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Electric Vehicles

Why Rivian’s Stock Is Up

On EV growth, battery prices, and Arctic drilling

Why Rivian’s Stock Is Up
Heatmap Illustration/Getty Images

Current conditions: A severe heat wave warning is in place for large parts of Australia’s Queensland state, where “unsettling” thunderstorms are expected • A bitter Arctic blast is heading for the Upper Midwest • An explosive wildfire is raging in Malibu, California, where at least 6,000 people have been told to evacuate immediately.

THE TOP FIVE

1. Microsoft unveils new data center design for reduced water use

Microsoft yesterday unveiled a new design for data centers that reduces water use. The design “optimizes AI workloads and consumes zero water for cooling,” saving an estimated 125 million liters of water per year per data center. It does this by recycling water through a closed loop system, moving it between the servers and the water chillers. All new Microsoft data center designs will now be based on this cooling technology, and some pilots will come online in 2026.

Microsoft

2. Biden finalizes Arctic drilling lease sale

The Biden administration confirmed its plans to hold an oil and gas drilling lease sale in the Arctic National Wildlife Refuge starting on January 9. The amount of land up for auction – some 400,000 acres – is the minimum required by law. The move seems to have angered people on all sides, for many different reasons. Environmentalists will remember that Biden campaigned on a promise to stop drilling in the ANWR. “The Arctic Refuge deserves to remain a place of refuge, not an industrial oilfield lining the pockets of big oil executives,” Kristen Miller, executive director of Alaska Wilderness League, said in a statement. Some Indigenous groups, however, want even more land included in the sale to maximize local economic benefits.

3. Report: Battery pack prices plummeted in 2024

Lithium-ion battery pack prices dropped 20% this year, the biggest decline since 2017, according to BloombergNEF’s annual battery price survey, out today. It cites “significant overcapacity” as the main reason for the price change. Manufacturers expanded production in anticipation of a surge in EV sales that has been slow to materialize, and are now trying to sell off stock. Battery EV pack prices dropped by 27% this year, dropping below $100 per kilowatt-hour for the first time ever. This price point is “an oft-cited rule of thumb for where EVs reach price parity with internal combustion engine vehicles (ICEs),” the report adds. This will be hastened by increased production of cheaper batteries outside of China.

BloombergNEF

4. ‘Massive market opportunity’ projected for Rivian

And sticking with EVs for a moment, Rivian’s stock got a nice boost after Benchmark Securities gave it a “buy” rating and projected a “massive market opportunity.” “We believe Rivian’s capability to manufacture EV’s domestically with in-house designed software has been validated through its partnerships with Amazon and Volkswagen,” wrote analyst Mickey Legg. “VW’s industry relationships and experience will help [Rivian] negotiate with suppliers and provide engineering synergies.” Rivian shares were up 11% in pre-market trading.

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  • 5. EU scientists call for solar geoengineering ban

    Scientists are urging the European Union to ban solar geoengineering methods such as injecting aerosols into the stratosphere, cloud brightening/altering, and space mirrors. “The benefits and risks of these solar radiation modification technologies are highly uncertain,” the European Commission’s chief scientific advisers wrote, warning these activities could “bring substantial negative ecological and economic effects.” Instead, the group suggested prioritizing reducing greenhouse gas emissions as the “main solution to avoid dangerous levels of climate change.” It also called for implementing new rules that govern this practice worldwide.

    THE KICKER

    The EPA has officially banned the use of trichloroethylene (TCE) and perchloroethylene (Perc), two common solvents known to cause cancer and other health problems.

    Yellow

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    A destroyed house and a blueprint.
    Heatmap Illustration/Getty Images

    Recovering from the Los Angeles wildfires will be expensive. Really expensive. Insurance analysts and banks have already produced a wide range of estimates of both what insurance companies will pay out and overall economic loss. AccuWeatherhas put out an eye-catching preliminary figure of $52 billion to $57 billion for economic losses, with the service’s chief meteorologist saying that the fires have the potential to “become the worst wildfire in modern California history based on the number of structures burned and economic loss.” On Thursday, J.P. Morgan doubled its previous estimate for insured losses to $20 billion, with an economic loss figure of $50 billion — about the gross domestic product of the country of Jordan.

    The startlingly high loss figures from a fire that has only lasted a few days and is (relatively) limited in scope show just how distinctly devastating an urban fire can be. Enormous wildfires thatcover millions of acres like the 2023 Canadian wildfires can spew ash and particulate matter all over the globe and burn for months, darkening skies and clogging airways in other countries. And smaller — and far deadlier fires — than those still do not produce the same financial roll.

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    Firefighters on Sunset Boulevard.
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    A fire needs three things to burn: heat, fuel, and oxygen. The first is important: At some point this week, for a reason we have yet to discover and may never will, a piece of flammable material in Los Angeles County got hot enough to ignite. The last is essential: The resulting fires, which have now burned nearly 29,000 acres, are fanned by exceptionally powerful and dry Santa Ana winds.

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