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BYD is coming for their marketshare.

On the surface, it should be a triumphant moment for the Big Three, the triumvirate of traditional American automakers made up of Ford, General Motors, and Stellantis.
They survived the pandemic and inflationary surge of the early 2020s, and they settled their labor issues with the United Auto Workers. They even had a pretty good 2023, financially. Even as interest rates reached multi-decade highs, which should normally discourage big-ticket car and truck purchases, Ford and General Motors booked $4 billion and $12 billion in profit, respectively — slightly below 2022’s levels but more than might have been reasonably expected. Stellantis, which owns the Jeep and Dodge brands, posted a record profit.
Consumers and businesses are still buying millions of full-size pickups, SUVs, and vans each year. If interest rates start to fall this summer, and the economy holds out, then 2024 could be even bigger. Yet the companies are clearly increasingly worried. And they have good reason to be. They are entering a critical period: a time when they must make the EV transition, or die trying.
For the past decade, Detroit has supported itself partly off profits earned from selling SUVs, crossovers, and pickup trucks to North Americans. It essentially delegated the market for small cars and trucks to foreign automakers operating in the United States, like Toyota and Honda. You haven’t even been able to buy a Ford-badged sedan or hatchback in the United States since the pandemic, as the automaker has winnowed its car offerings here down to the Mustang.
That model worked in the post-Great Recession period when gasoline was generally cheap and the global auto market was stable and growing. But now those profits are coming under threat. The primary driver of that threat is the rise of Chinese automakers, who are chomping away at the Big Three’s shrinking market share in China and around the world.
In the coming weeks, more and more attention will be paid to this important shift. The Biden administration is reportedly so alarmed at the ability of Chinese-made cars to enter American markets that it is considering hiking tariffs on EVs and other clean-energy products further.
Here are three important aspects of this story to understand:
Each of the Big Three finds itself in a slightly different position in the EV transition than it expected to be — and while none of them is quite as weak as it may look at first, no automaker is doing particularly well.
Ford, for instance, seems to have nailed it with the Mustang Mach E, a family-friendly crossover that has outsold any individual electric model from Kia or Hyundai. But it has struggled to convince truck buyers to try out its all-electric F-150 Lightning, and it has slowed its EV investment plans. The company lost $64,731 on each electric car it sold last year — $4.7 billion on EVs overall — meaning that its electric division only survives because of its ample profits from selling gas-burning SUVs and trucks.
General Motors sells the Chevrolet Bolt, the country’s best-selling EV that isn’t a Tesla. But it has struggled to roll out its new Ultium battery platform, which it hopes will be the basis of all its new electric cars. It recalled the Chevrolet Blazer EV after test units literally left reviewers stranded by the side of the road.
Stellantis — the trans-Atlantic fusion of the Fiat, Dodge, Jeep, and Peugeot brands — is arguably in the best shape of the three, although you could argue that it barely counts as a member of the Big Three anymore. (It is headquartered in the Netherlands.) It turned a profit on its electric cars last year, but almost all of that came from European brands that aren’t offered here. Its American business remains slower and more pickup-dependent.
Since the pandemic, China’s position in the global auto market has completely changed. Last year, the country exported more cars than it imported for the first time ever. Although most of its auto exports are gas-burning vehicles — it has filled a gap in the Russian car market left behind by western automakers’ post-Ukraine withdrawal — electric cars make up a larger and larger share of its production.
The star of China’s EV market is BYD, which passed Tesla last year as the world’s No. 1 producer of electric cars. By leveraging China’s domination of the battery industry and facility with electronics manufacturing, BYD can sell EVs for under $12,000.
While BYD hasn’t started to sell cars in the United States yet, it is getting closer to the market. On Tuesday, the head of BYD’s operations in Mexico told Nikkei that the company is exploring opening a new factory in that country.
That could get BYD’s cars into the U.S. under the umbrella of the U.S.-Mexico-Canada trade agreement. Then, even if the federal government found a way to block the domestic sale of BYD cars, the company could still cut into U.S. automakers’ market share in Mexico and potentially Canada, which are both major markets for American manufacturers.
Even without North American factories, Chinese EVs have started to dribble into the United States. Volvo’s small new electric SUV, the XC30, is manufactured in China and will debut at $34,950 this year. That’s roughly the same price GM hopes to achieve with its American-made Chevrolet Equinox EV, a similarly sized SUV, which is due to go on sale later this year.
That Volvo is able to achieve price parity with General Motors is itself a testament to the Chinese sector’s advantage, as the price factors in the U.S.’s 25% tariff on car imports from China.
What’s tricky is that while China is objectively better than the rest of the world at building electric cars, its companies are also helped by a slowdown in its domestic economy.
China is suffering a multi-year economic slowdown due to the slow deterioration of its real estate and construction sectors. The slower domestic economy means that these products are cheaper. More than 70% of China’s exports have fallen in cost over the past year, according to Nikkei Asia, a phenomenon that economists describe as “exporting deflation.” In part because President Xi Jinping has been so reluctant to adopt policies that would increase domestic consumption, the country’s most sure-fire method of generating economic growth has been to export more products abroad.
Many of those products — such as EVs, solar panels, and batteries — are essential to global decarbonization. As the historian Adam Tooze has written, clean energy is now the primary driver of economic growth in China. As Chinese companies search for foreign markets to sell their climate-friendly products, they are driving prices down for those products globally. That could potentially undercut other automakers’ ability to find a path to making profitable EVs.
This is the difficulty of thinking through this issue: The Big Three have made legitimate missteps, Chinese firms have a legitimate advantage over American and European firms, and Chinese firms can enjoy lower costs due to problems in the Chinese economy. How do you sort through those factors? Whatever path you choose, one message emerges: The Big Three can only be protected from the EV revolution for so long. One way or another — whether by the law of the land or the law of the markets — it’ll come for them.
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On global emissions, Bill Gates on Chinese nuclear, and a geothermal breakthrough
Current conditions: Hurricane Melissa made landfall over Jamaica as one of the strongest Category 5 storms on record before barreling north toward Cuba • A cold front will send temperatures plunging as far as 15 degrees below average across the mid-Atlantic and the Northeast • The Colombian Andes are bracing for flooding amid up to 8 inches of rain forecast for Wednesday.
 
The Trump administration’s all-of-government approach to thwarting construction of offshore wind turbines has included the Department of the Interior de-designating federal waters to turbine development and the Department of Transportation yanking funding, in addition to various steps taken by other agencies. Now the Department of Health and Human Services is taking its swing at the industry. On Tuesday, Bloomberg reported that Secretary of Health and Human Services Robert F. Kennedy, Jr. directed the Centers for Disease Control and Prevention to open an investigation into the potential harms offshore wind farms pose. In late summer, the agency instructed the CDC’s National Institute for Occupational Safety and Health to prepare research about wind farms’ impact on fishing businesses. The effort included Kennedy personally meeting with NIOSH director Josh Howard, in the course of which he gave Howard — a career physician and lawyer who previously oversaw federal efforts on September 11 victims’ health — specific experts to contact, according to the newswire report. The U.S. Surgeon General’s office has also been involved in the initiative.
It’s part of what Heatmap’s Jael Holzman called “Trump’s total war on wind,” an assault that started on President Donald Trump’s first day back in office. Earlier this month, oil major Shell’s top executive in the United States warned that the precedents the administration was setting risked being weaponized against fossil fuel companies once Trump exited power.
In the first real decline ever forecast by the United Nations, global emissions are now expected to fall by 10% below 1990 levels by 2035, according to a report issued Tuesday. But the world remains far off from the 60% reduction goal scientists say is necessary to keep warming below 1.5 degrees Celsius, the target leaders committed to when they signed the Paris Agreement a decade ago. “Humanity is now clearly bending the emissions curve downwards for the first time, although still not nearly fast enough,” Simon Stiell, executive secretary at the UN Framework Convention on Climate Change, told Bloomberg on Tuesday. “We have a serious need for more speed.”
The latest assessment comes as the U.S. is withdrawing from the Paris climate negotiations and other countries are paring back spending on decarbonization ahead of the UN climate talks in Belem, Brazil, next month.
On Tuesday, Bill Gates released a provocative new treatise on climate change in which he laid out what he sees as necessary ahead of November’s climate summit. Before that, on Friday afternoon, the billionaire philanthropist gathered with half a dozen journalists in a conference room in Manhattan to discuss his latest ideas over lunch. Heatmap’s Robinson Meyer, who was in attendance, has a good breakdown of some of what Gates discussed. I also attended the lunch and wanted to highlight another point Gates made: The West is losing the race for new nuclear power. When it comes to fission, China is building more reactors than anyone else, and helped perfect the Westinghouse AP1000 before its successful construction in the U.S. Gates’ own reactor developer, TerraPower, had plans to build its debut plant in China prior to the souring in relations between Washington and Beijing nearly a decade ago. When it comes to fusion, he said, there’s no topping how much funding China has directed toward the technology.
“The amount of money they’re putting into fusion is more than the rest of the world put together, times two,” Gates told us. “There is a substantial amount of Chinese capital going into that, and in fission, they built the most reactors.”
Chemical giant Honeywell has announced a new technology that converts agricultural and forestry waste into ready-to-use renewable fuels that can directly replace the carbon-intensive fuel used by large ships and airplanes. The so-called “Biocrude Upgrading” processing hardware can be provided in modular form and equipped to ships at a moment when global regulators are seeking to slash the roughly 3% of planet-heating emissions that come from cargo vessels. “The maritime industry has a real need for renewable fuels that are immediately available and cost effective,” Ken West, Honeywell’s energy and sustainability solutions president, said in a statement. The news comes nearly two weeks after Trump “torpedoed” — as Heatmap’s Katie Brigham put it — efforts at the International Maritime Organization to slash emissions from regulated ships.
The geothermal startup Eavor said Tuesday that its breakthroughs in drilling had slashed the time it takes to drill its wells underground. The Canadian company said that the results of two years of drilling at its flagship project in Geretsried, Germany, showed its efforts to dig to hotter and deeper locations are working. “Much like wind and solar have come down the cost curve, much like unconventional shale [oil and gas] have come down the cost curve, we now have a technical proof-point that we’ve done that in Europe,” Jeanine Vany, a cofounder and executive vice president of corporate affairs at Eavor, told Canary Media’s Maria Gallucci.
The breakup of the ancient supercontinent 1.5 billion years ago transformed the Earth’s surface environments and laid the groundwork for the emergence of complex life. That’s according to new research by Australian scientists at the University of Sydney and the University of Adelaide. The findings challenge what has long been called the “boring billion,” a time when biological and geological changes effectively stalled. The plate tectonics that reshaped the planet triggered conditions that supported oxygen-rich oceans and fostered the appearance of the first eukaryotes, the ancestors of all complex life. “Our work reveals that deep Earth processes, specifically the breakup of the ancient supercontinent Nuna, set off a chain of events that reduced volcanic carbon dioxide emissions and expanded the shallow marine habitats where early eukaryotes evolved,” Dietmar Müller, a University of Sydney professor and the study’s lead author, said in a press release.
Rob talks New Jersey past, present, and future with Employ America’s Skanda Amarnath.
Electricity prices are the biggest economic issue in the New Jersey governor’s race, which is perhaps next month’s most closely watched election. Mikie Sherrill, the Democratic candidate and frontrunner, has pledged to freeze power prices for state residents after getting elected. Can she do that?
On this week’s episode of Shift Key, Rob talks to Skanda Amarnath, the executive director of Employ America, a center-left think tank that aims to encourage a “full-employment, robust-growth economy.” He’s also a nearly lifelong NJ resident. They chat about how New Jersey got such expensive electricity, whether the nuclear construction boom is real, and what lessons nuclear companies should take from economic history.
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. Jesse is off this week.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, 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: Is there a nuclear bubble? … As people who are interested in long-term decarbonization, number one, this is quite reminiscent of the environment that hit clean energy companies right as Biden was taking office. And number two, is there a nuclear bubble, and what does this mean for how we should think about nuclear going forward? Because at the end of this, I think the only way that any of this helps the climate is if we build a lot more plants.
Skanda Amarnath: We are definitely in a moment when there’s a lot of froth. I don’t want to say everything — it’s always like, it’ll feel unfair and not accurate to go after every single proposition that’s in markets. Like for example, Rick Perry’s Fermi America, they did an IPO and raised a lot of capital pretty successfully. And they have a plan for how they want to build a lot of stuff out — gas, solar, batteries. They want to build four AP1000s, the large, light-water reactors that are seen as the most recent that we’ve built in the United States, and they think they could do them at the same speed that China builds those same reactors.
On the surface of it, there are parts of it that seem interesting and promising. On the other hand, there’s also parts of it that feel very much wrapped up in the speculative frenzy. It gets more exaggerated when you get to like examples like Oklo. They seem to be very politically connected, specifically to Chris Wright. That plus some very small milestone successes in the fuel supply chain are now being sort of magnified into, They’re going be very successful in building out there first of a kind technology. And even in the space of small modular reactors, what they’re offering seems at least substantially more risky than what may be — outside of the space, so even compared to GE’s proposition for a small boiling water reactor, the technology that’s involved with like Oklo is kind of out there.
And one of the things, the lessons of nuclear, if you look through the history, is the more new stuff you’re doing, the harder it is, the more likely it is that you will get heartburn in terms of cost, in terms of schedule, and you never want to do this again. And it’ll involve a lot of bankruptcy, as it did with the case of the Georgia reactors that were built in the last decade. And so this is a sign that there’s clearly a lot of hype and a lot of willingness to take risk, and it’s not really backed up by fundamentals. That can be sometimes overrated in a boom. But that is something that people will look to in a bust and say, what were we doing here? Why was the price of the stock so high?
Mentioned:
How Electricity Got So Expensive
New Jersey’s Next Governor Probably Can’t Do Much About Electricity Prices, by Matt Zeitlin for Heatmap
Previously on Shift Key: The Last Computing-Driven Electricity Demand Boom That Wasn’t
Meta lays off 600 workers
Amazon lays off 14,000 workers
This episode of Shift Key is sponsored by …
Hydrostor is building the future of energy with Advanced Compressed Air Energy Storage. Delivering clean, reliable power with 500-megawatt facilities sited on 100 acres, Hydrostor’s energy storage projects are transforming the grid and creating thousands of American jobs. Learn more at hydrostor.ca.
A warmer world is here. Now what? Listen to Shocked, from the University of Chicago’s Institute for Climate and Sustainable Growth, and hear journalist Amy Harder and economist Michael Greenstone share new ways of thinking about climate change and cutting-edge solutions. Find it here.
Music for Shift Key is by Adam Kromelow.
The storm currently battering Jamaica is the third Category 5 to form in the Atlantic Ocean this year, matching the previous record.
As Hurricane Melissa cuts its slow, deadly path across Jamaica on its way to Cuba, meteorologists have been left to marvel and puzzle over its “rapid intensification” — from around 70 miles per hour winds on Sunday to 185 on Tuesday, from tropical storm to Category 5 hurricane in just a few days, from Category 2 occurring in less than 24 hours.
The storm is “one of the most powerful hurricane landfalls on record in the Atlantic basin,” the National Weather Service said Tuesday afternoon. Though the NWS expected “continued weakening” as the storm crossed Jamaica, “Melissa is expected to reach southeastern Cuba as an extremely dangerous major hurricane, and it will still be a strong hurricane when it moves across the southeastern Bahamas.”
So how did the storm get so strong, so fast? One reason may be the exceptionally warm Caribbean and Atlantic.
“The part of the Atlantic where Hurricane Melissa is churning is like a boiler that has been left on for too long. The ocean waters are around 30 degrees Celsius, 2 to 3 degrees above normal, and the warmth runs deep,” University of Redding research scientist Akshay Deoras said in a public statement. (Those exceedingly warm temperatures are “up to 700 times more likely due to human-caused climate change,” the climate communication group Climate Central said in a press release.)
Based on Intergovernmental Panel on Climate Change reports, the National Oceanic and Atmospheric Administration concluded in 2024 that “tropical cyclone intensities globally are projected to increase” due to anthropogenic climate change, and that “rapid intensification is also projected to increase.”
NOAA also noted that research suggested “an observed increase in the probability of rapid intensification” for tropical cyclones from 1982 to 2017 The review was still circumspect, however, labeling “increased intensities” and “rapid intensification” as “examples of possible emerging human influences.”
What is well known is that hurricanes require warm water to form — at least 80 degrees Fahrenheit, according to NOAA. “As long as the base of this weather system remains over warm water and its top is not sheared apart by high-altitude winds, it will strengthen and grow.”
A 2023 paper by hurricane researcher Andra Garner argued that between 1971 and 2020, rates of intensification of Atlantic tropical storms “have already changed as anthropogenic greenhouse gas emissions have warmed the planet and oceans,” and specifically that the number of these storms that intensify from Category 1 or weaker “into a major hurricane” — as Melissa did so quickly — “has more than doubled in the modern era relative to the historical era.”
“Hurricane Melissa has been astonishing to watch — even as someone who studies how these storms are impacted by a warming climate, and as someone who knows that this kind of dangerous storm is likely to become more common as we warm the planet,” Garner told me by email. She likened the warm ocean waters to “an extra shot of caffeine in your morning coffee — it’s not only enough to get the storm going, it’s an extra boost that can really super-charge the storm.”
This year has been an outlier for the Atlantic with three Category 5 storms, University of Miami senior research associate Brian McNoldy wrote on his blog. “For only the second time in recorded history, an Atlantic season has produced three Category 5 hurricanes,” with wind speeds reaching and exceeding 157 miles per hour, he wrote. “The previous year was 2005. This puts 2025 in an elite class of hurricane seasons. It also means that nearly 7% of all known Category 5 hurricanes have occurred just in this year.” One of those Category 5 storms in 2005 was Hurricane Katrina.
Jamaican emergency response officials said that thousands of people were already in shelters amidst storm surge, flooding, power outages, and landslides. Even as the center of the storm passed over Jamaica Tuesday evening, the National Weather Service warned that “damaging winds, catastrophic flash flooding and life-threatening storm surge continues in Jamaica.”