fears that come with a new technology, the negativity that stems from the politicization of EVs ownership, or the dead-and-buried stereotype that EVs are slow and boring rides for greenies only. Electric cars are zippy and fun because, unlike gas cars, they can produce a ton of torque from a resting stop. After a lifetime of listening to a car rattle and roar, I can say from experience that you’ll find driving in electric silence to be a revelation. An EV owner wakes up every morning with the equivalent of a full tank of gas because their home is their gas station.
Want a piece of this bliss? If so, then read on.
Brian Moody, an executive editor at Cox Automotive (which owns Kelly Blue Book) and an author specializing in transportation, automotive, and electric cars.
Joseph Yoon, consumer insights analyst for the automotive agency Edmunds.
Loren McDonald, CEO of EVAdoption, which provides data analysis and insights about the electrification of the car industry.
“That’s who the PHEV is for,” Moody told me. “You can do your errands around town with 30 to 40 miles, and when the battery runs out, you just keep driving.”
Ask nearly any EV expert and you’ll hear the same thing: “People don’t drive nearly as far as they think they do,” Moody said. Most of us put the vast majority of miles on our cars within a few dozen miles of our homes, running kids around town or driving to work. You’ll use up a small amount of your battery by the time you get home, plug in, and wake up the next day fully charged. Road trips may seem daunting to the uninitiated, but the interstates are now lined with fast-chargers and the number of them is growing quickly.
Building an EV generates more carbon emissions than building a gas car, a difference that’s due to mining and creating materials for the battery. But that’s just manufacturing a vehicle; once it’s built, it has a decade or two of driving ahead of it. A combustion car constantly spews carbon as it burns fossil fuels, which dwarfs the amount it takes to make an EV. Don’t forget: An electric car gets greener as the grid gets greener. The more clean energy is added to the world’s electrical supply, the better EVs get in comparison to gas cars. You’d need to live in a state with an especially dirty energy grid, such as Wyoming or West Virginia, for an EV not to be a much better option than driving around on gasoline. Furthermore, McDonald said, you can forget the propaganda that suggests EV batteries wind up stacked in a landfill somewhere when the cars meet their end. A growing number of companies are ready to recycle EV batteries and retrieve the precious metals therein, while it’s likely that lots of batteries will find a second life in applications such as grid storage.
It’s true that price has long been one of the biggest barriers to EV adoption. Even though tax incentives — together with savings on fuel and maintenance — make many electrics cost-competitive with their gas counterparts in the long term, their high sticker price keeps many people away. But more electric models are beginning to creep down toward the cost of entry-level gasoline cars.
As with buying an old-fashioned gas-guzzler, going to the dealership to get an EV means dealing with pushy salespeople, confusing specs, and haggling over the price. The process can be doubly frustrating for the EV shopper given the relative unavailability of some electric models and reports of some car salespeople who know frustratingly little about the very EVs they hock.
If you live in a market where EVs have taken hold, like the San Francisco Bay Area, expect knowledgeable salespeople who can walk you through the EV buying process. If you live someplace where few electrics are sold, then the experience may be hit-or-miss. Do your own research, and prepare to be your own advocate.
For a long time, things were simple: If you bought an electric vehicle, then you could take a $7,500 credit on your taxes for that year. But things have gotten murkier in the past year or two — in a bid to protect domestic manufacturing, Congress passed new rules stating that a certain amount of the car and its components had to be made in the U.S. to qualify, leaving a confusing, shifting picture of which EVs qualify and which don’t. (To wit: Many Teslas qualify, Hyundais and Kias don’t, while Rivians receive only half the credit because they’re so expensive.) The upside of the changed rules is that buyers are now allowed to get tax credits on leasing an EV, or to receive the credit as an up-front discount on their new EV. Many states have generous incentives, too. Washington, for example, will give up to $9,000 in rebates for buying an EV. “There are enormous discounts on basically every EV on the market, even before we count the $7,500 with the federal tax credit,” Yoon told me.
Before you take the plunge, take a moment and really think about how you drive — because lots of people overestimate what they need. Maybe even keep notes and check your mileage every day for a week or two to find out how much you really use the car versus how much you think you do. If you find that you could get around town on a few dozen miles of charge but road trip every other weekend, then you might consider a plug-in hybrid. If you’ve already got a gas car or hybrid to handle longer trips and are shopping for a second vehicle, there’s no reason not to go for an EV, assuming you can afford one. If you just need basic transportation to take you a few miles to work, hate the idea of ever buying gas again, and want to spend as little as possible … maybe you should get an e-bike.
A refresher: When you buy a car, you typically put a downpayment on the vehicle, and then borrow enough money from the bank to pay off the rest of its price (plus interest and sales tax) in monthly payments over the course of four, five, or even more years. Leasing is like renting an apartment. You put down a deposit and then pay monthly over the course of the lease, typically three years. But like your rent, those payments don't go toward owning the car. At the end of the lease, you give it back. With EVs especially, there are some serious advantages and drawbacks to each approach you should keep in mind.
If you live in a century-old house that would need to have significant rewiring done to accommodate an EV charger, then installing a Level 2 charger might be too expensive, so you might want to stick to a plug-in hybrid. (Again, more on charging below.) Does your office have a charger? If you live in an apartment, does the parking lot have chargers?
“How you refuel your EV is similar to how you charge your smartphone — you do it either throughout the day or at night before you go to bed. You plug in, you wake up, and it's full,” McDonald said.
“The first thing I tell people? You should probably get a Tesla,” Moody told me. Still, Elon Musk’s electric car company isn’t the darling it once was. Tesla has squandered a huge lead in the EV market by focusing on vanity projects like the Cybertruck and lost a chunk of public goodwill through Musk’s misadventures in politics and social media. But the company still has an ace up its sleeve with the Supercharger network, which is better and more reliable than the competition. This will change in the coming years, as the other automakers have adopted Tesla’s plug and their future cars will be able to use Superchargers. But for now, it’s a major advantage that makes owning a Tesla a lot less stressful than trying to get by with a competitor’s EV, especially if you make road trips. For this reason, Tesla’s Model Y — the best-selling car in the world in 2023, and the best-selling EV in America — remains a compelling choice for anyone who wants an EV to be their only car and have it go nearly anywhere.
Don’t want Musk to get your money? Fret not. EV offerings from legacy car companies and new automakers are leaps and bounds better than they were five years ago when Tesla took over the industry. Hyundai and its subsidiary Kia, in particular, have outpaced other carmakers in offering fun and practical EVs. The new Kia EV9 is the best choice for buyers who want a true EV with three rows so they can accommodate six or seven passengers, and it’s a sleek-looking vehicle for its size. Its $57,000 starting price is not cheap, but it’s probably the best deal you can get for a true three-row electric vehicle right now.
The Ioniq 5 is a quirky mashup of a crossover and a hatchback. It’s got enough space to be practical as a family vehicle, but its dimensions aren’t quite like anything else on the market. In the EV-laden part of Los Angeles where I live, it’s the most common non-Tesla electric I come across.
Introduced in 2021, the F-150 Lightning’s game-changing feature is two-way, or “bidirectional,” charging — you can plug into your house and use the energy stored in the truck’s battery to back up your home’s power supply in case of a blackout. Chevy is following suit by putting this tech into the Silverado EV. But even if you’re just driving and not powering your home, the Lightning is impressive — its standard battery produces 452 horsepower, but that number can climb to 580 on more expensive versions, and both offer a ton of torque.
Today’s Rivians are luxury lifestyle vehicles, but they offer a lot for all that cash. The R1 vehicles are spacious and well-appointed on the interior while offering lots of power and range for the off-road lifestyle the brand projects — the high-end version of the SUV gets 410 miles of range with 665 horsepower. Other excellent luxury EVs at the top end of the market include the Lucid Air and Mercedes EQS, but the Air has the space limitations of a sedan (though it is a large one) and the Benz is likely to cost more than $100,000. Rivians are pricey, but they’re not that pricey.
The people’s affordable EV champion, the Chevy Bolt, got the ax last year, but GM has promised to bring it back for people who want a smallish EV that doesn’t cost a fortune. In the meantime, the “SE” version of the Hyundai Kona EV, a small SUV, starts around $36,000 and gets 261 miles of range. (There’s an even cheaper version with 200 miles of range, but trust me: Don’t buy any new EV with less than 250 miles of range — e.g. the Nissan Leaf, Fiat 500, Mini Cooper, or Subaru Solterra — unless you really, really like it.) Chevy finally electrified its huge-selling SUV and rolled out the Equinox EV; while it starts at $41,000 now, GM promises a $35,000 version soon to come.
There are a wide variety of PHEVs that are worth a look, but an especially compelling option is the Toyota Prius Prime. The entire Prius family of hybrids and plug-in hybrids just got a facelift for 2023 that is miles ahead of the frumpy, aging look the car previously had. And where the previous Prius Prime was limited to a puny 25 miles of electric range, today’s will do 44 — enough for lots of people to do their daily city driving without burning any gas.
Some vocabulary to get you started:
Since charging at home is the make-or-break feature that will make your electrified life more convenient than your gas-burning days, your first order of business is getting a Level 2 charger installed. You’re going to need an electrician for this one, since it requires stepping up the voltage (and might require installing a new breaker panel or running new wiring, depending upon your home). Be sure to get multiple quotes so you can compare work estimates and prices.
“When you buy from an EV dealer or Tesla or whomever, they might refer you to an electrician or an installer. There are companies that have services and websites where they do all the work for you. You plug in your address and information, and they'll recommend and refer you to an installer,” McDonald said.
How much this’ll cost you varies by where you live and how much work it’ll take to set up your home, but the national average is $1,200 to $1,500, McDonald says. The exception could be older houses that were not set up for anything close to the electrical load it takes to charge a car, so if you own a hundred-year-old home in New England with lots of original wiring, you might be in for a shock. Don’t forget, however, that lots of incentives are available for setting up EV infrastructure at your home. You might be eligible for a tax credit equal to 30 percent of the cost up to $1,000.
As far as charging away from home? Most EVs automatically show nearby charging stations on their touchscreen navigation systems and will route you to the necessary stops along a long drive. Teslas will even show you how many stalls are available at a given Supercharger and how many other cars are en route. As an EV driver, you’ll get to know the fast-chargers in your neighborhood and along your familiar highways, but you’ll also get to know sites like Plugshare that will display every charger of every speed and every plug throughout that country — invaluable for planning a journey.
As you get comfortable with your own driving habits, you’ll figure out whether you need to expand your choices by purchasing adapters or dongles that let your car charge at different kinds of plugs. For example, today’s non-Tesla EVs eventually will be able to charge at Tesla superchargers, but because they are still being built with the competing CCS standard, you’d need an adapter to allow today’s Ford Mustang Mach-E to use a Tesla plug. I have an adapter in my Tesla Model 3 to use the “J1772” plugs you find on the Level 2 charger at the grocery store, and I bought one for the NEMA 14-50 plugs common at an RV campsite — just in case I really get into trouble out there.
When a car brakes to slow down, energy is lost. But in an EV, some of it can be recaptured via regenerative braking, a system that captures the energy from waste heat and puts it back into the battery. This allows for an experience unavailable to the gasoline motorist called one-pedal driving: Take your foot off the accelerator and the car immediately slows itself down via the regenerative braking system. When I drive my Tesla Model 3, I only hit the brake pedal when I need to slow down in a big hurry; otherwise, I let off the accelerator and let the car coast to a stop. This system can add several miles of range back onto the battery if you’re coasting out of the mountains on a steep downgrade.
A word of warning: Many people don’t like regenerative braking, at least at first, because it feels jerky to have the car instantly slow itself down when you let off the accelerator. But trust me, you’ll get better and better at letting off the pedal slowly so you don’t make your passengers nauseous. It’s also possible in many vehicles to turn down the regen so it’s less aggressive.
For starters, think of all the car vocabulary you won’t need anymore. An EV’s power output can be measured in torque and horsepower, but say goodbye to combustion-specific vernacular like spark plugs, cylinders, pistons, or liters as a measure of engine size (unless you get a plug-in hybrid). No more mufflers, no exhaust or timing belts. An EV has no use for miles per gallon, though carmakers and the EPA try to measure an electric car’s efficiency in miles per gallon equivalent as a way to compare them with gas cars.
As the months and years go by, you’ll appreciate a number of differences in the EV owner’s lifestyle. Drivers needn’t bother with remembering the pesky oil change every 3,000 miles, nor with worrying about the lifespans of thousands of moving parts that come with internal combustion. (On the other hand, today’s EVs burn through tires faster than gas cars do because of their weight and their performance.)
There’s a lot more to learn, of course. Just remember: The first time you bypass the gas station — with its stinky fumes and pesky commercials screaming at you — to refuel your car in the comfort of your home, you’ll wonder why you waited so long.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
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.