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Elon Musk tried to soften the blow.
On a call with investors last week, the Tesla chief warned of a “gap year” for the company. Its tremendous sales driven by the Model Y crossover would slow, while Tesla’s promised next wave of success was at least a year away. That phase would be powered by “Project Redwood,” a new platform on which Tesla would build a new, smaller crossover starting in the middle of 2025.
It can’t come soon enough. Despite the company’s waning market dominance, it’s still true that as Tesla goes, so goes the EV industry — and frankly, the entire industry feels like it’s entering a gap stage.
Perhaps you’ve heard that the EV vibes are bad. Over the past several months, publications have reported that the world is entering an EV slowdown, and executives like General Motors CEO Mary Barra have given interviews warning of some EV winter. The emerging narrative is that buyer demand for electric is weakening, and that just maybe the automakers got ahead of themselves by racing to electrify their lineups. But as Heatmap showed, that notion is not quite correct.
There is worrying data, yes. Truck buyers, for example, may not have the appetite for electric Ford F-150s and Chevy Silverados to support a mass transition, at least not yet. Lagging charging infrastructure in many parts of the country certainly makes some potential buyers skittish. Yet the traditional automakers’ electric woes arise from more banal concerns, such as rising interest rates dinging all auto sales, and especially Musk’s big price war. Tesla slashed its prices multiple times in 2023, forcing the likes of Ford to do the same and lose money on its Mach-E electric crossover, for example.
The numbers don’t support the case that consumer EV demand has fallen off a cliff. Instead, it looks more like this particular stage of EV development is coming to an end while the next one isn’t quite ready to begin.
Just look at the electric vehicles on offer. Of the best-selling EVs in America that aren’t Teslas, most fit the mold of the industry-leading Model Y, a sleek crossover with about 300 miles of range, with a price tag in the neighborhood of $40,000. The Kia EV6, Hyundai Ioniq5, Volkswagen ID.4, and Ford Mustang Mach-E landed in the top 10 by following this pattern.
Heatmap’s Robinson Meyer has noted that Hyundai and Kia, in particular, have cracked the code of this particular EV moment by offering several varieties of electric (and plug-in electric hybrid) crossover and SUVs in this price range to meet America’s endless appetite for them. Seen in this light, Ford and GM’s struggles are less about waning consumer demand for electrics and more about the fact that Ford didn’t follow up the Mustang Mach-E by flooding the zone with EV versions of the Edge, Explorer, and Escape.
As EVs continue to improve, Meyer noted, more people will go electric not out of environmental concern or because of price shopping, but simply because EVs will be better cars than their combustion counterparts, cold stop. Yet there is another inescapable fact: No matter how long monthly payment plans get, not everybody can afford a $40,000 car, electric or otherwise. (The shifting nature of federal tax credits doesn’t help, nor does the tendency of the dealership system to slap on thousands of dollars of bogus fees on top of the MSRP.)
The next phase of electrification is the true entry-level EV. Price is the killer app, and nothing would reinvigorate EV demand in America like the realization of Musk’s long-teased dream — a $25,000 vehicle that could compete with compact cars like the Honda Civic and Mazda3, or even a $30,000 compact SUV that would go up against the Toyota RAV4s and Honda CR-Vs that patrol American suburbs.
This is, of course, maddeningly difficult to accomplish given battery economics and the tremendous costs involved in designing and manufacturing new vehicles. Tesla’s plan hinges on its “unboxed” manufacturing process that would slash the time its Gigafactories require to build a new vehicle, thus making it more profitable to sell a higher volume of cheaper cars.
As I’ve argued, Tesla could have been further along in this quest if it hadn’t wasted so much time and attention on Musk’s pet distraction, the Cybertruck. Indeed, the company’s future rests not in a stainless steel lightning rod, but in the more boring reality of selling cars to Americans that Hyundai and Kia have already figured out. Just give us various sizes of not-that-different crossovers, and try to keep the price down if you can.
Thanks to the Cybertruck distraction, and Musk’s adoration of the whooshing sound deadlines make as they fly by, it will be some time before Tesla’s car of the future can hit the road. It won’t doom the company — Musk has delivered bad news during earnings calls before that tanked Tesla’s stock price, but only temporarily. And when “Redwood” finally arrives (along with the return of the much-beloved and affordable Chevy Bolt), Tesla may yet again pull the industry along with it.
If that means the start of a new phase, in which most Americans can actually afford an EV, then it’ll be worth the delay.
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How the Migratory Bird Treaty Act could become the administration’s ultimate weapon against wind farms.
The Trump administration has quietly opened the door to strictly enforcing a migratory bird protection law in a way that could cast a legal cloud over wind farms across the country.
As I’ve chronicled for Heatmap, the Interior Department over the past month expanded its ongoing investigation of the wind industry’s wildlife impacts to go after turbines for killing imperiled bald and golden eagles, sending voluminous records requests to developers. We’ve discussed here how avian conservation activists and even some former government wildlife staff are reporting spikes in golden eagle mortality in areas with operating wind projects. Whether these eagle deaths were allowable under the law – the Bald and Golden Eagle Protection Act – is going to wind up being a question for regulators and courts if Interior progresses further against specific facilities. Irrespective of what one thinks about the merits of wind energy, it’s extremely likely that a federal government already hostile to wind power will use the law to apply even more pressure on developers.
What’s received less attention than the eagles is that Trump’s team signaled it could go even further by using the Migratory Bird Treaty Act, a separate statute intended to support bird species flying south through the U.S. from Canada during typical seasonal migration periods. At the bottom of an Interior press release published in late July, the department admitted it was beginning a “careful review of avian mortality rates associated with the development of wind energy projects located in migratory flight paths,” and would determine whether migratory birds dying because of wind farms qualified as “‘incidental’ takings” – harm or death – under the Migratory Bird Treaty Act.
While not stated explicitly, what this means is that the department appears to be considering whether to redefine these deaths as intentional under the Migratory Bird Treaty Act, according to Ben Cowan, a lawyer with the law firm Troutman Pepper Locke.
I reached out to Cowan after the eagle investigation began because his law firm posted a bulletin warning that developers “holding active eagle permits” might want to prepare for “subpoenas that may be forthcoming.” During our chat earlier this month, he told me that the eagle probe is likely going to strain financing for projects even on private lands that wouldn’t require any other forms of federal sign-off: “Folks don’t want to operate if they feel there’s a significant risk they might take an eagle without authorization.”
Cowan then voiced increasing concern about the migratory bird effort, however, because the law on this matter could be a quite powerful – if legally questionable – weapon against wind development.
Unlike the Endangered Species Act or the eagle protection law, there is currently no program on the books for a wind project developer to even obtain a permit for incidental impacts to a migratory bird. Part of the reason for the absence of such a program is the usual federal bureaucratic struggle that comes with implementing a complex statute, with the added effect of the ping-pong of federal control; the Biden administration started a process for permitting “incidental” impacts, but it was scrapped in April by the Trump team. Most protection of migratory birds under the law today comes from voluntary measures conducted by private companies and nonprofits in consultation with the federal government.
Hypothetically, hurting a migratory bird should be legally permissible to the federal government. That’s because the administration loosened implementation of the law earlier this year with an Interior Department legal opinion that stated the agency would only go after harm that was “intentional” – a term of art under the statute.
This is precisely why Cowan is fretting about migratory birds, however. Asked why the wind industry hasn’t publicly voiced more anxiety about this potential move, he said industry insiders genuinely hope this is “bluster” because such a selective use of this law “would be so beyond the pale.”
“It’s basically saying the purpose of a wind farm is to kill migratory birds, which is very clearly not the case – it’s to generate renewable electricity,” Cowan told me, adding that any effort by the Interior Department would inevitably result in lawsuits. “I mean, look at what this interpretation would mean: To classify it as intentional take would say the purpose of operating a wind farm would be to kill a bird. It’s obviously not. But this seems to be a way this administration is contemplating using the MBTA to block the operation of wind farms.”
It’s worth acknowledging just how bonkers this notion is on first blush. Is the federal government actually going to decide that any operating wind farm could be illegal? That would put entire states’ power supplies – including GOP-heavy states like Iowa – in total jeopardy. Not to mention it would be harmful overall to take operating capacity offline in any fashion at a moment when energy demand is spiking because of data centers and artificial intelligence. Even I, someone who has broken quite a few eye-popping stories about Trump’s war on renewables, struggle to process the idea of the government truly going there on the MBTA.
And yet, a door to this activity is now open, like a cleaver hanging over the industry’s head.
I asked the Interior Department to clarify its timeline for the MBTA review. It declined to comment on the matter. I would note that in mid-August, the Trump administration began maintenance on a federal dashboard for tracking regulations such as these and hasn’t updated it since. So we’ll have to wait for nothing less than their word to know what direction this is going in.
And more on the week’s most important conflicts around renewable energy projects.
1. Santa Fe County, New Mexico – County commissioners approved the controversial AES Rancho Viejo solar project after months of local debate, which was rendered more intense by battery fire concerns.
2. Nantucket, Massachusetts – The latest episode of the Vineyard Wind debacle has dropped, and it appears the offshore wind project’s team is now playing ball with the vacation town.
3. Klickitat County, Washington – Washington Gov. Bob Ferguson is pausing permitting on Cypress Creek Renewables’ Carriger solar project despite a recommendation from his own permitting council, citing concerns from tribes that have dogged other renewables projects in the state.
4. Tippecanoe County, Indiana – The county rejected what is believed to have been its first utility-scale solar project, flying in the face of its zoning staff.
5. Morrow County, Oregon – This county is opting into a new state program that purports to allow counties more input in how they review utility-scale solar projects.
6. Ocean County, New Jersey – The Jersey shoreline might not get a wind farm any time soon, but now that angst is spreading to battery storage.
7. Fairfield County, Ohio – Hey, at least another solar farm is getting permitted in Ohio.
Talking NEPA implementation and permitting reform with Pamela Goodwin, an environmental lawyer at Saul Ewing LLP.
This week’s conversation is with Pamela Goodwin, an environmental lawyer with Saul Ewing LLP. I reached out to her to chat about permitting because, well, when is that not on all of our minds these days. I was curious, though, whether Trump’s reforms to National Environmental Policy Act regulations and recent court rulings on the law’s implementation would help renewables in any way, given how much attention has been paid to “permitting reform” over the years. To my surprise, there are some silver linings here – though you’ll have to squint to see them.
The following chat was lightly edited for clarity.
So walk me through how you see the Trump administration handling renewable energy projects right now under NEPA.
In general, the federal government has been much more reluctant to the timely issue of permits in contrast to what we might be seeing on the more traditional side of things.
But that’s separate from NEPA — it relates to public notice and comments and the opportunity for third parties to get involved, ensuring any decision-making on the government side is done in a way that’s evocative of a fair system. On the NEPA side, I don’t know if they’re going to treat renewables any differently than they’re going to treat other sorts of projects. That’s different, from a policy perspective, [from] how they’re handling the permits.
If, from a policy perspective, the federal government is less inclined to make a determination about a particular project — or if it decides that it doesn’t like wind, for example, and isn’t going to issue a permit — that’s different than the procedural elements associated with a NEPA review.
The Supreme Court recently ruled in the Seven County case that agencies can be granted a lot of deference in their reviews under NEPA, seeing it more as a procedural statute than a substantive roadblock. What will this lead to?
I think that what we’re seeing – and every agency’s different – but what the court said is that lower courts should defer to the agency to establish their own protocols under NEPA. They’ve begun to streamline the process by which they issue permits, issue notices of those permits, and give people the opportunity to comment on them.
What we’re anticipating will happen if the court gets its wishes – and candidly, I think this is a good thing for developers, on both the renewables and non-renewables side – is that we’ll see more expeditious permitting from the federal government.
You may not like the determinations. There’s a possibility that certain permits are denied if the nature of the permit is in conflict with the federal government’s policy and intention. But you’ll get a quicker decision than you used to get. And if there’s a will to issue a permit, you’ll get it faster.
We’ve heard the concept of permitting reform or NEPA reform as a leveling of the playing field, but in this environment, it is not entirely clear that’ll be the case. Where does the battleground turn then for those who get, as you put it, rejections faster?
That’s a great question. Regrettably, the immediate battleground is the courts. There is certainly a right and an opportunity for anybody who feels a determination was incorrect to challenge that, and to challenge the particular agency’s implementation of NEPA.
Okay, but what’s the remedy here if renewables companies are just getting rejections faster from the Trump team?
Without a real-world example, it’s hard to give you legal theories, but they will always exist. It’ll be circumstantial, and good lawyers always come up with good arguments. I don’t think this issue is fully resolved, either. The Supreme Court has done a favor to everybody by at least defining the issue, but now we’ll have to see what happens as agencies make these kinds of determinations.