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Few aspects of Biden’s climate law have spurred more controversy than the “three pillars” — a set of rules proposed by the Treasury Department for how to claim a lucrative new tax credit for producing clean hydrogen. Now, it appears, the pillars may be poised to fall.
The Treasury has been under immense pressure from Congress, energy companies, and even leaders at the Department of Energy to relax the rules since before it even published the proposal in December. The pillars, criteria designed to prevent the program from subsidizing projects that increase U.S. greenhouse gas emissions rather than reduce them, are too expensive and complicated to comply with, detractors argue, and would sink the prospects for a domestic clean hydrogen industry.
But lately, the campaign to dismantle the pillars has gotten both more forceful and more threatening. There’s the politically challenging hurdle that leaders of another federally-funded hydrogen program — the regional clean hydrogen hubs — have spoken out against the rules, arguing they threaten investment in hub projects and therefore job creation and economic development around the country. Then there’s the recent Supreme Court decision to overturn the precedent known as Chevron deference, which weakened agencies’ ability to defend their own rules and thereby emboldens any aggrieved parties to sue the Treasury if it keeps the pillars in place. Last week, 13 Democratic Senators, 11 of whom hail from states involved in the hubs, sent a letter calling on Treasury Secretary Janet Yellen to dramatically revise the rules or risk having them challenged in court.
The consequences of losing the three pillars can only be guessed at using models, which are built on assumptions and can’t predict the future with certainty. But proponents say the stakes couldn’t be higher. In their view, the pillars don’t just prevent carbon emissions. They mitigate the risks of rising electricity costs for everyday Americans. And without them, one of the most generous energy credits the government offers could become incredibly easy to claim, ballooning the federal budget.
The clean hydrogen tax credit was created by the Inflation Reduction Act, and offers up to $3 per kilogram of hydrogen produced, with the top dollar amount reserved for fuel that is essentially zero-emissions. The hope was that this would be enough to bring down the cost of hydrogen made from electricity to parity with hydrogen made from natural gas. If made cleanly, hydrogen could help decarbonize other carbon-intensive industries, like steelmaking and shipping.
At first, excitement for the tax credit ran high and companies quickly began making plans for new factories. Announcements of new hydrogen production capacity more than tripled from 2 million tons per year in 2021 to 7.7 million by the end of the following year, with another 6 million announced in 2023, according to the energy consulting firm Wood Mackenzie.
Then, after the Treasury’s proposal dropped last December, everything stopped. Under the three pillars, hydrogen companies that get electricity from the grid, which is still largely powered by fossil fuels, would be required to buy clean energy credits with specific attributes in order to mitigate their emissions and render their hydrogen “clean.” The credits must come from power plants located in the same region as the hydrogen production — the first pillar — that were built no more than 3 years before the hydrogen plant — the second pillar — and be purchased for every hour the plant is operating — the third pillar.
The three provisions work together to ensure that new clean power plants are brought online to meet hydrogen’s energy demand. But finding clean energy credits with these features is not easy — there aren’t many systems in place to do this yet. The Treasury took more than a year to publish its initial proposal, and leading up to it, companies lobbied aggressively for a more lenient version. There was so much money on the line that some businesses flooded the public with ads in newspapers and on streaming and podcast services delivering a cryptic warning that “additionality” — the requirement to buy energy from new power plants — was threatening to “set America back.”
Until businesses have clarity on whether the three pillars will stay or go, the industry is on ice. Several previously announced projects have been delayed. Few companies have reached offtake agreements, even provisional ones, for their hydrogen. Almost none have received a final investment decision or started construction.
“They’re losing advantage over other parts of the world,” Hector Arreola, a principal analyst for hydrogen and emerging technologies at Wood Mackenzie, told me. Momentum to develop hydrogen projects has started to shift back to Europe, which has already finalized its own definition of what constitutes clean hydrogen, he said.
It’s hard to imagine a path forward for the Treasury to keep the three pillars intact. Last week’s letter outlined the current state of play in stark terms. “Without significant changes to the draft guidance,” it said, “one of the most powerful job creation and emission reduction tools in the IRA will likely be hamstrung by future court challenges, congressional opposition, and unfulfilled private sector investment.”
Indeed, at least one company, Constellation Energy, has already suggested it would draw on the loss of Chevron deference to sue the agency if it didn’t remove the second pillar — the requirement to buy clean energy credits from recently-built power plants. (Constellation owns a fleet of nuclear power plants and is developing hydrogen projects powered by them.) In comments to the Treasury, Constellation wrote that the requirements for purchasing clean electricity “have no basis” in the law.
“People can always sue today to challenge regulations,” Keith Martin, a renewable energy tax lawyer at the firm Norton Rose Fulbright, told me. “It’s just that the odds of success have increased.” The Supreme Court’s ruling undermines regulatory agencies’ authority to interpret federal statute.
Another hydrogen company that has been fighting the three pillars, Plug Power, has already claimed victory: It put out a press release last month declaring that it anticipates receiving the tax credit, despite the fact that the rules are still not final and its projects would likely not qualify under Treasury’s proposal. The CEO, Andy Marsh, told a hydrogen trade publication that he’s “certain” the rules will be loosened. (Plug Power didn’t respond to a request for clarification by publish time.)
In their letter, the 13 Democratic senators propose that hydrogen producers should be able to purchase clean energy from existing power plants that are already supplying the grid if they are located in a state that has a clean energy standard, or as long as the power plant doesn’t reallocate more than 10% of its power to hydrogen production. They recommend losing the hourly matching requirement altogether and replacing it with annual or monthly matching, depending on when plants start construction. The senators also suggest allowing projects built in areas with “insufficient clean energy sources,” meaning places with suboptimal sun, wind, water, or geothermal energy, to source their power from farther outside the region.
Beth Deane, the chief legal officer for Electric Hydrogen, a company that has historically supported the three pillars, told me in an interview she thought these proposals represented a good compromise. “Bottom-line, the effectiveness of green hydrogen as a decarbonization tool is being artificially held back,” she said later in an email. “We need to give up perfection on both sides of the three-pillar debate and find the ‘good enough’ solution that lets early mover projects move forward with less stringent requirements.”
But other proponents told me the letter carves out so many loopholes that the pillars would remain in name only. Rachel Fakhry, the policy director for emerging technologies at the Natural Resources Defense Council, told me the letter was “outrageous” and “a giveaway buffet.” Daniel Esposito, a manager in the electricity program at the think tank Energy Innovation, told me he can’t imagine any scenario where these exceptions don’t result in an emissions boost rather than a reduction.
That’s because the electrolyzers used to produce clean hydrogen consume a lot of power and are expected to cause fossil fuel plants — which are more flexible than renewables — to run more often and stay open longer than they otherwise would. Without a requirement to buy power from new clean sources and a prescription to match operations with clean energy throughout the day, there will be no demand signals to bring (often more expensive) clean resources onto the grid that can, for example, produce power at night when solar panels aren’t generating. Power system models from Energy Innovation, Princeton University researchers, the Rhodium Group, and the Electric Power Research Institute have all found that there could be significant emissions consequences if the three pillars were relaxed in ways suggested in the letter.
“This effectively unlocks more than 10 million metric tons of dirty electrolytic hydrogen,” Esposito said, based on some back-of-the-envelope estimates. That would cost something like $30 billion per year. Put another way, he said, every $300 paid out by this program could subsidize one ton of CO2 emissions. Put a third way, he added, it could set the U.S. back two to three percentage points on its commitment under the Paris Agreement to reduce emissions 50% to 52% by 2030 — and we’re already off track.
The authors of the letter say they’re “confident” these fears are overblown. They cite a competing analysis published last year by the consulting firm Energy and Environmental Economics and paid for by the trade group the American Council on Renewable Energy, which found that requiring companies to match their operations with clean energy on an hourly basis, rather than an annual basis, does not ensure lower greenhouse gas emissions. They also cite research by an energy modeling group at Carnegie Mellon and North Carolina State University, which found that the difference in cumulative emissions between scenarios with less stringent requirements and the full three pillars comes out to less than 1% by 2039.
Paulina Jaramillo, a professor of engineering and public policy at Carnegie Mellon who worked on that research, told me the three pillars add a level of regulatory complexity to hydrogen production that is not worth the cost in terms of the emissions savings. In general, she said, she saw no need for the rules, and that the Treasury should subsidize electrolytic hydrogen regardless of where the electricity comes from. “We need to deploy this infrastructure,” Jaramillo told me. “We need to deploy it now so it’s available later.”
The other camp of researchers disputed Jaramillo’s group’s findings, chalking them up to a series of differences in assumptions and approach. They also call the industry’s bluff on the claim that the three pillars are too hard and expensive to comply with. Esposito pointed out that a small group of hydrogen companies has already told the Treasury that if the rules were finalized as-is, they planned to build enough capacity to produce more than 6 million tons of hydrogen per year.
Fakhry argued that we are already seeing the risks of losing the three pillars play out in real time as power-hungry industries like bitcoin mining and artificial intelligence grow. Bitcoin mines have driven up emissions and energy costs around the country. Utilities in Pennsylvania are sounding the alarm that an Amazon data center seeking to divert power from an existing nuclear power plant could shift up to $140 million in costs to other electricity customers. As I wrote in Heatmap last year, this debate is not just about hydrogen — think of all the other energy-intensive industries that will have to electrify before we can reach net zero.
Plenty of stakeholders still believe that the Treasury can find a middle ground by making the three pillars more flexible. The American Clean Power Association, which represents a wide range of energy companies, has proposed loosening the hourly matching aspect for projects that start construction before 2028. Fakhry acknowledged the need for flexibility, but her recommendations are much more narrow than the senators’. For example, she would allow hydrogen producers to buy power from existing nuclear plants, but only if they are at risk of retirement and the purchase would help keep them open. Esposito said Energy Innovation would support power procurement from existing clean resources that are curtailed, meaning they produce power that currently goes unutilized.
Both Fakry and Esposito also downplayed the threat of lawsuits, arguing that Treasury did exactly what it was instructed to do by the law. The IRA specifically says that hydrogen emissions should be calculated per a section of the Clean Air Act that says any accounting should include “significant indirect emissions.” Treasury has interpreted this to include the induced emissions caused by a hydrogen plant, and received letters of support from the Environmental Protection Agency and Department of Energy backing this interpretation.
However, as Martin, the tax lawyer, told me, by overturning Chevron deference, the Supreme Court has just given “677 federal district court judges greater latitude to substitute their own judgment for subject matter experts at the federal agencies.”
Asked for comment on the Senators’ letter, a Treasury spokesperson told me the agency is still considering the many thousands of comments the agency received on the proposed rules. “The Biden Administration is committed to ensuring that progress continues and that the IRA’s investments continue to create good-paying jobs, lower energy costs, and strengthen energy security.”
Even if Yellen heeds the Senators’ advice, the department may not be able to avoid a lawsuit. “We will use every tool available to us — including the courts — to either defend a strong final rule or challenge an unlawful one that reflects the asks in the letter,” Fakhry told me.
There’s also a realpolitik argument here that the industry might want this all to be over more than it wants to kill the three pillars. “The number one thing people want is business certainty,” Esposito told me. “I don’t think people want this to drag on for another two years.”
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In a press conference about the newly recast program’s first loan guarantee, Energy Secretary Chris Wright teased his project finance philosophy.
Energy Secretary Chris Wright on Thursday announced a $1.6 billion loan guarantee for American Electric Power to replace 5,000 miles of transmission lines with more advanced wires that can carry more electricity. He also hinted at his vision for how the Trump administration could recast the role of the department's Loan Programs Office in the years to come.
The LPO actually announced that it had finalized an agreement, conditionally made in January under the Biden administration, to back AEP’s plan. The loan guarantee will enable AEP to secure lower-cost financing for the project, for an eventual estimated saving to energy consumers of $275 million over the lifetime of the loan.
“These are the kind of projects where we’re going to partner with businesses to make our energy system more efficient, more reliable, ultimately lower cost,” Wright said on a call with reporters.
And yet in the past few months, the department has also canceled loan guarantees and grants for other transmission projects that were expected to provide those same benefits — including the Grain Belt Express, an 800-mile line set to bring low-cost wind power from Kansas to the Chicago metropolitan area in Illinois.
“We don’t care about authorship,” Wright told reporters, acknowledging that the AEP loan was conditionally approved by the Biden administration. “Not all of them were nonsense. The ones that are in the interest of the American taxpayers, in the interest of the American ratepayers, and there’s a helpful role for government capital — we’re happy to support those.”
When asked specifically why AEP’s proposal met his criteria while the Grain Belt Express didn’t, Wright first made an argument about cost. “I have nothing against the Grain Belt Express,” he said. “I suspect it’ll still be developed. But it’s far more expensive on a per mile basis since it’s a brand new transmission line.”
His subsequent comments, however, hinted at a more significant shift in approach. He went on to argue that the project came with an unacceptable amount of risk since the developers didn’t have buyers yet for the power coming down the line. It was trying to “close on arbitrage,” he said, by buying up cheap wind power that was stranded in Kansas and bringing it to a larger market. “It’s a more commercial enterprise,” he said. “That’s done with private entrepreneurs and private capital.”
It’s important to note that the Grain Belt Express loan guarantee would have been issued under an innovation-focused program within the Loan Programs Office that was specifically geared toward higher risk projects that banks won’t otherwise touch. The AEP project is part of a different program focused on more mature technologies, with a goal of reducing the cost of major utility infrastructure upgrades to ratepayers.
When I floated Wright’s comments by Jigar Shah, the former head of the Loan Programs Office under the Biden administration, he was flummoxed. “It’s nonsensical,” he said. To Shah, taking Wright’s risk aversion to its logical conclusion would mean, for instance, that the office should not fund any nuclear energy projects. “If this becomes a new standard, that means nuclear is dead in the United States,” he said.
AEP is the first developer to secure a loan guarantee under the Energy Dominance Financing Program, Congress’ new name a Biden-era program within LPO that offered loan guarantees to utilities to “retool, repower, repurpose, or replace energy infrastructure.” Initially called the Energy Infrastructure Reinvestment Financing Program and created by the Inflation Reduction Act, it focused on projects with climate benefits, like making efficiency upgrades to power plants or installing renewables on the site of a former coal plant.
In the Biden administration’s view, AEP’s project would “contribute to emissions reductions by supporting existing and new clean generation by expanding transmission capacity in the regions in which they operate.”
Trump’s One Big Beautiful Bill Act rebranded the program and removed any requirements that projects reduce emissions. On Thursday’s call, Wright seemed to imply that it wasn’t just the Biden-era loan program that had been renamed. “The Loan Program Office is being rechristened the Energy Dominant Financing — it is the rechristening of the same department,” he said in response to a question about the office’s remaining loan authority. The Department of Energy did not respond to my request for clarification.
None of that means that the potential emissions benefits from AEP’s project won’t materialize. Limited transmission capacity is one of the biggest obstacles for bringing new wind and solar power online, and reconductoring could also reduce line losses, making the overall grid more efficient.
The transmission project — which includes plans to rebuild some power lines and reconductor others — will ultimately increase capacity by more than 100%, a spokesperson for AEP told me. The first phase will involve upgrades to about 100 miles of wires across Ohio and Oklahoma, while future phases will tackle lines in Indiana, Michigan, and West Virginia, with the intent of meeting growing demand from data centers and manufacturing development, according to a press release.
When reporters asked Wright about the other conditional loan guarantees the Biden administration had issued under the Energy Infrastructure Reinvestment program that are still pending, the secretary stressed that he was looking for applicants that had identified a clear set of projects they would implement. “Many were done in a hurry, without really even having the projects that the loans would be associated with identified. You can end up with a grab bag of projects without a lot of say for where the money went,” he said.
Wright accused the Biden administration of failing to ask applicants to detail the impact the projects would have on taxpayers and ratepayers — a key question his colleagues are now asking.
Shah disagreed with that portrayal. The whole point of the program was to reduce interest rates for utilities and require them to pass on the benefit to ratepayers. All of the projects awarded conditional commitments met that bar, he said.
He warned that if the Trump administration didn’t honor the remaining conditional commitments to utilities under the program — all 10 of them — it risked losing the trust of any new companies it attempts to make similar deals with.
“Most of the nuclear projects that they’re looking to chase are not going to get closed until 2028. And so what signal are they sending? That projects that get approved in the last year of an administration are not going to be honored in the next administration?”
On a new loan guarantee, a Nord Stream 2 revival, and AI-aided oil recovery
Current conditions: As Tropical Storm Lorenzo looks likely to dissipate over water by Friday, AccuWeather has slashed the season’s forecast to six hurricanes from nine • Severe thunderstorms near Little Rock, Arkansas, and Memphis, Tennessee, are likely too spotty to relieve long-standing drought in the Mississippi River Basin • The Netrokona district of northeastern Bangladesh is scorching in temperatures nearing 100 degrees Fahrenheit.
A rendering of the future Cascade Advanced Energy Facility. Amazon
A year after Amazon invested in the small modular reactor developer X-energy, the tech giant has unveiled its plans to build a nearly gigawatt-sized plant in southeastern Washington, where it will install the nuclear company’s next-generation technology for the first time. The Cascade Advanced Energy Facility is set to begin construction “by the end of this decade,” with hopes of generating power from up to a dozen of X-energy’s 80-megawatt high-temperature gas-cooled reactors sometime “in the 2030s.” Amazon plans to build the plant in three phases, with four reactors at each stage, eventually reaching 960 megawatts in capacity. Located in Richland, Washington, along the Columbia River, the facility will nearly double the output of the Pacific Northwest’s only nuclear plant, the nearby Energy Northwest’s Columbia Generating Station.
In a sign of what Heatmap’s Katie Brigham called “the nuclear dealmaking boom” back in August, rival microreactor developer Oklo suggested at a recent public meeting in Tennessee that it may propose building some of its reactors near the Oak Ridge site of its debut nuclear waste recycling project, the Knoxville News Sentinel reported Monday. On Tuesday, meanwhile, the U.S. Army announced its new Janus program, which aims to supply bases by 2028 with microreactors like the ones Oklo aims to build, which generate 20 megawatts of electricity or less. The reactors would be owned and operated by private companies. “What resilience means to us is that we have power, no matter what, 24-7,” Jeff Waksman, principal deputy assistant secretary of the Army, told The Wall Street Journal.
The Department of Energy’s Loan Programs Office has largely revoked deals made under the previous administration since President Donald Trump returned to office. But on Thursday morning, the agency’s in-house lender announced a $1.6 billion loan guarantee to a subsidiary of utility giant American Electric Power to upgrade and rebuild about 5,000 miles of transmission lines across Indiana, Michigan, Ohio, Oklahoma, and West Virginia. “This loan guarantee will not only help modernize the grid and expand transmission capacity but will help position the United States to win the AI race and grow our manufacturing base,” Secretary of Energy Chris Wright said in a press release.
The move came a day after a federal judge blocked the Trump administration’s effort to fire thousands of federal workers amid the ongoing government shutdown. At a hearing Wednesday, U.S. District Judge Susan Illston, a Clinton appointee based in California, granted labor unions’ request for a temporary restraining order to halt the dismissals. The hearing took place at the same time White House budget director Russ Vought appeared on the late conservative commentator Charlie Kirk’s podcast to preview his plans to lay off as many as 10,000 federal workers as the shutdown continued. The hearing will pause the job cuts for the roughly 4,000 workers who received notice so far. Illson said during the hearing that she granted the temporary restraining order because administration officials had “taken advantage of the lapse in government spending, government functioning, to assume that all bets are off, that the laws don’t apply to them anymore, and that they can impose the structures that they like on the government situation that they don’t like,” News From The States reported. “Things are being done before they’re thought through — very much ready, fire, aim.” Nearly 200 employees at the Department of Energy began receiving notices last week, as I wrote in yesterday’s newsletter.
The underwater explosion of the Nord Stream 2 pipeline connecting Germany to Russia’s gas supply remains one of the world’s biggest geopolitical whodunnits, and Berlin’s fellow European Union members seem keen to keep it that way. In just the past two days, Poland and Italy blocked extradition requests to send suspected saboteurs to Germany for trial. But the Germans aren’t just looking to figure out who’s responsible for destroying the megaproject. The Federal Ministry for Economic Affairs and Energy is considering restarting the certification process for the pipeline, the daily newspaper Der Tagesspiegel reported Wednesday. The previous German government had ruled out a restart of the pipeline in March after news broke that Russian President Vladimir Putin’s business allies were angling to restore the project. In June, the new government under conservative Chancellor Friedrich Merz began examining legal avenues to block any future plans to reactivate the pipeline, the Financial Times reported at the time. But under current law, the economic ministry said this week a restart “cannot be ruled out in the medium term.”
Ohio passed a new law to fast-track energy projects on former coal mines and brownfields, Canary Media reported Wednesday. Called House Bill 15, the legislation took effect in August and lets the state’s Department of Development designate the former industrial sites as “priority investment areas” at the request of local governments. Roughly a third of Ohio’s 88 counties ban wind, solar, or both, but the language in the bill makes clear that “it was meant to be technology-neutral,” Rebecca Mellino, a climate and energy policy associate at The Nature Conservancy, told Canary’s Kathiann M. Kowalski.
A transition from coal could yield significant health benefits, as The New York Times reported on Tuesday. A recent study found that, when a coal-processing facility near Pittsburgh shut down, the number of emergency room visits for respiratory issues in the surrounding area dropped by about 20% in the month following the closure.
The world’s annual consumption of oil isn’t expected to peak until the mid-2030s, and by 2050 it will reach a cumulative 1 trillion barrels, according to the consultancy Wood Mackenzie’s forecast. But production that’s either already onstream or ready for development is expected to gradually decline to 650 billion barrels per year by the mid century. What will make up the difference? “Traditional exploration will play its part but can’t get anywhere near bridging a gap of this scale,” Wood Mackenzie analysts wrote in a blog post on Wednesday. “Even the 21st century’s biggest new play, Guyana, with 15 billion barrels of oil, barely makes a dent.” To identify potential new resources, Wood Mackenzie rolled out a new AI-powered benchmark called Analogues, which “uses a machine learning method known as clustering to identify each field’s closest matches across 60 different attributes spanning rock properties, fluid characteristics, and commercial factors.” The AI tool could increase the share of recoverable conventional oil reserves by nearly 42%.
A chart showing how the AI "analogues" could bolster oil drilling. Wood Mackenzie
Fusion energy is rapidly accelerating in the U.S., and the Department of Energy is poised to release a national plan for speeding up the deployment of the technology. In the meantime, states can prepare by beefing up regulatory capacity, speeding up permitting, clearing interconnection queues, and creating special tax credits. That’s according to a new roadmap from the Clean Air Task Force. “As fusion energy moves closer to commercial reality, states have a window of opportunity to prepare,” Jack Moore, a fusion policy consultant at CATF, wrote in a blog post. “Proactive policy design today can help states position themselves to create an effective environment for fusion energy deployment tomorrow.”
Editor’s note: This story has been updated accurately reflect oil demand by 2050.
This thing is a certified clunker.
Americans certainly got the message about the end of the EV tax credit. With the $7,500 benefit set to disappear at the end of September, electric vehicle sales surged to record numbers in the third quarter of 2025 as buyers raced to beat the deadline.
The rising tide lifted just about all EVs — but not the struggling Tesla Cybertruck. According to new numbers from Kelley Blue Book, Tesla sold just 5,385 Cybertrucks from July to September, less than half as many as it delivered during the same period in 2024. The company is now expected to sell around 20,000 of the metal EVs this calendar year. That’s down from around 50,000 last year, and less than 10% of the 250,000 total Elon Musk once predicted as the truck’s annual sales figure.
Cybertruck was well on its way to flop status before these sales numbers. With its purposefully jarring aesthetic, the EV for edgelords was never going to be as popular as Musk proclaimed, and that was before his relationship to Donald Trump and online provocations pushed many more people away from the Tesla brand. Cost didn’t help, either. Tesla once said it would sell a $40,000 basic version of Cybertruck, a price point that might have enticed some buyers beyond the Musk fanboys who became early adopters, but the cheapest one you can actually buy today is around $60,000.
Still, the vehicle’s third-quarter performance is particularly damning in comparison to nationwide EV sales, where the tax credit’s demise ignited a fire sale. Americans bought more than 430,000 EVs during the quarter, an increase of about 40% from the second quarter of 2025 and about 30% from the third quarter of last year. Popular vehicles including the Chevy Equinox EV, Hyundai Ioniq 5, Ford Mustang Mach-E, and Honda Prologue surged to sales of more than 20,000 during the quarter. Electric trucks including the Rivian R1T, Ford F-150 Lightning, and GMC Hummer EV saw sales increases despite having high prices that rival the Cybertruck’s.
Tesla itself, despite months of bad press, did well, too. The brand’s share of the overall EV market continues to wane, reaching a new low of 41%. But the surge temporarily stabilized its tumbling sales, with plenty of people snatching up Model 3s and Model Ys while the getting was good. Those two vehicles remained the two best-selling EVs in America, with Tesla selling more than 114,000 Model Ys and more than 53,000 Model 3s.
Yet the good times did nothing to spur driver interest in Cybertruck. In fact, public enthusiasm for the vehicle might be even lower than it seems, because it turns out that one of the top customers for Musk’s electric tank is Musk himself. Electrek reports that his other companies, such as SpaceX and xAI, have been accumulating Cybertrucks as their company cars. Tesla is replacing some of its own fleet with Cybertrucks, as well.
The move makes sense for Musk. Because of weak overall demand, Cybertrucks are sitting idle on lots; selling them to his businesses at least puts them to work. The scheme also might improve the appearance of Tesla’s sales numbers, Electrek speculates. By locking in some of these sales with a downpayment before the end of September, Tesla can deliver Cybertrucks to Musk’s other business in the weeks to come and still get the tax credit on them. The approach could boost sales numbers for a fourth quarter that’s likely to be difficult with the disappearance of the federal incentive.
Now that Cybertruck has become Elon’s Edsel, Tesla’s hopes for an EV sales revival lie largely with the new “Standard” versions of its two best-sellers. These trim levels strip away some of the amenities from the Models 3 and Y to bring their starting prices down to $37,000 and $40,000, respectively. It’s far from clear that this will succeed. Anyone shopping for an EV solely on price could wait for the upcoming new versions of the Nissan Leaf and Chevy Bolt, which are expected to come in at $30,000 or less. The Equinox’s $35,000 starting price, five-grand less than even the budget Model Y crossover, has spurred its recent success.
Still, with 320-plus miles of estimated range and at least some of Tesla’s best features, the budget versions could be compelling cars at those prices. At the very least, they’ll speak to more drivers than the Cybertruck does.