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America’s flagship automaker has all but given up on making consumer electric vehicles — for now, at least.
Well, that’s not good.
Ford Motor Company is canceling one of its most anticipated electric vehicles and delaying another EV project. The changes will cost at least $400 million — and as much as $1.9 billion — the company said Wednesday, and they signal that one of the biggest players in the American car industry still hasn’t yet found a workable EV strategy. With these new delays, the North American car market may not see the explosive growth of EV options — the kind of efflorescence already happening in Europe and China — until the end of this decade.
The primary car in question is Ford’s planned three-row EV crossover, possibly its most anticipated EV model. The new car, which was originally slated for release in 2023 before being bumped to 2025, will now be produced only as a hybrid. That fits in with Ford’s recent embrace of hybrids — by 2030, the company now says, it will offer a hybrid version of each vehicle in its line-up — but it deals a substantial blow to the company’s future EV offerings. Ford also announced that it will delay the release of a new medium-sized electric pickup truck to 2027. That truck, so far known only as “T3,” is meant to be the first product of the company’s California-based skunkworks staffed by Tesla alumni. That team is meant to help Ford develop a low-cost, globally competitive electric vehicle platform that could eventually undergird crossovers, trucks, and commercial vehicles.
Taken together, these changes mean that the company will offer no new electric vehicles in the consumer market for the next two years. Yes, the company’s outlook for EVs in the commercial market is a little brighter — Ford will begin selling an all-electric commercial van in 2026. But to entice the average buyer it will have to rely entirely on existing models — the Mustang Mach E and F-150 Lightning — to generate EV sales. The company will also cut back a quarter of its planned EV spending. It’s not an overstatement to say that Ford seems to be giving up on the consumer side of the EV transition until the back half of the decade.
“Ford has some improvements coming in 2026, but they’re basically throwing their hands up on the market,” Corey Cantor, an EV analyst at the market research firm BloombergNEF, told me. “They’re essentially ceding ground to other automakers in the U.S. market, and there’s a clear lack of plan for how they plan to stay competitive.
“There’s no way you can say it’s a good thing for the U.S. EV market,” he added.
Executives blamed the shifts on persistent challenges turning a profit in its EV unit, which has hemorrhaged money as it has spun up production, ultimately losing $130,000 on every EV that it sold during the first quarter of 2024.
“These vehicles need to be profitable, and if they’re not profitable based on where the customer is and the market is, we will ... make those tough decisions,” John Lawler, Ford’s chief financial officer, told the Financial Times. The company could not figure out how to reconcile the cost of the large battery needed for the three-row SUV with the vehicle’s size and price in a way that could turn a profit within 12 months, he added.
Ford’s approach may reflect a canny understanding of consumer demand in the American market. Although EVs are far better for the climate than gasoline-burning vehicles, hybrids pollute somewhat less than conventional gas guzzlers. Over the past few years, as new EV models have trickled into the market, hybrid sales have boomed, and that is, all things considered, a good thing: Replacing America’s fleet of gasoline-burning SUVs and crossovers with a hybrid fleet will still work to reduce emissions, although it will not allow for the extremely rapid emissions reductions that could keep the 1.5 degree Celsius warming goal in sight.
More pertinently, perhaps, the shift also creates a strategic opening in the American EV market. Tesla has long dominated U.S. market share, and in the past few years, Ford has settled into a comfortable No. 2 position. But Tesla has struggled with its own dearth of new models: Except for the luxury Cybertruck, the automaker has no new cars or trucks in its pipeline. And now that Ford appears to be taking a step back, the combined effect could create an opening for other automakers — namely Hyundai, Kia, or the startup Rivian — to step into the breach in 2025 and 2026. If Ford’s timeline holds, for instance, then Rivian will begin selling its widely awaited $45,000 R2 crossover in 2026, a year before Ford can offer anything new.
The shift also vindicates decision making at Ford’s cross-town competitor, General Motors. While Ford sought to take an early lead by manufacturing a few buzzy standalone EV models (like the Mach E), GM has focused on developing a robust EV platform, the Ultium. Although its initial Ultium-based releases had big deficiencies, its latest cars look better, and the platform should allow it to begin manufacturing a diverse lineup of cars and trucks in a relatively brief period of time. “For all the knocking we did of GM, their thinking makes sense: First you spin battery manufacturing up, then you put it in a lot of models, then you find out which models work” in the broader market, Cantor told me.
But perhaps the change in plans is most ominous for Ford’s cost model: If it can’t get a three-row crossover to pencil out, how can it get any kind of non-F-150 to work financially? Despite Ford’s struggles to make its three-row SUV concept work, other companies have already brought their own three-row electric vehicles to market. At the high end, Rivian’s R1T has three rows, starts at $69,000, and is the company’s best-selling vehicle. But Kia’s three-row EV9 starts at about $55,000 before subsidies, and Hyundai is due to start selling its own three-row SUV, the Ioniq 9, later this year. Other companies have found a way to make EVs without breaking the bank. Why hasn’t Ford?
But if Ford and GM’s behavior makes more sense for the wealthier and more cautious American consumer — in a country where public fast charger installation is still lagging — then it indicates, too, just how much America has fallen behind other global auto markets. On the same day that Ford backed off its multi-year EV goals, the Chinese tech giant Xiaomi announced that it had already beaten its annual target for EV sales and turned a profit while doing it. Xiaomi, BYD, and other Chinese automakers are rushing into the EV market, seemingly capable of producing more EVs, more cheaply and profitably, than their American competitors. Ford’s retrenchment into gas cars means that it has now fallen even further behind the global standard.
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Current conditions: Los Angeles is bracing for a massive rain storm that could trigger landslides in areas recently charred by severe wildfires • About 90% of districts in India have received little or no rainfall since the start of the year • Schools are closed in Kansas City, Missouri, where up to 6 inches of snow is expected today.
California’s state-backed insurance plan of last resort is short on funds to pay out claims from the Los Angeles wildfires. As a result, California Insurance Commissioner Ricardo Lara is asking private insurers that operate in the state to give the program, known as the FAIR Plan, $1 billion. The FAIR Plan is for people who can’t get private insurance coverage because their properties are considered high risk. As weather disasters get worse and private insurers pull back from the state, more people are relying on the FAIR Plan, and its policy load has doubled since 2020 to more than 452,000. The plan has received some 4,700 claims related to last month’s devastating fires, and paid out more than $914 million. But that’s not enough. The program expects a loss of $4 billion from the fires. This is the first time in 30 years that the program has needed to ask for more money. The fee will be divided between the private companies according to market share, and they’ll have 30 days to pay. Up to half of the cost can be passed on to their own policyholders. Even so, there are concerns that this will push private insurers to leave California to avoid further losses, exacerbating the state’s insurance crisis. State Farm, the state’s largest insurer, recently asked regulators to approve a 22% rate increase.
The U.S. added nearly 50% more clean energy capacity last year than in 2023, according to a new report from energy data company Cleanview. Most of the 48.2 gigawatts of new capacity came in the form of batteries and solar, with solar additions rising by 65%, mostly in southern states like Texas and Florida. As for battery storage, four states (California, Texas, Arizona, and Nevada) accounted for 70% of new capacity. Meanwhile, wind power missed out on growth, with capacity additions dropping by nearly a quarter year-over-year. The report says solar growth will likely slow down in 2025, battery storage could grow by nearly 70%, and wind capacity could grow by 80% if all planned projects manage to reach completion. One interesting tidbit is that Indiana is emerging as a solar hot spot. It ranks third on the list of states with the most solar additions planned for 2025, below Texas and California, but above Arizona. Of course, a lot will depend on the Trump administration.
Cleanview
Global air traffic rose by 10% to an all-time high last year, according to recent data from the International Air Transport Association. This means more aviation pollution. Air travel already accounts for 2.5% of global energy-related carbon dioxide emissions, and has contributed an estimated 4% to global warming. As Ben Elgin at Bloombergnoted, the rise in air travel comes as airlines fail to adopt “sustainable” aviation fuel at meaningful levels, with SAF accounting for a paltry 0.3% of commercial jet fuel production in 2024. “SAF volumes are increasing, but disappointingly slowly,” the IATA said in December. “Governments are sending mixed signals to oil companies which continue to receive subsidies for their exploration and production of fossil oil and gas.” Airlines are relying on SAF to curb their emissions, with many pledging to consume 10% SAF by 2030. But “even if airlines can somehow replace 10% of their fuel with lower-emitting alternatives by the end of the decade, those climate benefits would be wiped out by the industry’s expected growth,” wrote Elgin. Yesterday the Trump administration approved a $782 million loan for a plant in Montana to turn waste fats into biofuel. The loan was originally finalized under the Biden administration.
The CEO of Ford Motor yesterday warned that the company could be forced to lay off workers if President Trump raises tariffs on Mexico and Canada, and guts Biden-era legislation that supported electric vehicle production. “A 25% tariff across the Mexico and Canadian border will blow a hole in the U.S. industry that we have never seen,” Jim Farley said at a conference. He added that ending loans and subsidies for EV manufacturing projects would also put many Ford jobs at risk. The New York Times noted that his comments “offered a rare example of a corporate executive calling into question Mr. Trump’s policies or statements.”
Sales of electric vehicles were up 18% in January compared to the same time in 2024, but growth is slowing, according to research firm Rho Motion. Last month, 1.3 million EVs were sold worldwide. That’s down 35% from December’s numbers, and marks the third month in a row of slowing growth. China’s sales were down last month because of the Chinese New Year. Meanwhile, sales were up in Europe as new emissions standards came into effect. And in the U.S. and Canada, sales rose 22%. Rho Motion expects more than 20 million EVs will be sold this year.
$160 million – The amount raised in a Series B funding round by Chestnut Carbon. The startup focuses on planting trees and vegetation, and improving forest management practices to better remove carbon from the atmosphere. Chestnut will use this latest funding to build out afforestation projects — that is, planting trees in areas where, at least in modern times, forests have not existed.
Chestnut Carbon announces a major new funding round on the heels of its deal with Microsoft.
The embattled nature-based carbon removal market got a significant show of support today as Chestnut Carbon announced a whopping $160 million Series B funding round, led by the Canada Pension Plan Investment Board. The startup focuses on planting trees and vegetation as well as on improving forest management practices to better remove carbon from the atmosphere.
This announcement comes on the heels of the company’s recent deal with Microsoft to remove over 7 million tons of carbon dioxide from the atmosphere over a 25-year period. That involves planting about 35 million native trees over about 60,000 acres. It’s Microsoft’s largest carbon removal contract in the U.S., and one of the largest domestic carbon removal projects period — including those that rely on engineered solutions such as direct air capture.
Chestnut aims to fill a void in the forest carbon removal space by employing a rigorous measurement, reporting, and verification framework that it claims leaves little room for accounting errors and greenwashing, offering a solution that, hopefully, the market can finally trust. So far it seems, investors are buying it.
Chestnut will use this latest funding to build out afforestation projects — that is, planting trees in areas where, at least in modern times, forests have not existed. “We’re buying this farmland — this is marginal pasture land — and we are turning that back into a native forest,” Chestnut’s chief financial officer, Greg Adams, told me. The company buys land that is ill-suited for farming due to factors such as acidic, alkaline, or nutrient-poor soil or a climate that’s hostile to food crops but works for certain tree species.
The startup began planting native tree species in Arkansas and Alabama in 2022, and has since expanded into Mississippi, Louisiana, Texas, and Oklahoma. There are a number of benefits to planting in the Southeast, Adams told me. For one, the region’s climate allows trees to grow particularly fast, leading to more immediate carbon benefits. Also, the area isn’t very wildfire-prone, but is extremely biodiverse — so if one species of tree falls victim to disease or blight, much of the forest is likely to remain unscathed. “We look to build a forest that, if you had a time machine and you went back 100 years, would look very similar to what was there 100 years ago,” Adams told me.
While planting trees isn’t particularly expensive, land acquisition is, and that’s what the majority of Chestnut’s Series B funding will go towards. Adams told me that owning the land also helps to “reinforce the permanent nature” of Chestnut’s carbon removals, since the company has 100% control over land management decisions.
Forest-based carbon offsets are famously prone to fraud and other accounting improprieties. A 2023 investigation showed that many rainforest carbon credits approved by Verra, a leading credit certifier, for instance, were essentially bogus.
Chestnut is well aware that past scandals have eroded trust in nature-based removal efforts and aims to counteract the industry’s dubious reputation. While Verra does certify Chestnut Carbon’s “improved forest management” credits, another entity called Gold Standard certifies the company’s afforestation credits.
In addition to aligning with Gold Standard’s methodology, Adams told me the team uses a number of tools to verify the amount of carbon that its trees remove, including one that the company invented itself, which has plotted every parcel of land in the lower 48 states. This tool uses public and private data to inform Chestnut whether a plot of land is suitable for afforestation. Then, given a hypothetical mix of trees and their space relative to each other, an algorithm determines how much CO2 they would capture and sequester over a 50-year period. After the digital work is done, foresters visit the proposed site and develop a more nuanced analysis that takes into account factors such as expected yield over a given period of time and various mortality risks.
“We sell carbon credits, but we ultimately sell reputational risk insurance, because these are voluntary,” Adams told me, saying he recognizes the fragile nature of the market at this stage. “I want to make sure that what we do is seen differently, in a positive way, and ultimately it’s not going to blow back in our customers’ faces.”
Net zero was never going to be easy, but between AI and Trump, it just got a whole lot harder.
Of all of the executives who have cozied up to President Donald Trump over the past two months, Mark Zuckerberg has appeared perhaps the most eager.
In the weeks before Trump took power, the Meta CEO scrambled to ditch his company’s fact-checking program, rolled back hate speech protections, and took an ax to Meta’s diversity, equity, and inclusion programs (reportedly with the blessing of Trump’s current deputy chief of staff and homeland security advisor Stephen Miller). The billionaire founder has named Joel Kaplan, a former energy executive and a prominent Republican, to the role of vice president of global public policy and, on the night of Trump’s inauguration, Zuckerberg — who President Trump once said could spend “life in prison” — wrote on Instagram that he was “optimistic and celebrating.”
Zuckerberg has since tried to assure Meta’s left-leaning employees that the company is holding true to its values, but in an all-hands meeting in January, he stated plainly, “We now have an opportunity to have a productive partnership with the United States government, and we’re going to take that.”
The question now is just where Meta’s climate goals will fit in this partnership.
Since taking office, President Trump has used executive orders to pause tens of billions of dollars in environmental and energy spending and stop all new wind energy permits from going forward. He has withdrawn from the Paris Agreement and declared a “national energy emergency” designed to speed up approvals for energy projects — that is, with the exception of renewable energy projects.
The courts will ultimately decide the fate of these orders. But as Zuckerberg strains to stay in the new president’s good graces, the White House’s fossil fuel boosterism could complicate Meta’s climate commitments. That’s particularly true given that those commitments were already on shaky ground in the midst of the energy-sucking boom in artificial intelligence.
While Zuckerberg has never made climate action his primary cause, in a speech to Harvard graduates in 2017, he did call on the class to join in “stopping climate change before we destroy the planet.” And Meta has worked hard to do its part. Since 2020, the company has achieved net zero emissions throughout its operations, thanks to a combination of renewable energy credits, carbon removal investments, and the direct use of solar and wind energy to reduce its emissions. By 2023, it had the largest renewable energy portfolio of any corporate buyer in the country, and just last year, it struck what it said was a “first-of-its-kind” partnership to power its data centers with geothermal energy.
But beyond accounting for its operational emissions, the company has also committed to achieving net zero emissions throughout its value chain, from the copper wires spiraling through these gargantuan data centers to the construction materials used to build them.
That’s a far more challenging goal, particularly when every AI company is trying to build out their computing capacity as quickly as possible, said one former Meta employee familiar with the company’s climate and energy strategy. (The employee asked to remain anonymous to discuss private matters.) “The fear in the back of people’s minds is someone is going to say: These are voluntary commitments, and we’re just not going to do it anymore,” the former employee said, noting the “herd mentality” of Big Tech. “If one domino falls, do others?”
A Meta spokesperson declined to comment on how the company’s climate goals may be impacted by the changing political landscape and didn’t respond to a request for comment about whether this week’s layoffs have impacted sustainability work. But in its most recent sustainability report, Meta acknowledged that meeting its net zero goals by 2030 “will be significantly harder” in the age of AI. “The challenge of reaching our sustainability goals given the increased demand for energy and resources driven by AI is not unique to Meta,” wrote Rachel Peterson, Meta’s vice president of infrastructure for data centers. Indeed, Google and Microsoft have both said they’re falling short of their climate targets, and in 2023 alone, Meta’s own data center energy use spiked 34%. Peterson wrote that this demand “will require major shifts in how companies like ours operate.”
Some of those shifts are already underway. Shortly after the election, Meta issued a request for proposals for nuclear developers with the goal of adding up to 4 gigawatts of new nuclear generation capacity — enough to power a small city — by the 2030s.
Though the company has plenty of apolitical reasons to pursue nuclear power and plenty of company among tech giants investing in the space, it doesn’t hurt that nuclear power is also more politically palatable at this moment. Just last week, Energy Secretary Chris Wright, a former fossil fuel executive, promised to “unleash commercial nuclear power,” even as he skewered the pursuit of a net-zero future. Wright’s secretarial order made not a single mention of solar and wind power, which make up the bulk of Meta’s renewable energy mix.
Meta’s push into nuclear by no means indicates it’s giving up on wind and solar. A Meta spokesperson pointed me to a new agreement Meta struck last week to purchase 115 megawatts of power from an Oklahoma wind farm. (Google reportedly struck its own wind deal earlier this month in Virginia.) But it does mean Meta is diversifying its energy mix to keep up with AI demand at a time when the federal government is least likely to get in its way.
“There’s been no repudiation of the climate goals,” Benjamin C. Lee, a computer scientist at the University of Pennsylvania who was previously a visiting scientist at Meta AI working on data center energy usage, told me. “It’s just that there simply isn’t enough wind and solar, and if you’re looking to build another 100 megawatt data center, you have to get the energy.” (Lee is now a visiting scientist at Google.)
“Energy of any kind trumps no energy,” he added.
That includes energy from natural gas. A few weeks after the election, Meta said it would build its largest data center yet — a 4 million square foot behemoth — in Richland Parish, Louisiana, which will be powered by three new natural gas plants. Meta’s announcement made no mention of the site’s power demands, but instead emphasized how the company planned to offset its impact by investing in community action grants, water stewardship, and adding enough new clean and renewable energy projects to the grid to cover 100% of the data center’s electricity needs.
But Zuckerberg left all of that out of his post about the project on Threads in January. Instead, just days after President Trump announced a new $500 billion AI data center partnership between Oracle, OpenAI, and Softbank, Zuckerberg boasted that “Meta is building a 2GW+ datacenter that is so large it would cover a significant part of Manhattan.”
The pandering post signaled a pivot — not necessarily in Meta’s actual plans for the data center, but in its climate-friendly messaging about it. In Zuckerberg’s telling, the data center’s sheer size, not its attempts at sustainability, were the selling point.
Still, despite these rhetorical moves, three people I spoke with who have previously worked at Meta on energy and sustainability issues are doubtful that the company’s substantial investments in renewable energy — particularly solar energy — are going away. That’s largely because solar is still often cheaper than other forms of energy. Even if the political case is diminished, they said, the business case is still there.
But investing in renewables alone won’t get Meta to its ultimate goal. Achieving net zero emissions throughout the value chain requires relying on materials that often do carry a cost premium. And it requires doing that at a time when AI companies are racing to one-up each other by building bigger data centers faster than ever before.
It’s those commitments that appear far more vulnerable, particularly when the White House is offering every excuse for corporate America to give them up. “Net zero was always going to fall by the wayside, but that was because of AI,” said Lee. “The question is whether the gap between what we had hoped to achieve and where we are becomes larger.”