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An interview with Ola Källenius on Mercedes-Benz’s road to electrification.
Back in 2019 Mercedes-Benz announced that it would go fully electric by 2030 where markets allow, and the brand is rapidly heading towards that goal. Every new platform and powertrain developed by Mercedes starting from 2025 will be electric, with the current set of gas engines designed to last through the next few product life cycles until being phased out.
Even more importantly, according to Mercedes-Benz’s chairman of the board and CEO Ola Källenius, Mercedes will be completely carbon-neutral by 2039, a plan it calls Ambition 2039. This was derived from the Paris Climate Agreement, which aims for the world to be net zero by 2050. I sat down with Källenius at a roundtable in Vienna during the first drive of the new E-Class – still an internal-combustion car, but one with electrified powertrains – to learn more about Mercedes’ decarbonization plans, EV strategy, and overall outlook on the future of the automotive industry.
“Mercedes-Benz is a brand that stands for the promise of a better future, and that better future is fundamentally a zero-emissions business,” says Källenius, adding that the decarbonization goal will happen in just three product life cycles. He also believes that Mercedes could actually hit its decarbonization goal a little early, closer to the start of the 2030s than the end.
It’s not just people inside the company that want this to happen, either. “There’s not a single long investor in Mercedes stock that doesn’t believe the company needs to decarbonize,” Källenius says. “Even if there weren’t regulatory will, we’re at the point where the financial market made up its mind that a sustainable business strategy is the one that is more economically safe.” He adds that even investors with fossil-based revenue streams are heavily investing in new verticals.
Källenius also thinks aggressively pursuing decarbonization will let Mercedes stay nimble. “We already have strategic clarity; we know what the journey and destination is, and it’s zero emissions,” he says. “But during this transformation, which is more than a decade long and it’s difficult to judge exactly when and what will happen, we need tactical flexibility and we have that.” This means that when the industry gets to the point where the new technology unseats the incumbent technology and there is exponential growth, Mercedes needs to be (and already is) in a position where it doesn’t fall behind. Källenius describes Mercedes as being its own venture capitalist, as it’s in control over financing for its transition to EVs.
All of Mercedes’ global assembly plants have already been made powertrain flexible, so a shift to more EV production will be easy, Källenius argues. Mercedes recently transformed its Alabama facility to produce the EQE and EQS SUVs for global consumption, for example.
Also important to decarbonization is the manufacturing process. “The defining challenge of our generation is to take care of the CO2 problem,” says Källenius, “and it has to be from A to Z, all the suppliers, all our operations, the car itself and the car in use. The twin of the CO2 problem is a circular economy. How do we reduce the use of primary materials in the production of goods? It’s an even bigger problem to solve technologically and economically.” For most current car manufacturers the secondary material content – materials that have been used or recycled – is between 20 to 30 percent. Mercedes is targeting 40 percent by 2030. “That might not sound ambitious, but believe me, engineering-wise it’s unbelievably ambitious,” Källenius says.
The idea is to decouple economic growth from resource usage growth, especially when it comes to EV batteries as they are made up of precious materials like lithium, manganese and cobalt. Mercedes is building its own experimental battery recycling and research factory along with some partners, and prototypes have already been developed that can get recycling quotes into “the deep 90 percent” range. It’s also working with German chemical companies to go through every polymer category and figure out recycling options category by category. Källenius says that one day batteries coming back from vehicles will be “the biggest virtual mine in the world.”
You might think it would be hard to get Mercedes’ suppliers and partners on board with the Ambition 2039 plan, but according to Källenius that wasn’t the case. “When we defined Ambition 2039 it only works if all our suppliers go CO2 neutral as well. If you’re not on board with the program, you’re not on board,” says Källenius. “If all things are equal from performance to quality and price, in a competitive bid if one company has a better plan for decarbonization than the other, that could be the kind of thing that tips the scale.”
Once a year Mercedes holds a conference where it invites 500 of its most important suppliers to go over the year’s results and plan for the future, and at the first one in 2019 after announcing Ambition 2039 the company told its suppliers that it expected each one to come up with an equivalent plan. “The reaction back then from some of the more progressive companies was ‘welcome to the club, you are preaching to the choir,’ and for many in the room it was ‘oh shit, these guys are serious,’” remembers Källenius. “Now I would say 90 percent of our suppliers have a plan.”
Some of Mercedes’ steel suppliers are already deep into carbon-free steel production, with the first results to be in production cars in less than two years. One of the companies, the Swedish firms H2GS, should be carbon-free by 2030 thanks to the use of hydroelectric power. As another example, Mercedes is working with an aluminum producer to reduce its carbon footprint by 70 percent. “Ten years ago, pretty much everyone around the table would’ve said ‘that’s not possible, it’s not gonna happen,’” says Källenius. “Now it’s happening.”
Källenius says the two core technologies driving the shift to EVs are the electric drivetrains and the software, and vertical integration is extremely important to both. For instance, Mercedes owns everything about its powertrains all the way down to the battery chemistry.
The vertical integration is tougher when it comes to the digital side of things. Traditionally electronic architectures in cars have been decentralized – when automakers buy an ECU they buy an entire software package along with it, and the car manufacturer then integrates the functionality. “We said we need to control the brain and central nervous system of the car,” says Källenius. Having this much centralized control over the software means updates and improvements can be made much quicker than before.
The new E-Class is the first Mercedes to have the updated MBUX operating system and cloud infrastructure, in which every single line of code has been programmed by Mercedes for the first time.
Like nearly every other carmaker, Mercedes recently announced that its future EVs will use the NACS charge port pioneered by Tesla. NACS will soon become an SAE standard, which Källenius says played into the decision to switch. “We always do what we think is best for the customer in terms of convenience, and the most likely scenario is NACS,” says Källenius. The first NACS-equipped Benzes won’t start coming out until around 2025, and in the meantime the brand will offer an adapter for existing EVs with the CCS charge port.
Automakers have never historically worked on gas station infrastructure, leaving that to energy companies, but in the electric era that is changing too. Accessible fast charging is potentially the largest pain point for EV customers, so more car companies are figuring out their own solutions to help aid the lagging infrastructure. Later this year Mercedes will open its first high-speed charging stations in the US, with 10,000 coming to America, China and Europe by the end of the decade as part of a multi-billion-dollar investment. The switch to NACS will help in the meantime, allowing Mercedes EV drivers to use Tesla’s expansive Supercharger network. “While we’re building our charging infrastructure, why not offer the Mercedes customer access to the 12,000 chargers built by another company,” Källenius says, “it will create more convenience and maybe take away a little bit of doubt for people that are thinking about buying an EV.”
When it comes to passenger cars Källenius says EVs are the clear way forward versus hydrogen or other synthetic fuels, but those solutions could have other uses. Shipping is one of the biggest issues when it comes to decarbonization; for mass-volume models it’s easy enough to build a local factory in China or the U.S., but for a low-volume model like the SL sports car it’s not economically feasible to have multiple production locations. Mercedes is maximizing its use of shipping by rail, especially in countries like Germany where it’s more feasible, and it’s experimenting with using hydrogen for semi trucks. Overseas and air shipping is even tougher to decarbonize, but synthetic fuels could help with that in the future too.
Källenius just celebrated his 30th anniversary at Mercedes, and he says right now is the most exciting time to be in the industry because everything is changing.
“We have to reinvent the original invention.,” he says. “We have got to be Gottlieb Daimler and Karl Benz again.”
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Current conditions: Bosnia’s capital of Sarajevo is blanketed in a layer of toxic smog • Temperatures in Perth, in Western Australia, could hit 106 degrees Fahrenheit this weekend • It is cloudy in Washington, D.C., where lawmakers are scrambling to prevent a government shutdown.
The weather has gotten so weird that the U.S. National Oceanic and Atmospheric Administration is holding internal talks about how to adjust its models to produce more accurate forecasts, the Financial Timesreported. Current models are based on temperature swings observed over one part of the Pacific Ocean that have for years correlated consistently with specific weather phenomena across the globe, but climate change seems to be disrupting that cause and effect pattern, making it harder to predict things like La Niña and El Niño. Many forecasters had expected La Niña to appear by now and help cool things down, but that has yet to happen. “It’s concerning when this region we’ve studied and written all these papers on is not related to all the impacts you’d see with [La Niña],” NOAA’s Michelle L’Heureux told the FT. “That’s when you start going ‘uh-oh’ there may be an issue here we need to resolve.”
There is quite a lot of news coming out of the Department of Energy as the year (and the Biden administration) comes to an end. A few recent updates:
Walmart, the world’s largest retailer, does not expect to meet its 2025 or 2030 emissions targets, and is putting the blame on policy, infrastructure, and technology limitations. The company previously pledged to cut its emissions by 35% by next year, and 65% by the end of the decade. Emissions in 2023 were up 4% year-over-year.
Walmart
“While we continue to work toward our aspirational target of zero operational emissions by 2040, progress will not be linear … and depends not only on our own initiatives but also on factors beyond our control,” Walmart’s statement said. “These factors include energy policy and infrastructure in Walmart markets around the world, availability of more cost-effective low-GWP refrigeration and HVAC solutions, and timely emergence of cost-effective technologies for low-carbon heavy tractor transportation (which does not appear likely until the 2030s).”
BlackRock yesterday said it is writing down the value of its Global Renewable Power Fund III following the failure of Northvolt and SolarZero, two companies the fund had invested in. Its net internal rate of return was -0.3% at the end of the third quarter, way down from 11.5% in the second quarter, according toBloomberg. Sectors like EV charging, transmission, and renewable energy generation and storage have been “particularly challenged,” executives said, and some other renewables companies in the portfolio have yet to get in the black, meaning their valuations may be “more subjective and sensitive to evolving dynamics in the industry.”
Flies may be more vulnerable to climate change than bees are, according to a new study published in the Journal of Melittology. The fly haters among us might shrug at the finding, but the researchers insist flies are essential pollinators that help bolster ecosystem biodiversity and agriculture. “It’s time we gave flies some more recognition for their role as pollinators,” said lead author Margarita López-Uribe, who is the Lorenzo Langstroth Early Career Associate Professor of Entomology at Penn State. The study found bees can tolerate higher temperatures than flies, so flies are at greater risk of decline as global temperatures rise. “In alpine and subarctic environments, flies are the primary pollinator,” López-Uribe said. “This study shows us that we have entire regions that could lose their primary pollinator as the climate warms, which could be catastrophic for those ecosystems.”
“No one goes to the movies because they want to be scolded.” –Heatmap’s Jeva Lange writes about the challenges facing climate cinema, and why 2024 might be the year the climate movie grew up.
Whether you agree probably depends on how you define “climate movie” to begin with.
Climate change is the greatest story of our time — but our time doesn’t seem to invent many great stories about climate change. Maybe it’s due to the enormity and urgency of the subject matter: Climate is “important,” and therefore conscripted to the humorless realms of journalism and documentary. Or maybe it’s because of a misunderstanding on the part of producers and storytellers, rooted in an outdated belief that climate change still needs to be explained to an audience, when in reality they don’t need convincing. Maybe there’s just not a great way to have a character mention climate change and not have it feel super cringe.
Whatever the reason, between 2016 and 2020, less than 3% of film and TV scripts used climate-related keywords during their runtime, according to an analysis by media researchers at the University of Southern California. (The situation isn’t as bad in literature, where cli-fi has been going strong since at least 2013.) At least on the surface, this on-screen avoidance of climate change continued in 2024. One of the biggest movies of the summer, Twisters, had an extreme weather angle sitting right there, but its director, Lee Isaac Chung, went out of his way to ensure the film didn’t have a climate change “message.”
I have a slightly different take on the situation, though — that 2024 was actuallyfull of climate movies, and, I’d argue, that they’re getting much closer to the kinds of stories a climate-concerned individual should want on screen.
That’s because for the most part, when movies and TV shows have tackled the topic of climate change in the past, it’s been with the sort of “simplistic anger-stoking and pathos-wringing” that The New Yorker’s Richard Brody identified in 2022’s Don’t Look Up, the Adam McKay satire that became the primary touchpoint for scripted climate stories. At least it was kind of funny: More overt climate stories like last year’s Foe, starring Saoirse Ronan and Paul Mescal, and Extrapolations, the Apple TV+ show in which Meryl Streep voices a whale, are so self-righteous as to be unwatchable (not to mention, no fun).
But what if we widened our lens and weren’t so prescriptive? Then maybe Furiosa, this spring’s Mad Max prequel, becomes a climate change movie. The film is set during a “near future” ecological collapse, and it certainly makes you think about water scarcity and our overreliance on a finite extracted resource — but it also makes you think about how badass the Octoboss’ kite is. The same goes for Dune: Part Two, which made over $82 million in its opening weekend and is also a recognizable environmental allegory featuring some cool worms. Even Ghostbusters: Frozen Empire, a flop that most people have already memory-holed, revisitedThe Day After Tomorrow’s question of, “What if New York City got really, really, really cold?”
Two 2024 animated films with climate themes could even compete against each other at the Academy Awards next year. Dreamworks Animation’s The Wild Robot, one of the centerpiece films at this fall’s inaugural Climate Film Festival, is set in a world where sea levels have risen to submerge the Golden Gate Bridge, and it impresses on its audience the importance of protecting the natural world. And in Gints Zilbalodis’ Flow, one of my favorite films of the year, a cat must band together with other animals to survive a flood.
Flow also raises the question of whether a project can unintentionally be a climate movie. Zilbalodis told me that making a point about environmental catastrophe wasn’t his intention — “I can’t really start with the message, I have to start with the character,” he said — and to him, the water is a visual metaphor in an allegory about overcoming your fears.
But watching the movie in a year when more than a thousand people worldwide have died in floods, and with images of inundated towns in North Carolina still fresh in mind, it’s actually climate change itself that makes one watch Flow as a movie about climate change. (I’m not the only one with this interpretation, either: Zilbalodis told me he’d been asked by one young audience member if the flood depicted in his film is “the future.”)
Perhaps this is how we should also consider Chung’s comments about Twisters. While nobody in the film says the words “climate change” or “global warming,” the characters note that storms are becoming exceptional — “we've never seen tornadoes like this before,” one says. Despite the director’s stated intention not to make the movie “about” climate change, it becomes a climate movie by virtue of what its audiences have experienced in their own lives.
Still, there’s that niggling question: Do movies like these, which approach climate themes slant-wise, really count? To help me decide, I turned to Sam Read, the executive director of the Sustainable Entertainment Alliance, an advocacy consortium that encourages environmental awareness both on set and on screen. He told me that to qualify something as a “climate” movie or TV show, some research groups look to see if climate change exists in the world of the story or whether the characters acknowledge it. Other groups consider climate in tiers, such as whether a project has a climate premise, theme, or simply a moment.
The Sustainable Entertainment Alliance, however, has no hard rules. “We want to make sure that we support creatives in integrating these stories in whatever way works for them,” Read told me.
Read also confirmed my belief that there seemed to be an uptick in movies this year that were “not about climate change but still deal with things that feel very climate-related, like resource extraction.” There was even more progress on this front in television, he pointed out: True Detective: Night Country wove in themes of environmentalism, pollution, mining, and Indigenous stewardship; the Max comedy Hacks featured an episode about climate change this season; and Industry involved a storyline about taking a clean energy company public, with some of the characters even attending COP. Even Doctor Odyssey, a cruise ship medical drama that airs on USA, worked climate change into its script, albeit in ridiculous ways. (Also worth mentioning: The Netflix dating show Love is Blind cast Taylor Krause, who works on decarbonizing heavy industry at RMI.)
We can certainly do more. As many critics before me have written, it’s still important to draw a connection between things like environmental catastrophes and the real-world human causes of global warming. But the difference between something being “a climate movie” and propaganda — however true its message, or however well-intentioned — is thin. Besides, no one goes to the movies because they want to be scolded; we want to be moved and distracted and entertained.
I’ve done my fair share of complaining over the past few years about how climate storytelling needs to grow up. But lately I’ve been coming around to the idea that it’s not the words “climate change” appearing in a script that we need to be so focused on. As 2024’s slate of films has proven to me — or, perhaps, as this year’s extreme weather events have thrown into relief — there are climate movies everywhere.
Keep ‘em coming.
They might not be worried now, but Democrats made the same mistake earlier this year.
Permitting reform is dead in the 118th Congress.
It died earlier this week, although you could be forgiven for missing it. On Tuesday, bipartisan talks among lawmakers fell apart over a bid to rewrite parts of the National Environmental Policy Act. The changes — pushed for by Representative Bruce Westerman, chairman of the House Natural Resources Committee — would have made it harder for outside groups to sue to block energy projects under NEPA, a 1970 law that governs the country’s process for environmental decisionmaking.
When those talks died, they also killed a separate deal over permitting struck earlier this year between Senator Joe Manchin of West Virginia and Senator John Barrasso of Wyoming. That deal, as I detailed last week, would have loosened some federal rules around oil and gas drilling in exchange for a new, quasi-mandatory scheme to build huge amounts of long-distance transmission.
Rest in peace, I suppose. Even if lawmakers could not agree on NEPA changes, I think Republicans made a mistake by not moving forward with the Manchin-Barrasso deal. (I still believe that the standalone deal could have passed the Senate and the House if put to a vote.) At this point, I do not think we will see another shot at bipartisan permitting reform until at least late 2026, when the federal highway law will need fresh funding.
But it is difficult to get too upset about this failure because larger mistakes have since compounded the initial one. On Wednesday, Republican Speaker Mike Johnson’s bipartisan deal to fund the government — which is, after all, a much more fundamental task of governance than rewriting some federal permitting laws — fell apart, seemingly because Donald Trump and Elon Musk decided they didn’t like it. If I can indulge in the subjunctive for a moment: That breakdown might have likely killed any potential permitting deal, too. So even in a world where lawmakers somehow did strike a deal earlier this week, it might already be dead. (As I write this, the House GOP has reportedly reached a new deal to fund the government through March, which has weakened or removed provisions governing pharmacy benefit managers and limiting American investments in China.)
The facile reading of this situation is that Republicans now hold the advantage. The Trump administration will soon be able to implement some of the fossil fuel provisions in the Manchin-Barrasso deal through the administrative state. Trump will likely expand onshore and offshore drilling, will lease the government’s best acreage to oil and gas companies, and will approve as many liquified natural gas export terminals as possible. His administration will do so, however, without the enhanced legal protection that the deal would have provided — and while those protections are not a must-have, especially with a friendly Supreme Court, their absence will still allow environmental groups to try to run down the clock on some of Trump’s more ambitious initiatives.
Republicans believe that they will be able to get parts of permitting reform done in a partisan reconciliation bill next year. These efforts seem quite likely to run aground, at least as long as something like the current rules governing reconciliation bills hold. I have heard some crazy proposals on this topic — what if skipping a permitting fight somehow became a revenue-raiser for the federal government? — but even they do not touch the deep structure of NEPA in the way a bipartisan compromise could. As Westerman toldPolitico’s Josh Siegel: “We need 60 votes in the Senate to get real permitting reform … People are just going to have to come to an agreement on what permitting reform is.” In any case, Manchin and the Democrats already tried to reform the permitting system via a partisan reconciliation bill and found it essentially impossible.
Even if reconciliation fails, Republicans say, they will still be in a better negotiating position next year than this year because the party will control a few more Senate votes. But will they? The GOP will just have come off a difficult fight over tax reform. Twelve or 24 months from now, demands on the country’s electricity grid are likely to be higher than they are today, and the risk of blackouts will be higher than before. The lack of a robust transmission network will hinder the ability to build a massive new AI infrastructure, as some of Trump’s tech industry backers hope. But 12 or 24 months from now, too, Democrats — furious at Trump — are not going to be in a dealmaking mood, and Republicans have relatively few ways to bring them to the table.
In any case, savvy Republicans should have realized that it is important to get supply-side economic reforms done as early in a president’s four-year term as possible. Such changes take time to filter through the system and turn into real projects and real economic activity; passing the law as early as possible means that the president’s party can enjoy them and campaign on them.
All of it starts to seem more and more familiar. When Manchin and Barrasso unveiled their compromise earlier this year, Democrats didn’t act quickly on it. They felt confident that the window for a deal wouldn’t close — and they looked forward to a potential trifecta, when they would be able to get even more done (and reject some of Manchin’s fossil fuel-friendly compromises).
Democrats, I think, wound up regretting the cavalier attitude that they brought to permitting reform before Trump’s win. But now the GOP is acting the same way: It is rejecting compromises, believing that it will be able to strike a better deal on permitting issues during its forthcoming trifecta. That was a mistake when Democrats did it. I think it will be a mistake for Republicans, too.