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You can take advantage of rising inventory.
First of all, I want everyone to just take a deep breath and calm down.
Despite data that indicates much slower sales than many anticipated, the American electric vehicle market is not collapsing before it ever really took off. EVs are not failed experiments, public and private investments into battery plants and public chargers are not about to evaporate, and we are not collectively doomed to be driving coal-rolling trucks for lack of a better option until we’ve extinguished most non-cockroach life on this planet.
Three things are true, however. The first is that EVs remain expensive like any new technology, and while that means they aren’t flying off dealer lots in record time, sales are still growing fast — including globally. The second is that Tesla is still posting record revenues and huge sales. Its rapid-fire price cuts have paid off handsomely; the Model 3 and Model Y are lapping everyone else in the EV race because they’re screaming deals. That fact alone has me not worried about declining EV demand.
The third thing is that now may actually be a good time to buy an EV, if you know where to look.
Do you feel better now?
EV adoption remains a long-term (though increasingly difficult) goal for many automakers. More EVs are coming and prices are expected to drop over time as the technology develops and batteries are built stateside. But while immediate action is needed on multiple fronts to reduce carbon emissions, it’s tough to ask many families to spend $60,000 on a Hyundai in this economy. And EVs piling up at car dealerships reflects this trend, but it doesn’t reflect a lack of interest, experts told me.
“I don't think that's fair to say no one wants EVs,” said Brian Moody, the executive editor of Cox Automotive, the research firm that sounded the alarm about EV inventory increasing. “I don't think that's accurate.”
Moody added, “One thing that we see is that about 50% of shoppers say they're open to the idea of getting an electric car, so that's a pretty good number and that probably bodes well for the future. But that doesn't necessarily translate to sales tomorrow.”
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Cox Automotive’s data indicates U.S. car dealers had a more than 100-day supply of EVs on their lots on average by the end of June — 60 days is considered healthy — and the average EV lists for $63,486. So at a time when interest rates are high and car buyers’ budgets are squeezed, Moody said they may find a $36,000 Hyundai Sonata Hybrid more appealing than a $50,000 fully electric Hyundai Ioniq 6. “I think the good thing about EVs today is they provide consumers a choice,” he said.
Tom McParland has firsthand experience helping buyers to navigate these choices. He runs a consulting service that helps people purchase cars and contributes car-buying advice columns to publications like Jalopnik. (Full Disclosure: I was previously editor-in-chief of that site, where he was one of our contributors.) His service helps about 20 to 30 people a month to buy a car.
McParland said that last year, he was turning away customers who wanted to buy a Ford F-150 Lightning or a Mustang Mach-E because there were none to be found or because dealer markups were so extraordinarily high.
Now, he’s seen a “mixed bag” lately when it comes to EVs: “If I look at how many of my clients in 2023 are requesting EVs or plug-in [hybrids], there’s definitely an uptick overall compared to last year,” he said. However, “as soon as the tax credit rules changed, I saw a big dropoff in the level of interest for those cars,” he said. “Nobody was asking me for Ioniq 5s,” he added, referring to Hyundai’s cyberpunk-looking Model Y competitor.
For a few months at the start of the year, nearly every EV qualified for generous tax breaks. But by spring, only North American-built cars with North American-built batteries could get the incentives, excluding options from Kia, Hyundai, Volvo, BMW, Toyota, and others. And while car dealers don’t want those cars taking up space on lots forever, there’s only so much they can do — or are willing to do, McParland said.
“Dealers can only go so deep until the math no longer makes sense,” he said. “They are not going to discount that car 20% and lose 50% on the back end just to move it.” Also, while a kind of loophole allows more brands to qualify for tax breaks if they’re leased, McParland said he’s a bit skeptical that this always equals a good deal because the price cuts are baked into a lower residual value at the end of your term.
But it’s not that buyers aren’t willing to go green at all. To Moody’s point about hybrids, McParland said he’s seen a huge spike in buyer interest in those cars this year.
“If somebody comes to me looking for a Honda, they don't care about a gas Honda,” he said. “They want an Accord Hybrid, or they want a CR-V hybrid. Because the price delta between the gas and the hybrid version is not much.”
That’s a net positive for the planet. Hybrid cars are still a remarkable tool for reducing emissions right now in ways that may be easier to live with until a more robust EV charging network gets built out. Having said that, McParland told me to forget about deals on hybrid cars. “There’s no deals there because the demand is so high,” he said.
So where can you get deals on a green car right now, especially one that doesn’t use gasoline at all?
Some cursory hunting revealed a number of 2022 model-year EVs that are still “new” cars — maybe they’ve been at the dealership that long and just have a few hundred or thousand miles on them — and are going for almost fire-sale prices. Take this 2022 Hyundai Ioniq 5 with just 2,562 miles for a very tempting $40,000 even (about $6,000 to $10,000 off the average price.) Or this Kia EV6 with 7,353 miles and a $37,991 price tag. I’d seen a few examples recently of the Mustang Mach-E that also fit that bill.
There’s also still the Chevrolet Bolt, which is soon to be discontinued and has some outdated charging tech but is going out with a mid-$20,000 fire-sale bang. Not only are they eligible for the full $7,500 tax credit, but some states are giving extra incentives. In Colorado, for instance, you might be able to pick up one of the last new Bolts for around $15,000 after all the tax credits kick in.
On the manufacturer's side, Ford slashed the prices of the F-150 Lightning pickup (after raising them this year amid supply chain issues) by up to $10,000 this week, leaving the base Lightning Pro at $51,990. Now, that’s still more expensive than it was a year ago, but hey, a deal’s a deal. (It’s also eligible for the full $7,500 tax credit.)
McParland added that he’s seen some more aggressive deals on BMW and Mercedes-Benz’s electric models as part of their summer sales events as well. One reason might be that neither automaker has any fully electric car that qualifies for a U.S. tax credit at the moment. (For the record, I’m a fan of BMW’s i4 electric sport sedan, and other people seem to be too; BMW’s actually doing very well on the EV sales front this year.)
“We're seeing some manufacturer incentives… more so on the higher end of the market,” McParland said. So maybe not great news if you want a commuter on a budget, but not bad if you can stand to treat yourself a bit.
And there’s always Tesla. While McParland said some of his customers have been turned off by the CEO’s recent antics or just want some variety — “People have come to me, and this is the exact conversation. I want EV but I don't want to buy a Tesla, that sort of thing,” he said — the fact is that the cars’ specs are still among the best out there. So are the deals. Between Tesla’s own price cuts and the EV tax incentives, these are hot sellers for good reason right now. “And you’ve got people looking into used ones now that there are so many out there,” McParland said.
Moody added that there are other ways to save on EV ownership besides just the car, too. Many manufacturers offer deals on home chargers or are throwing them in for free. There are also state and federal tax incentives to help cover the cost of charging. “I would not just call a place someplace up and buy [a charger,]” he said. “I would do a lot of research and see if I could get one for free or at a discounted rate.”
Finally, McParland said patience may be a virtue as the year goes on and new model-year cars hit dealerships. That’s when they get more aggressive at moving the older stuff.
“My prediction is that as we start to get closer to the fall, the deals might even get better than they are now,” he said. “I think we're still in the early stages of this ‘too much inventory’ situation.”
America is past the “early adopter” stage of EVs, when people were evangelizing gas-free cars but had few choices and terrible options for living with them. But we’re not in the critical mass stage, either. Getting to that point could take a number of years; transitioning to zero-emission transportation was never going to happen overnight, even if we need it to.
In the meantime, if you see EV ownership in your future, be on the lookout for great deals as much as you are for public chargers near your place.
Read more about EVs:
Tesla Is Still Winning the EV Race
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Current conditions: States left flooded from recent severe storms are now facing freezing temperatures • Firefighters are battling blazes in Scotland due to unusually warm and dry weather • Hospitals in India are reporting a 25% rise in heat-related illnesses compared to last year. Yesterday the country’s northern state of Rajasthan reached 115 degrees Fahrenheit, about 13 degrees higher than seasonal norms.
President Trump’s sweeping new tariffs came into effect at 12:01 a.m. on Wednesday, rattling the world’s markets and raising the risk of a global trade war. The levies, which include a 104% tariff on Chinese imports, triggered a mass sell-off in U.S. Treasury bonds, hiking yields as investors worry about a potential recession and flock to alternative safe-haven investments. The price of oil fell for the fifth day in a row to its lowest since 2021, with Brent futures at about $61 per barrel, well below the $65 level that oil producers need in order to turn a profit drilling new wells nationwide. As Heatmap’s Robinson Meyer explained recently, the tariffs are an outright catastrophe for the oil industry because they threaten a global downturn that would hurt oil demand at a time when oil cartel OPEC+ is increasing its output. Trump’s slate of tariffs will impact the cost of just about everything, from gasoline to e-bikes to LNG to cars. China imposed retaliatory tariffs, increasing them from 34% to 84% in response to the U.S. escalation. Meanwhile, the European Union will vote today on whether to impose its own retaliatory fees. European shares plummeted, as did Asian and Australian stocks.
As Heatmap’s Emily Pontecorvo reported today, a new study published in the journal Nature Climate Change finds that the transition to clean energy could create a world that is less exposed to energy price shocks and other energy-related trade risks than the world we have today. “We have such a concentration of fossil resources in a few countries,” Steven Davis, a professor of Earth system science at Stanford and the lead author of the study, told Pontecorvo. Transition minerals, by contrast, are less geographically concentrated, so “you have this ability to hedge a little bit across the system.”
The White House issued several executive orders on Tuesday aimed at boosting U.S. coal production and use, pointing to rising electricity demand from artificial intelligence. The series of orders direct federal agencies to:
Trump also said he plans to invoke the Defense Production Act to spur mining operations, “a move that could put the federal purse behind reviving the fading industry,” Reutersreported. Coal is the dirtiest fossil fuel, and its use has been in decline since 2007. As of last year, wind and solar combined surpassed coal for U.S. electricity generation.
President Trump signed a separate executive order on Tuesday that targets climate laws at the state level and seeks to remove threats to U.S. “energy dominance,” including “illegitimate impediments to the identification, development, siting, production, investment in, or use of domestic energy resources — particularly oil, natural gas, coal, hydropower, geothermal, biofuel, critical mineral, and nuclear energy resources.” The order references “state overreach” and suggests that some state and local governments are overstepping their constitutional authority in regulating energy through interstate trade barriers or fines on energy producers. It calls out New York and Vermont for their climate change superfund laws that require fossil fuel companies to pay for their planet-warming greenhouse gas emissions. And it mentions California’s carbon cap-and-trade system.
The executive order directs the U.S. attorney general to compile a list of all state and local laws “purporting to address ‘climate change,’” along with ESG, environmental justice, carbon taxes, and anything involving “carbon or ‘greenhouse gas’ emissions,” and put a stop to their enforcement. “The federal government cannot unilaterally strip states’ independent constitutional authority,” New York Governor Kathy Hochul and New Mexico Governor Michelle Lujan Grisham said in a statement. “We are a nation of states — and laws — and we will not be deterred. We will keep advancing solutions to the climate crisis that safeguard Americans’ fundamental right to clean air and water, create good-paying jobs, grow the clean energy economy, and make our future healthier and safer.”
Wood Mackenzie issued its annual U.S. wind energy report this week. It finds that 2024 marked the worst year for new onshore wind capacity in the past decade, with just 3.9 gigawatts installed. Through 2029, the firm expects developers to install another 33 gigawatts of onshore capacity, 6.6 gigawatts of offshore capacity, and carry out 5.5 gigawatts of upgrades and refurbishings. The five-year outlook marks “a 40% decrease quarter-on-quarter from a previous total of 75.8 gigawatts.” The report warns of enduring “uncertainty” thanks to the Trump administration’s attacks on the wind industry. “Growth will happen, but it’s going to be slower,” wrote Michelle Lewis at Electrek. “[Trump] has managed to get some projects canceled, and he’ll make things more of a slog over the next few years.”
President Trump has pulled the U.S. out of international talks to decarbonize the shipping industry and vowed to reciprocate against any fees on U.S. ships, Politicoreported. The International Maritime Organization's Maritime Environmental Protection Conference is unfolding this week in London, where negotiators are trying to agree on a policy to curb shipping pollution through carbon taxation. Shipping accounts for about 3% of global greenhouse gas emissions. Trump reportedly sent a letter to the conference saying “the U.S. rejects any and all efforts to impose economic measures against its ships based on GHG emissions or fuel choice. Should such a blatantly unfair measure go forward, our government will consider reciprocal measures so as to offset any fees charged to U.S. ships and compensate the American people for any other economic harm from any adopted GHG emissions measures.”
“What’s next, a mandate that Americans must commute by horse and buggy?”
–Kit Kennedy, a managing director at the Natural Resources Defense Council, in response to Trump’s executive orders aimed at revitalizing the U.S. coal industry.
Rob and Jesse get into the nitty gritty on China’s energy policy with Joanna Lewis and John Paul Helveston.
China’s industrial policy for clean energy has turned the country into a powerhouse of solar, wind, battery, and electric vehicle manufacturing.
But long before the country’s factories moved global markets — and invited Trump’s self-destructive tariffs — the country implemented energy and technology policy to level up its domestic industry. How did those policies work? Which tools worked best? And if the United States needs to rebuild in the wake of Trump’s tariffs, what should this country learn?
On this week’s episode of Shift Key, Rob and Jesse talk with two scholars who have been studying Chinese industrial policy since the Great Recession. Joanna Lewis is the Provost’s Distinguished Associate Professor of Energy and Environment and Director of the Science, Technology and International Affairs Program at Georgetown University's School of Foreign Service. She’s also the author of Green Innovation in China. John Paul Helveston is an assistant professor in engineering management and systems engineering at George Washington University. He studies consumer preferences and market demand for new technologies, as well as China’s longstanding gasoline car and EV industrial policy. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: One kind of classical hard problem about industrial policy is selecting the technology that is going to eventually be a winner. And there’s a few ways to get around this problem. One is to just make lots of bets.
One thing that’s been a little unclear to me about the set of technology bets that China has made is that it has seemed to pick a set of technologies that are now extremely competitive globally, and it did seem to pick up on those technologies before Western governments or firms really got to them. Is that entirely because China just made a bunch of technology bets and it happened that these are the ones that worked out? Is it because China could look ahead to the environmental needs of the world and the clean development needs of the world and say, well, there’s probably going to be a need for solar? There’s probably going to be a need for wind? There’s probably going to be a need for EVs? Or is it a third thing, which is that China’s domestic needs, its domestic energy security needs, just happen to align really well with the direction of development that the world is kind of interested in moving in anyway.
John Paul Helveston: All of the above. I don’t know — like, that’s the answer here. I’ll add one thing that’s a little bit nuanced: There’s been tremendous waste. I’ll just put that out there. There’s been all kinds of investments that did not pan out at all, like semiconductors for a long, long time. Just things that didn’t work.
I think where China has had a lot of success is in areas where … It’s like the inverse of what the United States innovation ecosystem does well. China’s ecosystem is really driven around production, and a lot of that is part of the way the government’s set up, that local provinces have a ton of power over how money gets spent, and often repurpose funds for export-oriented production. So that’s been a piece of the engine of China’s economic miracle, is mass producing everything.
But there’s a lot of knowledge that goes along with that. When you look at things like solar, that technology goes back many, many decades for, you know, satellites. But making it a mass produced product for energy applications requires production innovations. You need to get costs down. You need to figure out how to make the machine that makes the machine. And that is something that the Chinese ecosystem does very well.
So that’s one throughline across all of these things, is that the technology got to a certain level of maturity where production improvements and cost decreases were the bigger things that made them globally competitive. I don’t think anyone would be considering an EV if we were still looking at $1,000 a kilowatt hour — and we were there just 15 years ago. And so that’s the big thing. It’s just production. I don’t know if they’ve been exceptionally good at just picking winners, but they’re good at picking things that can be mass produced.
Music for Shift Key is by Adam Kromelow.
That’s according to new research published today analyzing flows of minerals and metals vs. fossil fuels.
Among fossil fuel companies and clean energy developers, almost no one has been spared from the effects of Trump’s sweeping tariffs. But the good news is that in general, the transition to clean energy could create a world that is less exposed to energy price shocks and other energy-related trade risks than the world we have today.
That’s according to a timely study published in Nature Climate Change on Wednesday. The authors compared countries’ trade risks under a fossil fuel-based energy economy to a net-zero emissions economy, focusing on the electricity and transportation sectors. The question was whether relying on oil, gas, and coal for energy left countries more or less exposed than relying on the minerals and metals that go into clean energy technologies, including lithium, cobalt, nickel, and uranium.
First the researchers identified which countries have known reserves of which resources as well as those countries’ established trading partners. Then they evaluated more than a thousand pathways for how the world could achieve net-zero emissions, each with different amounts or configurations of wind, solar, batteries, nuclear, and electric vehicles, and measured how exposed to trade risks each country would be under each scenario.
Ultimately, they found that most countries’ overall trade risks decreased under net-zero emissions scenarios relative to today. “We have such a concentration of fossil resources in a few countries,” Steven Davis, a professor of Earth system science at Stanford and the lead author of the study, told me. Transition minerals, by contrast, are less geographically concentrated, so “you have this ability to hedge a little bit across the system.”
The authors’ metric for trade risk is a combination of how dependent a given country is on imports and how many trading partners it has for a given resource, i.e. how diverse its sourcing is. “If you have a large domestic supply of a resource, or you have a large trade network, and you can get that resource from lots of different trading partners, you're in a relatively better spot,” Davis said.
Of course, this is a weird time to conclude that clean energy is better equipped to withstand trade shocks. As my colleagues at Heatmap have reported, Trump’s tariffs are hurting the economics of batteries, renewables, and minerals production, whether domestic or not. The paper considers risks from “random and isolated trade shocks,” Davis told me, like losing access to Bolivian lithium due to military conflict or a natural disaster. Trump’s tariffs, by contrast, are impacting everything, everywhere, all at once.
Davis embarked on the study almost two years ago after working as a lead author of the mitigation section of the Fifth National Climate Assessment, a report delivered to Congress every four years. A lot of the chapter focused on the economics of switching to solar and wind and trying to electrify as many end uses of energy as possible, but it also touched on considerations such as environmental justice, water, land, and trade. “There's this concern of having access to some of these more exotic materials, and whether that could be a vulnerability,” he told me. “So we said, okay, but we also know we're going to be trading a lot less fossil fuels, and that is probably going to be a huge benefit. So let's try to figure out what the net effect is.”
The study found that some more affluent countries, including the United States, could see their energy security decline in net-zero scenarios unless their trade networks expand. The U.S. owns 23% of the fossil reserves used for electricity generation, but only 4% of the critical materials needed for solar panels and wind turbines.
One conclusion for Davis was that the U.S. should be much more strategic about its trade partnerships with countries in South America and Sub-Saharan Africa. Companies are already starting to invest in developing mineral resources in those regions, but policymakers should make a concerted effort to develop those trade relationships, as well. The study also discusses how governments can reduce trade risks by investing in recycling infrastructure and in research to reduce the material intensity of clean energy technologies.
Davis also acknowledged that focusing on the raw materials alone oversimplifies the security question. It also matters where the minerals are processed, and today, a lot of that processing happens in China, even for minerals that don’t originate there. That means it will also be important to build up processing capacity elsewhere.
One caveat to the paper is that comparing the trade risks of fossil fuels and clean energy is sort of apples and oranges. A fossil fuel-based energy system requires the raw resource — fuel — to operate. But a clean energy system mostly requires the raw materials in the manufacturing and construction phase. Once you have solar panels and wind turbines, you don’t need continuous commodity inputs to get energy out of them. Ultimately, Davis said, the study’s conclusions about the comparative trade risks are probably conservative.
“Interrupting the flow of some of these transition materials could slow our progress in getting to the net zero future, but it would have much less of an impact on the actual cost of energy to Americans,” he said. “If we can successfully get a lot of these things built, then I think that's going to be a very secure situation.”