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Americans want a variety ... of crossovers.
America’s electric car market has a new champion. The automaking alliance of Hyundai Motor Group and Kia Motors is now the second biggest seller of electric cars in the United States, according to new data released last week by Bloomberg BNEF.
The two companies sold more than 117,000 electric vehicles in the United States last year, or about 8% of all new EVs nationwide, according to the research firm. Only Tesla, the industry’s longtime leader, sold more electric cars: It still commands about half of U.S. market share.
The two companies’ success is an encouraging sign in what was more broadly a weird year for the EV market. Scarcely more than a year ago, the public’s demand for electric cars overwhelmed available inventory, and dealers were selling every EV they could get their hands on.
But as gas prices have fallen, the growth in EV sales in the United States has slowed, and the market has gotten more uneven. Tesla, looking to shore up its market position, launched a price war last year that juiced sales but cut deep into its profits. Ford and General Motors, meanwhile, are suffering anemic sales and cutting back on their short-term EV plans.
Amid this patchy landscape, Hyundai and Kia’s growth stands out. While the two companies are technically independent, Hyundai owns about a third of Kia Motors, and they collaborate on vehicle design, engineering, and manufacturing. They also use the same vehicle “platforms,” a common set of parts that can be used across models.
Since the news came out last week, I’ve seen climate people on Twitter and elsewhere try to explain why it’s happening. Many of these explanations conform to the views that the urban, progressive climate commentariat already hold about the car market. Look, Hyundai and Kia are winning because they’re making smaller cars, not behemoth SUVs.
But the answer, while not quite the opposite, doesn’t line up with what many might wish. In fact, Hyundai and Kia are dominating the EV market right now by churning out a mostly unbroken stream of crossover and SUVs. All but one of their electric cars qualifies as an SUV or crossover; all of their plug-in hybrids are SUVs. It is this commitment to repetition — to giving the consumer a lot of choices on a central theme — that sets their product lines apart right now.
You can see the importance of this by looking at their models in more depth. Take the Hyundai Ioniq 5 and the Kia EV6, for instance, which have led EV sales at the two brands and which are built on the same platform. Each is an electrified take on the type of car that, for years now, Americans haven’t been able to get enough of: the compact crossover SUV. The Ioniq 5 and EV6 each have two rows of seating and 25 cubic feet of trunk space. They drive more or less like a car, sit high on the road like an SUV, and fall in the broad category of cars that — as a friend’s wife puts it — looks like a fist with its thumb stuck out.
The Ioniq 5 and EV6 are also really, really similar to the Mustang Mach E, Ford’s attempt at an electric crossover. In fact, if you look only at specs, they’re basically the same car. All three have the same length and width and take up about 95 square feet of road space. All three have five seats. All three have roughly the same size trunk, although the Ford’s is maybe slightly bigger. And all three have an entry-level model starting at about $42,000 — although the lowest trim Ford has slightly more range and horsepower, and costs about a grand more.
As you might expect from those specs, the Mach E narrowly outsold the Ioniq 5 and EV6 in the United States last year. Ford sold more than 40,000 Mach Es in 2023, while Hyundai moved nearly 34,000 Ioniq 5s and Kia sold 19,000 EV6s. But here’s the thing: The Mach E did not outsell the Ioniq 5 and EV6 combined. And unlike Ford, which only sells one electric SUV, Hyundai and Kia continued to flood the zone with SUV options for consumers.
How many options? Hyundai sold plug-in versions of its Tuscon and Santa Fe SUVs. Kia sold an electric version of its subcompact Niro SUV and a plug-in hybrid version of its Sportage SUV. And even though Kia only started selling its new three-row SUV, the EV9, in December, it had already delivered more than 1,000 of them by the end of the year.
In fact, only one electric car from Hyundai-Kia — the new Ioniq 6 — was designed like a traditional sedan. But it made up only around 8% of the alliance’s total sales. Hyundai and Kia achieved their commanding position by giving Americans what they want: a seemingly endless stream of SUVs and crossovers.
Now, it matters here that Kia and Hyundai are two different companies, so there is some automatic duplication in their product lines. It might never make sense for Ford or GM to sell cars as similar as the EV6 and Ioniq 5. But if we’re being honest, their SUV lineups are already pretty duplicative: Do most consumers understand the difference between a Ford Edge and a Ford Escape? There’s no reason Ford couldn’t add an Escape EV to its lineup — something a little smaller and a little cheaper. That’s exactly what Kia does with the EV Niro, after all.
It helps, too, that lots of Kia and Hyundai’s cars look like great deals for consumers. Many of their key offerings hover in the high $30,000s to mid $40,000s, seemingly the sweet spot for new family cars today. Even though Hyundai and Kia’s cars don’t qualify for the new EV tax credit, Americans can use the $7,500 federal tax credit if they lease a vehicle instead.
Hyundai especially has used this credit — and a creative mix of rebates and low-interest-rate offers — to bring down the monthly payment for consumers. (Nearly half of new Ioniq 5s are leased, according to BNEF, which is a much higher rate than normal for Hyundai’s cars.)
Finally, it helps that Kia and especially Hyundai are making more interesting-looking vehicles than any other automaker right now. Compared to the staid peoplemover that is, say, the Volkswagen ID.4, the Ioniq 5 is striking, novel, and seems to push EV design forward. Its pixelated taillights are unlike anything else on the road, and it’s an extremely charismatic vehicle to drive; it’s just a better product, overall, than other cars out there.
And that might be the most important lesson behind Hyundai and Kia’s success. For the past few decades, decarbonization advocates have gotten used to thinking about electric cars primarily as a market abstraction: Are they cheap? Are they available? Are they growing as a sector? But as the EV transition continues, we are going to have to think about them more as products, as specific tools that can improve someone’s life by their presence. The EV companies that ultimately win will make better products than their competitors — cars that bring together capability, design, and price in a special way. Right now, Hyundai and Kia are pushing to the front of that race.
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On the cobalt conundrum, Madagascar’s mining mess, and Antarctica’s ‘Greenlandification’
Current conditions: Severe storms are sweeping through the central Great Plains states this weekend, whipping up winds of up to 75 miles per hour • Freezing temperatures are settling over Kazakhstan and Mongolia • A record heat wave in Australia is raising temperatures as high as 113 degrees Fahrenheit.
Nearly two dozen states signed onto two lawsuits Thursday to stop the Trump administration from ending the $7 billion grant program that funded solar panels in low-income communities. The first complaint, filed Wednesday, seeks monetary damages over the Environmental Protection Agency’s bid to eliminate the so-called Solar for All program. A second lawsuit, filed Thursday, seeks to reinstate the program. Arizona Attorney General Kris Mayes told Reuters the cancellation affected 900,000 low-income households nationwide, including some 11,000 in Arizona that the state expected to see a 20% spike in bills after losing access to the $156 million in funding from Solar for All. California would lose $250 million in funding. The litigation comes days after Harris County, which encompasses most of Houston, Texas, filed suit against the EPA over its own loss of $250 million due to the program’s termination. Earlier this month, a coalition of solar energy companies, labor unions, nonprofit groups, and homeowners also sued the EPA over the cancellation.
It remains to be seen whether other countries are willing to balk at the Trump administration’s push to gut key carbon-cutting policies. But at least in theory, later today, the drafting group for the International Maritime Organization, the United Nations agency overseeing global shipping, will vote on an emissions pricing mechanism meant to slash greenhouse gas output from an industry that still relies on some of the most heavily polluting fuels. The scheduled vote comes a day after President Donald Trump pressed the international body to reject the proposal, calling it “the Global Green New Scam Tax on Shipping” and vowing to ignore the rules.
The maritime shipping industry accounts for about 3% of global emissions. But the impact of shipping fuels is substantial. As Heatmap’s Robinson Meyer wrote in December, a study found that, when the IMO began enforcing rules to remove a toxic pollutant, sulfur dioxide from shipping fuels, the planet’s temperatures spiked. That’s because, in addition to inflaming the heart and lungs, triggering asthma attacks, and causing acid rain, sulfur dioxide can also reflect heat back into space, artificially cooling the Earth. When that fuel went away, the warming effects of all the carbon in the atmosphere became more apparent.
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A child worker at a cobalt mine in the Democratic Republic of the Congo. Michel Lunanga/Getty Images
The Department of Defense canceled a tender to buy cobalt, in what the trade publication Mining.com called “a fresh sign of the challenges facing Western countries trying to bolster domestic supplies of the battery metal.” In mid-August, the Defense Logistics Agency first sought offers for up to 7,500 tons of the bluish metal used in batteries and alloys for jet engines over the next five years, in a contract worth as much as $500 million. It was, according to Bloomberg, the U.S. government’s first attempt to acquire the metal since 1990. When no deals came in by the original due date of August 29, the offer was extended to October 15. But a notice published on a government website Wednesday indicated that the offer had been pulled. The move marks an apparent setback for the Pentagon’s effort to stockpile critical minerals, as I reported in this newsletter earlier this week.
While the funding doesn’t produce raw cobalt from mining, as I reported for Heatmap last month, the DLA has backed an Ohio-based startup called Xerion that’s commercializing a novel approach to processing both that metal and gallium, another mineral over which China has tightened export controls recently. It’s not alone. As Heatmap’s Katie Brigham wrote last month, “everybody wants to invest in critical mineral startups.”
The British rare earths processor Pensana has canceled plans for a refinery in East Yorkshire, England, in favor of investing in an American project instead. The company spent the past seven years developing a $268 million rare earths mine in Angola. One of the largest of its kind in the world, the project is scheduled to begin delivering raw materials in 2027. To turn that ore into industrial-grade materials, Pensana had planned to build a processing facility at the Saltend Chemicals Plant near Hull, England, that would have turned the metals into powerful magnets. The project won about $6.7 million in support from the British government. But Pensana’s founder and chairman, Paul Atherley, told the BBC that was “nowhere near enough.” He compared the deal to the Trump administration’s direct investment of billions of dollars into MP Materials, the country’s only rare earths mine. Pensana instead announced plans to work with the U.S. refiner ReElement to develop a domestic American supply chain, and plans to list its shares on the Nasdaq. As I wrote in Tuesday morning’s newsletter, the world’s top metals trader warned this week that the West’s mineral weakness is a lack of refining capacity, not mining. “Mining is not critical,” Trafigura CEO Richard Holtum said in London on Monday, according to Mining Journal. “True supply chain security comes from processing investment, not just extraction.”
But even the increased supply of ore from overseas projects could be in jeopardy. I have a scoop this morning in Heatmap that highlights the geopolitical challenges U.S. mining projects face overseas. On Sunday, following weeks of youth-led protests over electricity and water outages, Madagascar’s military overthrew its government in a coup. Now the new self-declared leaders have pulled support for Denver-based mining developer Energy Fuels’ plans for a giant mine that would produce rare earths, uranium, and other metals. The so-called Toliara mine, worth an estimated $2 billion, had won approval from the previous government last winter. But a consultant on the ground in Madagascar’s capital of Antananarivo told me the new leaders had “announced the definitive cancellation” of what was previously described as the future “crown jewel” of an economy where 75% of people live on less than $3 per day and less than 40% of the population has access to electricity.
As recently as the 1990s, the Greenland Ice Sheet and the Arctic were melting at a measurable pace thanks to global warming, but Antarctica’s ice cap seemed securely frozen. But, as Inside Climate News reported Thursday, “not anymore.” New satellite data and field observations show the only unpopulated continent is thawing at an alarming rate, leading to what some scientists are now calling the “Greenlandification” of Antarctica, turning it into an environment that’s melting at a rate closer to the Arctic.
There’s little question as to what is causing the meltdown. More than 100 countries now experience at least 10 more “hot days” per year than a decade ago, when the Paris climate accord was first drafted, according to new data analysis from the research groups Climate Central and World Weather Attribution published Thursday in the Financial Times. In 10 countries, the warming over the past decade added roughly a month of additional “hot days.”
The good climate news, reported by Bloomberg: the Bay Area startup Rondo Energy has turned on the world’s largest industrial heat battery, a giant cubic structure that heats clay bricks with electricity from a 20-megawatt solar array to generate steam.
The bad climate news? That steam is used to force more oil out of the ground as part of Holmes Western Oil Corp.’s enhanced oil recovery system.
The mitigating factors to consider: The battery replaced a natural gas-fired boiler at the Kern County, California, facility. And proponents of enhanced oil recovery say the approach meets lasting demand for petroleum by extracting more fuel from existing wells rather than encouraging new drilling.
Denver-based Energy Fuels was poised to move forward on the $2 billion project before the country's leadership upheaval.
As the Trump administration looks abroad for critical minerals deals, the drama threatening a major American mining megaproject in Madagascar may offer a surprising cautionary tale of how growing global instability can thwart Washington’s plans to rewire metal supply chains away from China.
Just days after the African nation’s military toppled the government in a coup following weeks of protests, the country’s new self-declared leaders have canceled Denver-based Energy Fuels’ mine, Heatmap has learned.
The so-called Toliara mine was supposed to be the “crown jewel” of one of the world’s least developed economies, a megaproject designed to patch Madagascar into a new global supply chain meant to reroute trade in metals needed for everything from state-of-the-art weapons to electric vehicle batteries away from China.
Last December, Energy Fuels, the Denver-based rare earths and uranium miner, won approval from the Malagasy government to move forward on its Toliara Project, a critical minerals mine with a value analysts estimated at $2 billion. But on Thursday morning, the new president of Madagascar’s National Assembly “announced the definitive cancellation” of the project, Luke Freeman, a geopolitical consultant with 25 years of experience in Madagascar, told me by email.
Kim Casey, Energy Fuels’ head of investor relations, dismissed the legitimacy of the coup leaders’ decision in an emailed statement. The company is “watching the events in Madagascar closely, and like the rest of the world we are waiting to see how things unfold,” the statement said.
“At this time, governing bodies and areas of responsibility in Madagascar remain unclear,” she went on. “Any statements made by any individual politicians or others amid this crisis have no legal effect, nor should they be taken to represent official Madagascar government policy or the opinions of the majority of local communities.”
Still, Casey left open the possibility that the mine could be postponed. If the coup “results in any delays in our development plans for the Toliara Project,” she said, “Energy Fuels has multiple projects around the world which are advancing at the same time.” Investors seemed less confident. The company’s stock, which had soared by nearly 500% over the past six months, plunged 8% on Wednesday, and another 13% on Thursday afternoon.
Even if the project goes under, it’s unlikely to impact U.S. mineral supplies, Neha Mukherjee, a rare earths analyst the London-based battery-metals consultancy Benchmark Mineral Intelligence, told me. The mine did not have any public offtakers yet, but Energy Fuels announced plans last year to send uranium ore from the project to the White Mesa Mill in Utah for processing.
“Toliara remains at a very early stage and is still working towards a final investment decision, so immediate on-ground impacts are likely to be limited,” she told me in an email. But she warned that “investors and potential offtakers” may “take a more cautious approach until there’s greater clarity on the political environment.”
It is no accident that, despite its unique culture that blends influences from Africa and Asia, Madagascar is a place known to many Americans primarily as the setting of a series of fictional movies about cartoon animals that aren’t even native to the island nation off southeast Africa. More than 75% of the island's 32 million people live on less than $3 per day, and poverty levels have barely declined over the past decade. Less than 40% of its people have access to electricity.
On Sunday, sweeping month-long youth protests over power and water outages, dubbed a “Generation Z revolution,” evolved into a more traditional type of insurrection when an elite arm of Madagascar’s military overthrew the government in what the African Union denounced as a coup.
The upheaval highlights the challenges ahead for U.S. companies as Washington attempts to reduce its dependency on China, which controls most of the world’s mining and processing of key metals such as rare earths and lithium.
The Biden administration sought to get around the issue by making minerals extracted from countries with which the U.S. had free trade agreements eligible for the Inflation Reduction Act’s most generous electric vehicle tax credits. That strategy put a particular focus on allies with vast mining industries, including Australia, Chile, and Canada.
While President Donald Trump has phased out the tax credits, his administration has tried to broker deals across the world with developing countries whose resources China has largely monopolized in recent years. In May, Trump signed a deal with Ukraine to secure revenues from its as-yet largely untapped minerals once the war with Russia ends — a precondition for his administration’s continued assistance in the effort to repel the Kremlin’s invasion. A month later, Trump negotiated a peace deal between the Democratic Republic of the Congo and Rwanda, pausing a bloody conflict and setting the stage for the U.S. to secure new contracts for raw materials in the war-torn but resource-rich part of central Africa.
The administration’s ongoing pressure on Denmark to cede its autonomous territory of Greenland to the U.S. is widely considered a play for the Arctic island’s minerals. Earlier this month, Reuters reported that the administration is considering buying a stake in Critical Metals, a company prospecting for rare earths in Greenland.
Washington’s appetite for critical minerals could even redraw world maps in the next few years.
Under the terms of a peace agreement that ended a decade-long civil war in the 1980s, Bougainville, a breakaway island off Papua New Guinea, is slated to hold a referendum in 2027 over whether to become an independent nation. Polls suggest the overwhelming majority of voters will support secession. In the U.S., a former investment banker turned novelist named John D. Kuhns has taken up the cause of Bougainville’s independence, advocating that Washington support the would-be republic whose biggest economic asset is a shuttered Rio Tinto copper mine that the autonomous government wants to reopen — potentially with U.S. help.
Trump is also weighing recognizing the breakaway region of Somalia’s independence as Somaliland, which has functioned as a sovereign nation with an internationally praised democracy for more than three decades, in a bid to secure deals to mine its mineral riches. Senator Ted Cruz, the Texas Republican, called on Trump to grant Somaliland recognition as recently as August.
But the most promising potential region for critical minerals may be the one sandwiched between America’s two greatest rivals. In September 2013, then-President Joe Biden huddled with the leaders of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan on the sidelines of the United Nations General Assembly in New York. From that summit came the C5+1, a partnership between the U.S. and the five Central Asian nations to work on critical minerals. Weeks after Trump returned to office, Secretary of State Marco Rubio affirmed the Trump administration’s support for the partnership in a call with his Uzbek counterpart.
After Australia and Canada, the Central Asian republics represent the “lowest-hanging fruit” for developing a U.S. critical mineral supply chain, said Pini Althaus, a veteran mining executive making deals in the region. The countries are relatively stable, have recently enacted business reforms meant to invite U.S. companies to work there, and — as a means of safeguarding their independence from Moscow and Beijing — are eager to make deals with the U.S., he said.
“We are at least a couple of decades away from having a domestic supply chain in the United States that can meet all of our critical mineral needs,” Althaus told me. “Practically speaking, we don’t have enough of these materials in the U.S., so we must partner with allied countries. Central Asia offers a lot of these opportunities.”
These days, however, political instability isn’t unique to developing countries. The Trump administration is supposed to host a meeting of the C5+1 in Washington as early as next month, Althaus said — that is, if the ongoing government shutdown is resolved.
In a press conference about the newly recast program’s first loan guarantee, Energy Secretary Chris Wright teased his project finance philosophy.
Energy Secretary Chris Wright on Thursday announced a $1.6 billion loan guarantee for American Electric Power to replace 5,000 miles of transmission lines with more advanced wires that can carry more electricity. He also hinted at his vision for how the Trump administration could recast the role of the department's Loan Programs Office in the years to come.
The LPO actually announced that it had finalized an agreement, conditionally made in January under the Biden administration, to back AEP’s plan. The loan guarantee will enable AEP to secure lower-cost financing for the project, for an eventual estimated saving to energy consumers of $275 million over the lifetime of the loan.
“These are the kind of projects where we’re going to partner with businesses to make our energy system more efficient, more reliable, ultimately lower cost,” Wright said on a call with reporters.
And yet in the past few months, the department has also canceled loan guarantees and grants for other transmission projects that were expected to provide those same benefits — including the Grain Belt Express, an 800-mile line set to bring low-cost wind power from Kansas to the Chicago metropolitan area in Illinois.
“We don’t care about authorship,” Wright told reporters, acknowledging that the AEP loan was conditionally approved by the Biden administration. “Not all of them were nonsense. The ones that are in the interest of the American taxpayers, in the interest of the American ratepayers, and there’s a helpful role for government capital — we’re happy to support those.”
When asked specifically why AEP’s proposal met his criteria while the Grain Belt Express didn’t, Wright first made an argument about cost. “I have nothing against the Grain Belt Express,” he said. “I suspect it’ll still be developed. But it’s far more expensive on a per mile basis since it’s a brand new transmission line.”
His subsequent comments, however, hinted at a more significant shift in approach. He went on to argue that the project came with an unacceptable amount of risk since the developers didn’t have buyers yet for the power coming down the line. It was trying to “close on arbitrage,” he said, by buying up cheap wind power that was stranded in Kansas and bringing it to a larger market. “It’s a more commercial enterprise,” he said. “That’s done with private entrepreneurs and private capital.”
It’s important to note that the Grain Belt Express loan guarantee would have been issued under an innovation-focused program within the Loan Programs Office that was specifically geared toward higher risk projects that banks won’t otherwise touch. The AEP project is part of a different program focused on more mature technologies, with a goal of reducing the cost of major utility infrastructure upgrades to ratepayers.
When I floated Wright’s comments by Jigar Shah, the former head of the Loan Programs Office under the Biden administration, he was flummoxed. “It’s nonsensical,” he said. To Shah, taking Wright’s risk aversion to its logical conclusion would mean, for instance, that the office should not fund any nuclear energy projects. “If this becomes a new standard, that means nuclear is dead in the United States,” he said.
AEP is the first developer to secure a loan guarantee under the Energy Dominance Financing Program, Congress’ new name a Biden-era program within LPO that offered loan guarantees to utilities to “retool, repower, repurpose, or replace energy infrastructure.” Initially called the Energy Infrastructure Reinvestment Financing Program and created by the Inflation Reduction Act, it focused on projects with climate benefits, like making efficiency upgrades to power plants or installing renewables on the site of a former coal plant.
In the Biden administration’s view, AEP’s project would “contribute to emissions reductions by supporting existing and new clean generation by expanding transmission capacity in the regions in which they operate.”
Trump’s One Big Beautiful Bill Act rebranded the program and removed any requirements that projects reduce emissions. On Thursday’s call, Wright seemed to imply that it wasn’t just the Biden-era loan program that had been renamed. “The Loan Program Office is being rechristened the Energy Dominant Financing — it is the rechristening of the same department,” he said in response to a question about the office’s remaining loan authority. The Department of Energy did not respond to my request for clarification.
None of that means that the potential emissions benefits from AEP’s project won’t materialize. Limited transmission capacity is one of the biggest obstacles for bringing new wind and solar power online, and reconductoring could also reduce line losses, making the overall grid more efficient.
The transmission project — which includes plans to rebuild some power lines and reconductor others — will ultimately increase capacity by more than 100%, a spokesperson for AEP told me. The first phase will involve upgrades to about 100 miles of wires across Ohio and Oklahoma, while future phases will tackle lines in Indiana, Michigan, and West Virginia, with the intent of meeting growing demand from data centers and manufacturing development, according to a press release.
When reporters asked Wright about the other conditional loan guarantees the Biden administration had issued under the Energy Infrastructure Reinvestment program that are still pending, the secretary stressed that he was looking for applicants that had identified a clear set of projects they would implement. “Many were done in a hurry, without really even having the projects that the loans would be associated with identified. You can end up with a grab bag of projects without a lot of say for where the money went,” he said.
Wright accused the Biden administration of failing to ask applicants to detail the impact the projects would have on taxpayers and ratepayers — a key question his colleagues are now asking.
Shah disagreed with that portrayal. The whole point of the program was to reduce interest rates for utilities and require them to pass on the benefit to ratepayers. All of the projects awarded conditional commitments met that bar, he said.
He warned that if the Trump administration didn’t honor the remaining conditional commitments to utilities under the program — all 10 of them — it risked losing the trust of any new companies it attempts to make similar deals with.
“Most of the nuclear projects that they’re looking to chase are not going to get closed until 2028. And so what signal are they sending? That projects that get approved in the last year of an administration are not going to be honored in the next administration?”