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Kneecapping demand from clean energy is a funny way to boost supply.
The technology that undergirds decarbonization requires a lot of minerals, and those minerals are often found or processed overseas — really often in China. The Biden administration thought this was a problem, so as it subsidized the domestic use and manufacture of solar panels, wind turbines, and battery-electric vehicles and the deployment of green energy, it also tried to nudge the critical mineral industry mining and refining industries to be more American, with subsidies for battery plants and loan guarantees for lithium mines.
The Trump administration halfway agrees with its predecessors: It wants to see an American minerals industry, but it isn’t so much interested in the renewable energy part. During his Day One fusillade of executive orders, the president hammered the wind industry, scrapped the Biden administration’s goals for vehicle electrification, and encouraged faster permitting for nearly every type of energy generation other than wind, solar, and storage.
While new clean energy projects won’t disappear overnight, the growth trajectory of the sector may be imperiled, which in turn means that incremental future demand for critical minerals in the United States has likely diminished. Demand certainty is incredibly important for the mining sector — it takes an estimated 29 years from resource discovery to production in the United States, according to S&P — as exploration is a highly uncertain and expensive process. Because of this, the industry as a whole is already incentivized to undersupply the market, explained Arnab Datta, the managing director of policy implementation at Employ America.
“If there’s uncertainty about demand, it will hold back investment,” Datta told me. “If you under-invest, you get suboptimal profits. If you over-invest, the risk is bankruptcy.”
Many minerals projects the Biden administration greenlit and supported were closely tied to downstream decarbonization goals. The nearly $1 billion loan guarantee for the Ioneer Rhyolite Ridge refining project for lithium mined in Nevada, for instance, would “finance the on-site processing of lithium carbonate that would support production of lithium for more than 370,000 EVs each year,” the Energy Department’s Loan Programs Office said in an announcement on January 17.
In December, the LPO issued a $750 million conditional loan guarantee for a synthetic graphite facility in Tennessee that was “expected to produce 31,500 metric tonnes per year of synthetic graphite, which can support the production of lithium-ion batteries for approximately 325,000 EVs each year.”
And America’s first graphite processing plant, which supplies Tesla’s battery-making operations from Vidalia, Louisiana, does so with help from a $100 million Department of Energy loan.
The Trump approach to stimulating investment is still evolving — the Department of Energy doesn’t yet have a confirmed secretary — but it appears to focus largely on permitting mining and refining projects with a focus on the defense industrial base.
The executive order “Unleashing American Energy” asks agencies to “identify all agency actions that impose undue burdens on the domestic mining and processing of non-fuel minerals and undertake steps to revise or rescind such actions.” Trump also asked the secretaries of the interior and energy to make “efforts to accelerate the ongoing, detailed geologic mapping of the United States,” and “ensure that critical mineral projects, including the processing of critical minerals, receive consideration for Federal support.”
Many of the minerals used for renewables and clean energy projects also have defense applications. The most obvious example are the suite of minerals found in batteries — lithium, cobalt, graphite — which are as key for powering electric vehicles as they are for building drones.
“If you’re going to make a Venn diagram of what critical minerals you need for sustainable energy technologies, battery technologies, solar cells, and electricity infrastructure, that circle of critical minerals sits inside of the circle of critical minerals that you need for defense purposes,” explained Catrina Rorke, the senior vice president for policy and research at the Climate Leadership Council.
But renewable energy applications can quickly outpace defense. According to the Breakthrough Institute’s Seaver Wang, “In many cases the business for these projects would be difficult to sustain on the defense applications alone unless DOD is throwing tons of money to make those projects too big to fail.”
The F-35 fighter jet uses around 900 pounds of rare earth elements, and the Pentagon is looking at maintaining a fleet of about 2,400. A single offshore wind turbine, meanwhile, can use up to thousands of pounds. To get a sense of how much rare earth metal even a modestly sized offshore wind operation requires, you’d have to look at something like a destroyer, which needs over 5,000 pounds of them.
Not all analysts see a strong tension between the Trump administration’s renewable energy policy and its critical minerals policy, however. Morgan Bazilian, director of the Payne Institute and a public policy professor at the Colorado School of Mines, told me that it was “simplistic” to say “you need supply and demand to meet somewhere.”
“There’s still going to be a need for copper whether or not the U.S. builds a lot of transmission lines,” Bazilian said. “There’s still going to be the need for light and heavy rare earths, and there’s a need for tellurium and nickel on global markets. The problem is not robust demand in the United States, which is one piece of the pie.”
No matter what these minerals are used for or where their ultimate destination is, the United States is desperately looking for any foothold in mining and processing in order to compete with China, which dominates many sectors of the industry.
“What we need to do now is to get some domestic mining and processing going,” Bazilian said. The U.S. “doesn’t have to be dominant or be the biggest producer of these things. We need to get on the map a little bit. We have precious little going on.”
Even if U.S. demand slows, “I don’t think it will stop,” Bazilian said. “I don’t see that in itself kneecapping anything.”
Regardless of the level of demand, it will need mines and processing facilities to meet it, which requires permitting and financing. What investors and companies looking to open mines and refining facilities need is not just assurance of demand over the long term, Rorke explained, but also the go-ahead to build.
“If you’re only focused on the demand side,” Rorke said, “you’re really investing in a long-term problem because you are not matching it with the supply that can come on to satisfy that demand over the long term.”
Editor’s note: This story has been updated to correct Datta’s affiliation and title.
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U.S. EV sales have been way up — just not for the domestic champion, which sank to its worst-ever market share in August.
Americans are rushing to buy electric vehicles ahead of the expiration of the $7,500 consumer tax credit at the end of this month.
And fewer of those cars are Teslas.
Preliminary data from Cox Automotive for August, first shared with Reuters, shows that the month was the best for EVs in U.S. history, with just over 146,000 units sold, comprising almost 10% of total car sales that month. At the same time, Tesla’s share of the EV market hit its lowest recorded level, down to a (still sizable) 38%.
Cox’s data puts Tesla sales at 55,000 for the month, which is up a little more than 3% from July but down over 6% from a year prior, while the company’s total market share fell from just over 40% in July and 45% in the first half of the year. In 2020, by contrast, Tesla’s share of U.S. EV sales was about 80%. Overall, Cox estimated that Tesla sales in the U.S. are down about 9% so far this year.
“The U.S. EV market is in a far more dynamic place than a few years ago,” Corey Cantor, the research director at the Zero Emissions Transportation Association, told me in an email. “Most automakers now offer electric vehicle models in multiple segments. There are multiple electric vehicles available below the average price point of a new car at $48,000.”
Entering this new phase means that the EV market is getting less Tesla-centric, almost by definition. Morgan Stanley reported that electric vehicle sales were up 23% in August from a year ago, while overall car sales were up 7.5% — although even amidst this industry-wide growth, Tesla sales fell more than 3% year over year, while electric vehicle sales were up 42%.
Much of that EV market growth comes down to timing. “Early indications are that EV sales are in fact surging over the past two months, following the changes that will phase the credit out at the end of this month. We’ve seen record sales for EV models last month, such as the Honda Prologue,” Cantor said. This likely means some portion of these sales are being “pulled forward” from buyers trying to beat the deadline and these sales numbers will not persist through the rest of the year.
As Tesla’s stranglehold over the U.S. EV market may be weakening, so too is its hold on the international market. Thanks to CEO Elon Musk’s association with right wing politics in the U.S. and abroad, and to fierce competition from Chinese EV leader BYD, Tesla’s sales have fallen dramatically in Europe. Globally, BYD overtook Tesla in sales last year.
None of that seems to matter much to Tesla’s leadership, or to its shareholders. On Friday, the company’s board of directors put forward a new compensation plan for Musk that would boost his ownership of the company to around 25% and put him in line for a $1 trillion payday if he meets growth and performance targets over the next decade.
A Delaware court last year threw out an earlier Musk pay package, arguing that Musk was too close to the board of directors for them to objectively determine his pay in the interest of all the company’s shareholders. (He subsequently relocated Tesla’s official headquarters to Austin, Texas, explicitly to avoid Delaware jurisdiction.) Musk has said that he wants to own about 25% of the company, a significant upgrade from the roughly 15% he owns currently.
Tesla’s board said in a recent regulatory disclosure that Musk had “reiterated that, if he were to remain at Tesla, it was a critical consideration that he have at least a 25% voting interest in Tesla,” and that “Mr. Musk also raised the possibility that he may pursue other interests that may afford him greater influence if he did not receive such assurances.”
The board’s disclosure also confirmed that Musk sees the future of Tesla as going far beyond selling cars to people. The filing said that “through its discussions with Mr. Musk,” the special committee in charge of coming up with his compensation had “identified four core product lines that would drive Tesla’s future transformation”: Tesla’s vehicle fleet, automation (i.e. Full Self-Driving) software, its robotaxi product, and humanoid robots. Tesla’s robotaxi service is available on a select basis in Austin, with no date yet indicated for a wider rollout, while its humanoid robots — which Musk has said will one day make up 80% of the company’s value — are due to reach “scale production” next year, Musk said on a recent earnings call.
Tesla stock actually rose on the news of the proposed compensation package, likely because Tesla shareholders viewed it as a way to retain Musk and keep his attention on the company.
Longtime Tesla bull Adam Jonas, an analyst at Morgan Stanley, said in note to investors that the compensation deal now means that Musk “has an incentive to focus on Tesla more than ever.” Jonas also, like many Tesla bulls, sees its business of selling cars to people as just a small portion of its overall value — in his case, $76 a share, compared to his $410 a share price target or the roughly $346 a share price the stock was trading at on Monday afternoon.
Still, the company today is largely a pretty normal car company, at least according to its income statement. In the second quarter of its current fiscal year, some $16.6 billion of Tesla’s $22.5 billion in revenue came from cars, with $2.8 billion coming from its energy business and $3 billion coming from “services and other revenues.”
Declining market share in its biggest product line isn’t completely meaningless, even if many Tesla shareholders see a glorious future for the company beyond the automobile trade.
Looking ahead, Cantor said to expect the EV market to get even more diverse.
“Moving forward, we will continue to see automakers innovate in the EV space. Timelines may change and models will vary by automaker, but high-profile launches expected over the next year include the Rivian R2, a new version of the Chevrolet Bolt EV, as well as more affordable models by Lucid and Kia,” Cantor said in his email.
“While the 30D [consumer electric vehicle tax] credit’s phase out will have a real impact on sales the next quarter or two here in the U.S.,” he added, “the long-term trend of excitement and innovation continues to be in the launch of new electric vehicles.”
On PJM pressure, Orsted’s approval, and a carbon storage well milestone
Current conditions: Hurricane Kiko, now a Category 3 storm, is expected to bring heavy rainfall to Hawaii this week as wind speeds roar up to 125 miles per hour • Dry air in the Caribbean is stymying any tropical storm from gaining wind intensity • Tropical Storm Tapah strengthened to a typhoon over China on Monday morning.
U.S. immigration authorities arrested hundreds of South Korean workers at a Hyundai battery plant in Georgia, in a move already prompting geopolitical blowback that could threaten efforts to reestablish manufacturing in the United States. After U.S. Immigration and Customs Enforcement officers conducted their biggest workplace raid since President Donald Trump took office again on Thursday, the South Korean government chartered planes to ferry detained workers back home. At an emergency meeting in Seoul, South Korean Foreign Minister Cho Hyun said his government was “deeply concerned,” and that he would consider flying to the U.S. to meet with the Trump administration. Most of the 475 people arrested at the electric vehicle battery plant — a joint venture between automaker Hyundai and the battery company LG Energy Solution – were South Korean nationals. Videos of the arrests showed the workers’ wrists and ankles wrapped in chains as they were led away.
“You are already poorer because of this idiocy, you just don’t know it yet,” Heatmap’s Robinson Meyer wrote in a post on X, in response to a video of ICE agents chaining workers at the wrists and ankles. “This will crush American manufacturing know-how.”
Under a solar panel in Pennsylvania. Drew Hallowell/Getty Images for NASCAR
Political pressure is mounting on the nation’s largest grid operator to make hooking up new power sources easier amid surging demand. In remarks made as part of a public process for overhauling the grid’s rules, the governors of Pennsylvania, New Jersey, Maryland, and Illinois called on the PJM Interconnection to streamline the process to connect new resources to the grid, citing ERCOT, the independent power system in Texas, as an example of a successful model. “We must open all feasible pathways to bring additional electrons to our grid,” the governors said in a public comment highlighted on X by energy researcher Tyler Norris.
The push comes as PJM is fending off criticism from big tech companies and data centers over a proposal that would allow the grid to encourage big power users to pare back consumption when demand is particularly high. The backlash isn’t surprising to Abraham Silverman, a former lawyer for the New Jersey Board of Public Utilities and an assistant research scholar at Johns Hopkins. As he explained to Heatmap’s Matthew Zeitlin: “The existing rules are financially very favorable to the data centers.” The focus on adding new generation rather than curtailing new load is consistent with that more traditional approach.
Trump once called the Infrastructure Investment and Jobs Act former President Joe Biden signed in 2021, better known as the Bipartisan Infrastructure Law, “a loser for the U.S.A.” that “patriots will never forget.” Now he’s taking credit for the projects it’s funding. In recent months, signs have gone up around the U.S. bearing the president’s name on bridge projects in Connecticut and Maryland, rail-yard improvements in Seattle, Boston, and Philadelphia, and the replacement tunnel on an Amtrak route between Baltimore and Washington, according to The New York Times. “PRESIDENT DONALD J. TRUMP” a sign by the road in southern Connecticut reads. “REBUILDING AMERICA’S INFRASTRUCTURE.”
Republicans had previously balked at similar signs bearing Biden’s name. As Heatmap’s Emily Pontecorvo wrote, “Senator Ted Cruz of Texas lodged a grievance with the Office of Special Counsel alleging Biden had violated the Hatch Act by using taxpayer dollars to pay for ‘nothing more than campaign yard signs.’” Republican Senator Joni Ernst of Iowa (who recently announced her intention not to seek reelection after becoming a target of Trump supporters) gave the signs one of her monthly “squeal awards” last year, demanding to know how much they cost.
Orsted’s shareholders on Friday backed the company’s plans to shore up its finances by raising $9.4 billion on the stock market to fend off attacks from the Trump administration. The approval came even as the world’s largest offshore wind developer cut its profit guidance for the year as lower-than-expected wind speeds dinged the company’s planned power output for the year. At an investor meeting in Copenhagen that the Financial Times described as “extraordinary,” at least 98.5% of shareholders voted in favor of authorizing the issuance of new shares.
The Sweetwater Carbon Storage Hub completed drilling for the nation’s deepest carbon storage well in Wyoming. The project, a collaboration between the University of Wyoming’s School of Energy Resources and the company Frontier Infrastructure holdings, reached a vertical depth of 18,437 feet. Preliminary data from the well “is highly encouraging,” according to the nonprofit newsroom Oil City News. “This deeper well gives us a more complete picture of the subsurface, reinforcing our commitment to building scalable, practical carbon solutions for Wyoming’s key industries,” said Robby Rockey, president and co-CEO of Frontier.
Still, as I reported in this newsletter last week, the new research from the International Institute for Applied Systems Analysis and Imperial College London found “a prudent global limit” of around 1.46 trillion tons of CO2 that can be safely stored in geologic formations. That’s “almost 10 times smaller than estimates proposed by industry that have not considered risks to people and the environment.”
A long-term study spanning more than 50 years found that beavers that have returned to the Evo region in southern Finland increased habitat biodiversity as a result of how they engineer the ecosystem with dams. “While the positive effects of the changes brought about by beavers in the boreal region are significant, their long-term effects on biodiversity dynamics remain partly unknown. This is why long time series are needed to understand the far-reaching ecological effects of these changes,” Petri Nummi, a senior lecturer at the University of Helsinki and an author of the paper, said in a press release.
Using more electricity when it’s cheap can pay dividends later.
One of the best arguments for electric vehicles is the promise of lower costs for the owner. Yes, EVs cost more upfront than comparable gas-powered cars, but electric cars are cheaper to fuel and should require less routine maintenance, too. (Say goodbye to the 3,000-mile oil change.)
What about the societal scale, though? As the number of EVs on the road continues to rise, more analysts are putting forth the argument that EV ownership could lead to lower energy bills for everyone, even the people who don’t buy them.
The idea may be counterintuitive, given the prevailing narrative about voracious appetite for electricity. EVs do require a lot of energy. Electricity demand for EVs in the U.S. jumped 50% from 2023 to 2024 alone as more Americans bought electric, and the research group Ev.energy says demand could triple by 2030. Studies suggest that replacing every internal combustion vehicle in the country with an EV would eat up as much as 29% of American electricity.
Meanwhile, the grid is struggling to keep up — it is, after all, much more difficult to add more megawatts to the capacity of our power system than it is to put a few more EVs on the road. The obvious inference would then seem to be that a battery-powered car fleet could cause an energy crunch and spike in prices.
A new report from Ev.energy, however, argues that if we got smarter about how and when we charge our cars, their presence could actually cut costs for the average American by 10%. The gains could be even better if EVs reach their true potential as a way to give the grid a unique kind of flexibility and resilience.
Compare an electric car to a data center, the other application painted as a ticking time bomb for electricity prices. Worries about the energy-gobbling habits of AI-powering servers are well-founded, given their 24/7 appetite. An EV, however, needs to charge only once in a while. In fact, most people don’t need to charge every day, given the range of modern EVs and the driving habits of the typical American.
As we've covered before, it’s when you charge that matters. Optimizing EV charging can be a helpful way to ease pressure on the power grid and align EV charging with the availability of clean energy.
Here in California, which has far and away the most EVs in America, TV commercials remind us to use less energy between 4 p.m. and 9 p.m., when the state is dealing with rising residential energy use just as solar power is tapering off for the day. It would cause a grid crisis if every EV owner charged as soon as they got home from work. Having EV owners charge their cars overnight, a period of low demand, helps ease the pressure. So does charging during midday, when California sometimes has more solar energy than it knows what to do with.
When EVs charge in this mindful manner, using energy during times of day when it’s cheap for utilities to provide it, data suggests they can effectively push down electricity prices for everyone. Says one recent report from Synapse Energy: “In California, EVs have increased utility revenues more than they have increased utility costs, leading to downward pressure on electric rates for EV-owners and non-EV owners alike.” As the NRDC points out, California has revenue decoupling in place for its utilities, so “any additional revenue in excess of what was anticipated is returned to all utility customers — not just EV drivers — in the form of lower rates.”
Those rosy figures depend upon drivers following this model and charging during off-peak hours, of course. But with time-of-use rates giving them the financial motivation to charge overnight rather than in the early evening, it’s not an outrageous presumption.
And there’s something else that differentiates EVs from other applications that consume lots of electricity: Thanks to their ability to store a large number of kilowatt-hours over a lengthy period of time, electric vehicles can give back. EVs can be a cornerstone of the virtual power plant model because the cars — those equipped with bidirectional charging capabilities, at least — could feed the energy in their batteries back onto the grid to prevent blackouts, for example. In Australia, the Electric Vehicle Council recently crunched the numbers to argue in favor of incentivizing residents to install vehicle-to-grid infrastructure. Their math indicates Australia would reap more than the government invests because these connected EV would cut everyone’s electricity price.
It’s getting more expensive for the individual to own an EV — the federal tax credit for buying one disappears at month’s end, and punitive yearly fees for EV ownership are coming. Yet it seems that driving electric might be doing your neighbors a favor, and not just by clearing the air.