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Economy

Tesla Profits Fell 71% in Q1

On earnings, a White House denial, and hydrogen

Tesla Profits Fell 71% in Q1
Heatmap Illustration/Getty Images

Current conditions: A fire in New Jersey’s Ocean County has grown to 8,500 acres, prompting thousands of evacuationsParts of South Africa are bracing for “damaging thunderstorms” It will be almost 80 degrees Fahrenheit in Moscow today — nearly 30 degrees above average.

THE TOP FIVE

1. Tesla’s profit fell 71% in Q1, Musk promises return

Tesla’s profits dropped 71% year-over-year, and its automotive revenue dropped 20% over the same period, the company reported Tuesday. CEO Elon Musk subsequently assured investors and analysts that he plans to spend more time focused on the automaker, reducing his time in Washington to “a day or two per week” for the duration of Donald Trump’s presidency. Tesla sales are down “because of intense competition from Chinese carmakers like BYD, a lack of new models, and Mr. Musk’s support of far-right causes,” The New York Timeswrites, although the company remains the most valuable car maker in the world by market capitalization. Tesla declined to give a specific growth outlook for the rest of the year.

There may, however, be further trouble ahead for the company’s fastest-growing business: its energy storage products. Tesla’s Chief Financial Officer Vaibhav Taneja admitted that “the impact of the tariffs on the energy business will be outsized” since it sources battery cells from China. This comes as Tesla’s “energy segment — which includes the company’s battery energy storage businesses for residences (Powerwall) and for utility-scale generation (Megapack) — has recently been a bright spot for the company, even as its car sales have leveled off and declined,” my colleague Matthew Zeitlin writes.

That’s if the tariffs last. Trump’s Treasury Secretary Scott Bessent said Tuesday he anticipates a “de-escalation” with China in the “very near future,” and President Trump added, “We’re going to be very nice and they’re going to be very nice, and we’ll see what happens.”

2. White House says it won’t go after environmental nonprofits

The White House denied reports that it is considering revoking the tax-exempt status of environmental nonprofits, E&E Newsreported. Despite rumors that the administration would issue an executive order as soon as Tuesday, an official confirmed to the publication that “no such orders are being drafted or considered at this time.”

I spoke to Jillian Blanchard, the vice president of climate change and environmental justice at Lawyers for Good Government, earlier on Tuesday about such a hypothetical move by the administration. “The president doesn’t have that authority,” she told me, noting that “there’s an actual law against them directing Treasury to pull tax status.” But Blanchard said that while it isn’t accurate that an executive order could, with the stroke of a pen, take away environmental groups’ tax-exempt status, “part of the process here is trying to fear-monger and get people afraid to give money to 501(c)(3)s.” She suggested nonprofit groups prepare for whatever may be ahead by staying informed, potentially seeking pro bono assistance from groups like Lawyers for Good Government, and getting their tax documentation in order — just in case.

3. Study looks at ‘realistic’ roles for hydrogen

David McNew/Getty Images

Fuel cell cars and space heating are “among the least promising” applications of hydrogen, according to a new study published Tuesday by Nature. The research, which explored the “realistic roles” for hydrogen in the energy transition, found that it should be “deployed strategically in areas where it seems likely to have greatest potential for cost and sustainability benefits” — primarily in industry, long-duration energy storage, and long-haul transport. Other conclusions the researchers made include:

  • Clean hydrogen “must have low emissions across the entire supply chain” if it is to meet decarbonization goals, with the researchers highlighting concerns about upstream emissions, water scarcity, and organic pollution.
  • Renewable energy is more effectively used to displace fossil fuels in power generation, heating, and transportation than for green hydrogen production — at least in the short term.
  • Low-carbon hydrogen will, however, be essential to decarbonizing petrochemicals, fertilizers, steelmaking, heavy transport, and long-duration energy storage; these should be the deployment priorities.

Read the full report at Nature.

4. Green economy jobs are growing more slowly than expected

New York City created just 2,184 new “green” jobs in 2023, per a new report covered by Inside Climate News. The number significantly undermines claims by Democratic Mayor Eric Adams that the green economy would create 400,000 jobs in the city by 2040.

The New York City Economic Development Corporation has estimated that 40% of the city’s green jobs would come from the decarbonization and electrification of buildings. But as Inside Climate News points out, “If the implementation of Local Law 97, which limits city building emissions, is muted, or renewable energy investments suffer due to the choices made at the federal level, green job growth could be much slower than planned.”

5. Major oil companies are offshoring engineering and geology jobs to India

Chevron, BP, ExxonMobil, and other major oil companies are offshoring specialized jobs, such as engineering, geology, and environmental science, to countries like India, where they can pay workers a third or a fourth of what they pay their U.S. counterparts, The Wall Street Journalreports. Chevron, for example, has announced plans to cut as many as 8,000 jobs worldwide while simultaneously expanding its global center in India by 600 jobs. “Many managers have told me comments like, ‘Our remote operations are typically 90% as efficient, but 70% of the cost, so it’s a great deal for us,’” Stanford University economist Nicholas Bloom explained to the Journal. In the U.S., oil and gas jobs have declined by almost 15% since mid-2019.

THE KICKER

“You’re looking at potentially no growth from U.S. oil this year.” —Matthew Bernstein, a senior analyst of upstream research at Rystad Energy, in comments to the Financial Times about how Trump’s tariffs are “one of the biggest headwinds” the shale industry has faced in a long time.

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Q&A

How the Wind Industry Can Fight Back

A conversation with Chris Moyer of Echo Communications

The Q&A subject.
Heatmap Illustration

Today’s conversation is with Chris Moyer of Echo Communications, a D.C.-based communications firm that focuses on defending zero- and low-carbon energy and federal investments in climate action. Moyer, a veteran communications adviser who previously worked on Capitol Hill, has some hot takes as of late about how he believes industry and political leaders have in his view failed to properly rebut attacks on solar and wind energy, in addition to the Inflation Reduction Act. On Tuesday he sent an email blast out to his listserv – which I am on – that boldly declared: “The Wind Industry’s Strategy is Failing.”

Of course after getting that email, it shouldn’t surprise readers of The Fight to hear I had to understand what he meant by that, and share it with all of you. So here goes. The following conversation has been abridged and lightly edited for clarity.

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Hotspots

A New York Town Bans Both Renewable Energy And Data Centers

And more on this week’s most important conflicts around renewable energy.

The United States.
Heatmap Illustration/Getty Images

1. Chautauqua, New York – More rural New York towns are banning renewable energy.

  • Chautauqua, a vacation town in southern New York, has now reportedly issued a one-year moratorium on wind projects – though it’s not entirely obvious whether a wind project is in active development within its boundaries, and town officials have confessed none are being planned as of now.
  • Apparently, per local press, this temporary ban is tied to a broader effort to update the town’s overall land use plan to “manage renewable energy and other emerging high-impact uses” – and will lead to an ordinance that restricts data centers as well as solar and wind projects.
  • I anticipate this strategy where towns update land use plans to target data centers and renewables at the same time will be a lasting trend.

2. Virginia Beach, Virginia – Dominion Energy’s Coastal Virginia offshore wind project will learn its fate under the Trump administration by this fall, after a federal judge ruled that the Justice Department must come to a decision on how it’ll handle a court challenge against its permits by September.

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Spotlight

The Wind Projects Breaking the Wyoming GOP

It’s governor versus secretary of state, with the fate of the local clean energy industry hanging in the balance.

Wyoming Governor Mark Gordon.
Heatmap Illustration/Getty Images

I’m seeing signs that the fight over a hydrogen project in Wyoming is fracturing the state’s Republican political leadership over wind energy, threatening to trigger a war over the future of the sector in a historically friendly state for development.

At issue is the Pronghorn Clean Energy hydrogen project, proposed in the small town of Glenrock in rural Converse County, which would receive power from one wind farm nearby and another in neighboring Niobrara County. If completed, Pronghorn is expected to produce “green” hydrogen that would be transported to airports for commercial use in jet fuel. It is backed by a consortium of U.S. and international companies including Acconia and Nordex.

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