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The market for fancy electric vehicles is anybody’s game.
One-pedal driving is a revelatory perk. Lift your foot off the accelerator in an electric vehicle and its regenerative braking kicks in, slowing the car while channeling recovered energy back into the battery. Once a person masters the feel, it’s possible to drive for miles on end without touching the brake pedal.
There’s just one problem: it’s jerky. During 50,000 miles in my own EV, I’ve learned to gently let off the accelerator to minimize the jostling. But, like working the clutch in a stick-shift, this is an acquired skill. The issue vexed the engineers at Rolls-Royce who wanted their electrified offering to replicate the “champagne stop” chauffeurs must master: stopping so gently that the masters of the universe riding in the back spill nary a drop of bubbly. In the end, they dealt with the aggressiveness of regen braking by turning it off.
Preservation of prosecco is a small quirk among a batch of big questions about how to electrify the luxury car. On the surface, this sounds like a simple matter: replace the gasoline guts with an electric powertrain, and you’re done. However, although the traditional luxury brands have embarked on the inevitable transition to electric, it’s a little murky just what a luxury EV is, who gets to make one, and whether the future of luxury really means never driving yourself again.
In the gasoline days there was little confusion. Toyota, Honda, and Nissan had their upscale brands (Lexus, Acura, and Infiniti, respectively) to push more plush versions of what were, fundamentally, the same cars. Brands like BMW and Mercedes-Benz offered performance alongside leather cushiness, all at a price point attainable to the upper-middle class. Porsche pushed a kind of performance-first luxury; the likes of Bentley and Rolls-Royce sold unattainable exclusivity to the 1 percent.
Along the way to the mainstream EV, definitions got a little looser. Thanks to the zippy performance, sex appeal, and high price of the Model S and X, Tesla positioned these as luxury EVs and peeled away buyers from the likes of Bimmer and Benz. Yet in terms of creature comforts, it’s hard to call a Tesla luxurious. Its spartan interior, defined by enormous touchscreens and little else, reflects the minimalist design language of Silicon Valley, not the rich Corinthian leather of old-fashioned style. Tesla has also been dogged by complaints about manufacturing inconsistencies such as thin paint and uneven door panel gaps — the kind of things that make German engineers toss and turn at night.
Elon Musk’s followers in the EV startup space are experimenting with the limits of the “luxury car,” too. Lucid’s Air is a more traditional big, posh sedan, with ridiculous power numbers and interior that tries to toe the line between LED future and maximalist past. Rivian’s R1T and R1S, meanwhile, build on the fact that pickups and SUVs have morphed from utilitarian workhorses into oversized luxury rides that command prices north of $50,000 — which happened long before EVs entered the chat. It doesn’t hurt that selling a vehicle on luxury allows a company to charge more, which brings in precious revenue a startup needs to get on its feet and helps to mask the high cost of the battery (the big challenge for anyone trying to deliver the true budget EV).
Now the traditional luxury brands are coming in force. BMW’s first mass-produced EV, the rounded-cube i3, was an avatar of the previous decade’s idea of an electric vehicle, full of design quirks meant to communicate futurism and sustainability. The i4, produced starting in 2021, looks a lot more like, well, a BMW sedan, with an interior that melds the BMW look of old (lots of buttons and fancy accents) with a 14.9-inch curved display meant to be a wow feature. The story is similar at Mercedes-Benz. Inside, it is a cushy, plush take on the LED spaceship look. From the outside, the main clue to the EQS’s electrification is the sealed-off grille. (EVs don’t need the open grille to suck in lots of air like a combustion car does, making possible the Tesla Model 3’s stark closed mouth.)
Luxury EV-makers are also learning how to pamper their prospective buyers by sanding off the rough edges of EV ownership, like range anxiety. More miles generally means more battery and therefore, more money. Pricey models from Rivian, Tesla, and Lucid allow the well-heeled buyer to reach 400 miles of range or more, and the Mercedes EQS is EPA rated to 350 miles but may deliver even more in the real world. Meanwhile, the “entry” EV is stuck with 250 to 300, and BMW’s range barely breaks the 300 mark.
Rolls-Royce is smoothing out not only its champagne stops, but also its starts. The super-luxe electric Spectre doesn’t use its monstrous torque to rocket off the line, but instead is engineered to glide from a start in a way that makes the car’s enormous mass invisible to its occupants. Meanwhile, BMW and Mercedes seem to have solved the riddle of cornering and feel in an EV, with Car and Driver saying the i4 outperforms its gasoline counterpart. (It doesn’t hurt that EVs carry their big batteries along the bottom, giving them a low center of gravity.) Hyundai makes excellent EVs, but there’s no mistaking that you’re in a BMW.
Besides comfort and performance, luxury carmakers have typically marketed their offerings on advanced technology. Here, the future of luxury EVs comes into focus. The big vehicle technology yet to come is true autonomy — after all, what's more luxurious than having someone, or something, else do the driving?
EVs and autonomous driving technologies are already intertwined, mostly because of Musk’s public insistence on Tesla’s Autopilot features and vision for full self-driving — not to mention the many public controversies about the system’s failures. Things are set to stay that way as automakers, and especially luxury ones, race to be the first to offer new features.
A recent Los Angeles Timesstory about Mercedes-Benz’s $45 billion move to go all-electric by 2030 notes the brand’s desire to retake the luxury EV market from Tesla, and a big part of that is by pulling ahead of Musk’s brand on autonomy. This year, Mercedes became the first brand to be given explicit permission in the U.S. to go ahead with Level 3 autonomous features in a vehicle on public roads.
Level 3 is a turning point. Levels 0, 1, and 2 in the Society of Automotive Engineers’ classification scheme include technologies now widely available in vehicles. Think of lane-keep assist and adaptive cruise control. These features lessen the driver’s burden, but they do not replace her. Levels 4 and 5 represent something that could truly be called self-driving. Level 3 is the bridge: the first time when — at slow speeds, and only under controlled circumstances on chosen roadways — the car is permitted to drive.
It’s also the most harrowing. An expert who spoke to me in February about Mercedes’ plan called Level 3 a “nightmare scenario.” The main worry is over the “handoff,” the moment when the human must be ready to retake control from the machine. Handoffs have the potential to lead to confusion over who’s in charge, and even momentary confusion on the road can have dire consequences. Some safety experts question whether we should allow Level 3 autonomy on public streets at all.
Ultimately, those fears may be moot. This technology is coming, and the future of (not) driving will be spearheaded by luxury cars as their makers jockey for technological supremacy. But even if Mercedes or another legacy car company pulls ahead in autonomous tech, they will still find the EV market a wilder, more competitive space than the staid market for luxury combustion cars ever was.
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The grid needs transformers, and transformers need foreign steel.
President Trump wants to unleash American energy dominance, reduce consumer costs, and lead on artificial intelligence. But his 25% steel and aluminum tariffs, which are set to go into effect next month, could work directly against all of those goals.
The reason has to do with a crucial piece of electrical equipment for expanding the grid. They’re called transformers, and they’re in critically short supply.
Transformers serve to reduce losses along power lines by regulating voltage as electricity travels between generators and end uses, and they are made using a specific type of steel called grain oriented electrical steel, or GOES. There’s only one domestic producer of GOES — Cleveland Cliffs — and at full capacity it cannot meet even half of the demand from domestic transformer manufacturers, according to Joe Donovan, the executive director of the Transformer Manufacturing Association of America.
“We’re forced into the international markets,” he told me. “Reliance on a single domestic supplier for this critical material is a national security risk,” he added later in an email.“The grid is the foundation of our entire economy and should not be reliant on a single source for such a critical component.”
In a fact sheet about the upcoming steel and aluminum tariffs, Trump said he wants to end the “global dumping” of cheap foreign steel into American markets. It’s not yet clear whether he will impose blanket fees on all steel imports from all countries or use a finer tooth comb. But GOES only accounts for 0.15% of global steel production, Donovan said. “Any new restrictive tariffs would not onshore domestic GOES manufacturing, but would instead increase electricity costs for American consumers and delay upgrades to the grid nationally, putting manufacturing projects and developments at risk,” he told me. He said his trade group is advocating for the tariffs to exclude GOES imports from allied countries including Italy, South Korea, Poland and Japan, as well as derivative products from Mexico and Canada.
The problem is not just that the U.S. doesn’t produce enough of this material, Donovan added. Cleveland Cliffs lacks the capacity to produce GOES “in the size or efficiency levels that are needed in modern, efficient large power transformers,” he said. “Thus, domestic transformer manufacturers are unable to procure this GOES from any domestic source.”
Transformers come in many varieties and sizes, from the small metal boxes that sit atop local power lines to the larger containers at substations that have big metal coils springing out of them. Adding anything to the grid — whether it’s a generator like a new solar farm or natural gas plant, or a new source of demand like an apartment complex or a data center — requires adding transformers.
For nearly two decades, electricity growth was stagnant in the U.S., and there wasn’t much reason to invest in transformer manufacturing or supply chains. But suddenly, the rise of artificial intelligence, coupled with a push to reshore manufacturing and electrify transport, plus worsening natural disasters that damage electrical infrastructure caused demand to soar. These pressures have not just affected the U.S., and transformer manufacturers globally have not been able to keep up. Over the past four to five years, lead times for procuring transformers went from just under a year to upwards of three years, and prices jumped 60% to 80%, according to Wood Mackenzie.
“The increase in equipment costs is both threatening the economics of projects and increasing the price of electricity,” analysts from the energy research firm wrote in October. “One small ray of light from a transformer cost perspective is that the price of grain oriented electrical steel, a key commodity input, has declined 60-70% recently.”
Trump’s tariffs will cut into those declines.
“A lot of utilities and all of our clients across the country are very nervous about the potential implications of this,” Ben Boucher, a senior analyst at Wood Mackenzie, told me. “I think everyone knows their costs are going to increase as a result, even if they source domestically, because there’s going to be more competition for domestically produced products.”
When Trump imposed tariffs on steel during his first presidency, it did not lead to new investment in domestic manufacturing of GOES. Instead, there was an uptick in imports of transformer cores, a component that already contains GOES, from Mexico and Canada, Boucher said.
I reached out to the Edison Electric Institute, the main trade group for utilities, for comment on how the transformer shortage has affected its members’ ability to meet rising electricity demand, and what the tariffs could mean for them. The group did not answer my questions and sent back a statement attributed to Scott Aaronson, the senior vice president for energy security and industry operations, which said the group supports the president’s goal of bolstering domestic manufacturing and looks forward to working with him “to ensure that any new tariffs don't raise customer energy bills due to higher commodity prices.”
Jonas Nahm, an associate professor at Johns Hopkins, who worked as a senior economist at the White House under Biden, told me there was a concerted effort to increase transformer production domestically over the past four years. Several manufacturers, including Siemens Energy and Hitachi Energy, announced new plants and plant expansions. Nahm wondered whether Trump’s tariffs on steel could end up undermining his goals by making those investments riskier. “In econ terms, it’s sort of a tariff inversion, where we’re tariffing the intermediate inputs more than we’re tariffing the import of the final product.”
We often talk about industries like the “oil industry” or the “steel industry” as if they are making homogenous, interchangeable products. In reality, neither oil nor steel is one, uniform thing, and in the context of policymaking — like President Trump’s tariffs — the differences are consequential.
My colleague Robinson Meyer wrote about this when Trump was threatening to put 25% tariffs on Canadian imports. The U.S. is the biggest producer of crude oil in the world, but the oil that comes out of our wells is “light and sweet,” meaning that it has relatively low viscosity and sulfur content. Meanwhile, many U.S. refineries are designed to process the “heavy and sour” crude oil extracted in Canada. Tariffs on imported oil would lead to spikes in gasoline prices. “You couldn’t create a better scenario to destroy the economics of U.S. coking refineries,” Rory Johnston, an oil markets analyst, told Robinson. Similarly, the U.S. is a major steel producer, but we’re still heavily reliant on imports for certain types of steel.
It’s unclear whether the administration is aware of the issue. Trump is imposing tariffs on steel and aluminum under Section 232 of the Trade Expansion Act of 1962, as he did during his first term, which requires the Department of Commerce to first conduct an investigation and confirm that the import of these products threatens U.S. national security. But there’s been no new investigation since Trump took office. In his proclamation announcing the tariffs, the President referenced the investigation his administration conducted in 2018, adding in some recent data points that make the case that the threats from then are still an issue.
“They’re operating with 2018 assumptions about the state of the world, and then threw some updated data in there in order to accelerate the process,” Nahm said. “You can see how maybe this wasn’t a big deal six years ago. Now electricity demand is going up, and it’s getting more expensive. That wasn’t something that was on the horizon in 2018 at all.”
On the IEA’s latest report, flooding in LA, and Bill Gates’ bad news
Current conditions: Severe thunderstorms tomorrow could spawn tornadoes in Mississippi, Louisiana, Arkansas, and Alabama • A massive wildfire on a biodiverse island in the Indian Ocean has been burning for nearly a month, threatening wildlife • Tropical Cyclone Zelia has made landfall in Western Australia with winds up to 180mph.
Bill Gates’ climate tech advocacy organization has told its partners that it will slash its grantmaking budget this year, dealing a blow to climate-focused policy and advocacy groups that relied on the Microsoft founder, Heatmap’s Katie Brigham has learned. Breakthrough Energy, the umbrella organization for Gates’ various climate-focused programs, alerted many nonprofit grantees earlier this month that it would not be renewing its support for them. This pullback will not affect Breakthrough’s $3.5 billion climate-focused venture capital arm, Breakthrough Energy Ventures, which funds an extensive portfolio of climate tech companies. Breakthrough’s fellowship program, which provides early-stage climate tech leaders with funding and assistance, will also remain intact, a spokesperson confirmed. They would not comment on whether this change will lead to layoffs at Breakthrough Energy.
“Breakthrough Energy made up a relatively small share — perhaps 1% — of climate philanthropy worldwide,” Brigham writes. “But what has made Breakthrough Energy distinctive is its support for policy and advocacy groups that promote a wide range of technological solutions, including nuclear energy and direct air capture, to fight climate change.”
Anti-wind activists have joined with well-connected figures in conservative legal and energy circles to privately lobby the Trump administration to undo permitting decisions by the National Oceanic and Atmospheric Administration, according to documents obtained by Heatmap’s Jael Holzman. Representatives of conservative think tanks and legal nonprofits — including the Caesar Rodney Institute, the Heartland Institute and Committee for a Constructive Tomorrow, or CFACT — sent a letter to Interior Secretary Doug Burgum dated February 11 requesting that the Trump administration “immediately revoke” letters from NOAA to 11 offshore wind projects authorizing “incidental takes,” a term of regulatory art referencing accidental and permissible deaths under federal endangered species and mammal protection laws. The letter also requested “an immediate cession of construction” at four offshore wind projects with federal approvals that have begun construction: Dominion Energy’s Coastal Virginia offshore wind project, Copenhagen Infrastructure Partners’ Vineyard Wind 1, and Ørsted’s Revolution Wind and Sunrise Wind projects.
“This letter represents a new stage of Trump’s war on offshore wind,” Holzman writes. “Yes, he has frozen leasing, along with most permitting activity and even public meetings related to pending projects. But the president's executive order targeting offshore wind opened the door to rescinding leases and previous permits. Doing so would produce new, costly legal battles for developers and for publicly-regulated utilities, ratepayers. Over the past few weeks, offshore wind developers with projects that got their permits under Biden have sought to reassure investors that at least they’ll be fine. If this new request is heeded, that calm will subside.”
Heavy downpours triggered flooding and debris flows across Los Angeles County yesterday. A portion of the Pacific Coast Highway, one of the most iconic roadways in America, is closed indefinitely due to mudslides near Malibu, an area devastated in last month’s fires. Duke’s Malibu, a famous oceanfront restaurant along the PCH, was inundated. The worst of the rain has passed now and many flood alerts have been canceled, but the cleanup has just begun.
Rain flows down a street outside a burned home.Mario Tama/Getty Images
Global electricity use is set to rise by 4% annually through 2027, “the equivalent of adding an amount greater than Japan’s annual electricity consumption every year,” according to the International Energy Agency’s new Electricity 2025 report. Here are some key points:
IEA
JPMorgan Chase clients have apparently been demanding more guidance about the climate crisis. As a result, the bank launched a new climate report authored by its global head of climate advisory, Sarah Kapnick, an atmospheric and oceanic scientist who was previously chief scientist at the National Oceanic and Atmospheric Administration. The report seeks to build what Kapnick is calling “climate intuition” – the ability to use science to assess and make strategic investment decisions about the shifting climate. “Success in the New Climate Era hinges on our ability to integrate climate considerations into daily decision-making,” Kapnick writes. “Those who adapt will lead, while others risk falling behind.” Here’s a snippet from the report, to give you a sense of the tone and takeaways:
“Adhering to temperatures below 1.5C will require emissions reductions. Depending on your definition of 1.5C, they may require historic annual reductions and potentially carbon removal. Conversely, if you have a technical or financial view that carbon dioxide removal will not scale, you should assume there is a difficult path to 1.5C (i.e. emissions reductions to zero depending on your definition in 6, 15, or 30+ years). If that is the case, you need to plan for the physical manifestations of climate change and social responses that will ensue if your investment horizons are longer.”
Greenhouse gas leaks from supermarket refrigerators are estimated to create as much pollution each year as burning more than 30 million tons of coal.
Grantees told Heatmap they were informed that Bill Gates’ climate funding organization would not renew its support.
Bill Gates’ climate tech advocacy organization has told its partners that it will slash its grantmaking budget this year, dealing a blow to climate-focused policy and advocacy groups that relied on the Microsoft founder, Heatmap has learned.
Breakthrough Energy, the umbrella organization for Gates’ various climate-focused programs, alerted many nonprofit grantees earlier this month that it would not be renewing its support for them. This pullback will not affect Breakthrough’s $3.5 billion climate-focused venture capital arm, Breakthrough Energy Ventures, which funds an extensive portfolio of climate tech companies. Breakthrough’s fellowship program, which provides early-stage climate tech leaders with funding and assistance, will also remain intact, a spokesperson confirmed. They would not comment on whether this change will lead to layoffs at Breakthrough Energy.
“Bill Gates and Breakthrough Energy remain as committed as ever to using our voice and resources to advocate for the energy innovations needed to address climate change,” the Breakthrough spokesperson told me in a written statement. “We continue to believe that innovation in energy is essential for achieving global climate goals and securing a prosperous, sustainable world for future generations.”
Gates founded Breakthrough Energy in 2015 to help develop and deploy technologies that would help the world reach net-zero emissions by 2050. The organization made more than $96 million in grants in 2023, the most recent year for which data is available.
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Among its beneficiaries was the Breakthrough Institute, a California-based think tank that promotes technological solutions to climate change. (Despite having a similar name, it is not affiliatedwith Breakthrough Energy.) Last week, a representative from Breakthrough Energy told the institute’s executive director, Ted Nordhaus, that its funding would not be renewed. The Breakthrough Institute had previously received a two-year grant of about $1.2 million per year, which wrapped up this month.
“What we were told is that they are ceasing all of their climate grantmaking — zeroed out immediately after the USAID shutdown because Bill wants to refocus all of his grantmaking efforts on global health,” Nordhaus told me on Monday, referring to the Trump administration’s efforts to defund the United States Agency for International Development. “But it’s very clear that this wasn’t brought on solely by USAID. I had heard from several people that there was a big reassessment going on for a couple of months.”
The Breakthrough spokesperson disputed this characterization, and denied that cutbacks were due to the USAID shutdown or a shift in funding from climate to global health initiatives. The spokesperson also told me that some grantmaking budget remains, though they would not reveal how much.
As for Breakthrough Institute, the funding cut will primarily impact its agricultural program, which received about 90% of its budget from Breakthrough Energy. Nordhaus is trying to figure out how to keep that program afloat, while the institute’s other three areas of policy focus — energy and climate, nuclear innovation, and energy and development — remain largely unaffected.
Multiple other organizations confirmed to Heatmap that they also will not receive future grants from Breakthrough Energy. A representative for the American Center for Life Cycle Assessment, a trade organization for sustainability professionals, told me that Breakthrough had recently informed the group that it would not renew a $400,000 grant, which is set to wrap up this May. (ACLCA’s spokesperson also noted that the grant had not come with any indication that it would be renewed.) Another former grantee told me that while their organization is currently wrapping up a grant with Breakthrough and does not have anything in the works with them for this year, they expected that future funding would be impacted, though they did not explain why.
Breakthrough Energy made up a relatively small share — perhaps 1% — of climate philanthropy worldwide. Foundations and individuals around the world gave a total of $9 billion to $15 billion to climate causes in 2023, according to an analysis from the Climateworks Foundation.
But what has made Breakthrough Energy distinctive is its support for policy and advocacy groups that promote a wide range of technological solutions, including nuclear energy and direct air capture, to fight climate change.
“Their presence will be missed,” said the CEO of another climate nonprofit who was notified by Breakthrough that its funding would not be renewed. Breakthrough Energy “was one of the few funders supporting pragmatic research and advocacy work that pushed at neglected areas such as the need for zero-carbon firm power and accelerated energy innovation,” they added.
"Even if it’s a drop in the bucket, it still makes a difference,” another former grantee with a particularly large budget told me. This organization recently sent Breakthrough an inquiry about partnering up again and is waiting to hear back. “But for small organizations, it’s make it or break it.”
Speculation abounds as to the rationale behind Breakthrough’s funding cuts. “I have heard that one of the reasons that Bill decided to stop funding climate was that he concluded that there was so much money in climate that his money really wasn’t that important,” Nordhaus told me. But that is not true when it comes to agriculture, he said, which comprises about 12% of global emissions. ”There’s very little money for advocating for agriculture innovation to address the climate impacts of the ag sector,” Nordhaus told me.
Gates, who privately donated to a nonprofit affiliated with the Harris campaign in 2024 but did not endorse the Democrat, dined with Trump and Susie Wiles, the White House chief of staff, for more than three hours at Mar-a-Lago around New Year’s Day, he told Wall Street Journal editor-in-chief Emma Tucker. He said that Trump was interested in the possibility of eradicating polio or developing an HIV vaccine. “I felt like he was energized and looking forward to helping to drive innovation,” he told her, days before the inauguration.
Since then, Trump’s war on USAID has frozen funding to a polio eradication program and shut down the phase 1 clinical trial of an HIV vaccine in South Africa, Kenya, and Uganda.