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“I was a little bit bearish on Tesla for this quarter — and I should’ve been darker.”
The electric vehicle market is anyone’s game.
That’s the takeaway from this year’s first tranche of EV sales data, which saw the two global market leaders — Tesla and BYD — turn in dismal sales for the first three months of the year. Those were in contrast to other automakers including Rivian, Hyundai, and Toyota, all of which reported healthier numbers.
Tesla’s deliveries, which Wall Street uses as a decent proxy for sales, came up well short of analysts’ expectations at 386,810 vehicles for the quarter — down about 9% from the first quarter of 2023. Analysts have consistently cut their estimates for this quarter’s deliveries over the past few weeks, but even so, the real numbers came in well below even the lowest expectations.
“I was a little bit bearish on Tesla for this quarter — and I should’ve been darker,” Corey Cantor, an EV analyst for BloombergNEF, a new-energy research firm, told me.
But despite those meager results, Tesla edged out BYD on sales for the quarter. The Chinese EV giant — whose new $9,000 Seagull hatchback has stunned Western automakers and triggered protectionist impulses around the world — reported far less stunning sales data. BYD sold 300,114 vehicles in the first three months of 2024, down 42% compared to a year before.
That means Tesla is once again the world’s No. 1 seller of electric vehicles, after ceding that title to BYD last year. But little else is going right for Elon Musk’s car company.
Tesla has an aging vehicle line-up, and its newest North American offering, the Cybertruck, has not impressed reviewers. By its own admission, the company is struggling to scale up the Cybertruck’s production as well.
Perhaps most worrying for Musk is that Tesla produced almost 47,000 more vehicles during the first quarter than it sold, suggesting that it is beginning to hit real limits on customer demand for its cars.
“There must be some kind of supply-demand imbalance here,” Cantor said. Tesla has slashed its vehicle prices by thousands of dollars over the past year in order to stimulate demand. Tesla doesn’t break out its sales data by region, which is a shame because that could help clarify what is going on. If Tesla’s sales are flagging in China and Europe, that could be because consumers are flocking to a new set of EV options. A sales decline in the U.S. would indicate that one of the company’s cash cows, the Model Y crossover, is beginning to falter.
“If you look at this, you can see where there are yellow flags here,” Cantor said. “Tesla can explain it however you want but the numbers speak for themselves. Anytime you’re down 9% year on year is a challenge.”
It’s harder to know how to read BYD’s fillip. Other Chinese automakers reported surging March sales. Xiaomi, a Chinese phone maker, has reported almost 90,000 preorders for its first-ever electric car, the SU7. Cantor speculated that the hiccup may be due to Lunar New Year, which tends to depress sales in January and February.
Elsewhere in the car market, other EV makers did better — although few reported surging sales. One exception was Hyundai, which reported EV sales up more than 60% from the first quarter of 2023.
General Motors’ electric vehicle sales fell 20.5% compared to the first quarter of 2023, even as the company’s overall sales of personal-use vehicles rose slightly. It reported higher sales for the Lyriq, its EV SUV, Cantor said.
Toyota says that it sold 206,850 “electrified” cars across North America in the first quarter, a gain of 74% over the year before. “Electrified,” however, is a Toyota term of art — it includes conventional hybrids, plug-in hybrids, and hydrogen fuel cell vehicles. About a third of Toyota’s North American sales now fall in this category.
The electric truck maker Rivian modestly surpassed expectations, beating both analysts’ and its own estimates with 13,588 deliveries in the first few months of 2024. While its total production of 13,980 vehicles for the quarter came in marginally below predictions, Rivian reaffirmed its earlier estimates for full-year production.
Even so, by late afternoon, Rivian’s stock was down 5% for the day. That might be partially explained by the planned weeks-long shutdown of its factory in Normal, Illinois, scheduled to begin at the end of this week. While the pause will allow for renovations designed to reduce costs and increase efficiency, it will also mean that next quarter is guaranteed to be a “wash” for Rivian, Cantor said.
As of last quarter, Rivian was losing about $43,000 on every vehicle it produced. Whether it can stem those losses and get on the “bridge to profitability” executives say is within sight remains, apparently, an open question for shareholders. Rivian is now focused on surviving long enough to sell the R2 SUV. “Every single thing we do within the business is focused on driving costs on this,” RJ Scaringe, Rivian’s CEO, told CNBC last month.
Tesla's and BYD’s flagging sales may also be signaling to investors that a general EV slowdown is coming. And then, of course, there's the general malaise that descended over the EV industry in 2023 as the big legacy American automakers reported sluggish sales for their splashy new electric models and planned to scale back production in the coming year. Though the data don’t present as clear a picture as the doomers might suggest, it is undeniable that, as Princeton energy systems professor and Shift Key podcast co-host Jesse Jenkins wrote for Heatmap, “the vibes are bad.”
“The narrative now will be harsh on Tesla and BYD,” Cantor said. “But if you’re another automaker, you should see this as an opportunity. We’re in the early stages here. None of this is written.”
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Elections inspire hyperbole. Every two years, we have “the most important election of our lifetime,” America’s future constantly “hangs in the balance,” and the stakes perennially “couldn’t be higher.”
But this year, some breathlessness does seem appropriate. 2024 marks the first presidential election since the January 6, 2021 insurrection attempt, which historians and constitutional scholars have described as the gravest threat to the peaceful transfer of power since the Civil War. No less existentially, tomorrow’s election will also have global consequences. Americans will either elect a leader who continues the build-out of renewable energy and prioritizes a healthy, clean environment, or they will elect a leader whose retrograde embrace of the fossil fuel industry would, in the space of one presidential term, “negate — twice over — all the savings from deploying wind, solar, and other clean technologies around the world over the past five years,” as Carbon Brief writes.
Make no mistake: Picking the next president of the United States is the single most important race of this election. However control of the U.S. House and Senate, which voters will also decide on Tuesday, will either help or hinder the next president’s agenda, whichever candidate takes the office. It’s not a coincidence that a number of those critical races involve candidates whose names will be familiar to the climate and energy world: Senator Jon Tester, a moderate Democrat in Montana who proved crucial in passing the Inflation Reduction Act, dreams of owning an electric tractor, and stands to lose to a Republican who’s vowed to fight the “climate cult”; outgoing Independent Senator Kyrsten Sinema, who helped shape the IRA but will either leave her seat to a Republican who claims not to “be afraid of the weather” or a Democrat who voted for the law that’s brought 18,000 new clean energy jobs to the state; Congressperson Yvette Herrell of New Mexico, who voted against the IRA while at the same time being one of the top recipients in the House of donations from the oil and gas industry. The list goes on and on.
Smaller local elections will be crucial, too. Democrats need a pickup in New York’s 4th Congressional District, just to the north of deep blue New York City, where Republican Representative Anthony D’Esposito is defending his seat with the help of Elon Musk’s super PAC; former Earth sciences teacher Tony Vargas, who believes Nebraska has a “moral obligation” to fight climate change, is attempting to unseat Republican Representative Don Bacon, a climate skeptic; and Montanans will elect their next attorney general, picking between the incumbent who leads the state’s case against the 16 young plaintiffs in Held v. Montana, and Democrat Ben Alke, who has extensive experience in environmental law. As Heatmap has covered, there are also several public utilities commission races, the results of which will have “an outsized influence on the country’s energy mix.”
In many places, climate will be on the ballot even more directly. In South Dakota, the debate over carbon capture and CO2 pipelines is being put in the hands of voters; in Berkeley, California, voters will decide if they want to incentivize the decarbonization of large buildings with a natural gas tax; and Washingtonians will have two different climate-related policies to defend, with repeal initiatives on the ballot thanks to a determined Republican millionaire.
Starting on Tuesday at 6 p.m., Heatmap will update a list of our most anticipated climate-related races — 36 in all — with live results as states and municipalities count the votes. For all the models, polls, and punditry, it’s still impossible to know what will happen on Tuesday; however, it’s no exaggeration to say we can be sure we’ll be living in a different country come January 20, 2025. We can endlessly speculate about how different it will be and what the climate and energy transition will look like in the years ahead. But only tomorrow knows.
Counties that veered from Obama in 2008 to Trump in 2016 are more likely to oppose renewables development.
In Texas, the Oak Run Solar Project would have been a slam dunk.
Developers would install 800 megawatts of solar panels — enough to power 800,000 homes — across nine square miles of unused land. It would devote some of its acreage to new farming practices that incorporate solar panels. And it would sell its electricity cheaply — and profitably — because it was near the state capital and because it could take advantage of a pre-existing onsite connection to the regional power grid.
But Oak Run wasn’t proposed in Texas. It was proposed in Ohio, and that means it has faced enormous opposition. Ohio has some of the country’s strictest restrictions on solar development, and 10 counties have blocked solar development outright.
Although Madison County, where Oak Run was proposed, is not one of them, the blowback to the project cost a local Republican county commissioner his job. Oak Run was eventually approved by the state’s power siting board earlier this year, but its opponents are now appealing that decision in the state’s Supreme Court.
Madison County, Ohio, also illustrates the political transformation that has revolutionized the upper Midwest. The predominantly rural county near the state’s capital, Columbus, has favored Republicans since the 1960s. But in recent decades it has swung hard to the right. In 2008, Barack Obama won nearly 40% of the county’s vote. Eight years later, Hillary Clinton picked up just 27%.
These two facts may seem like they have little to do with each other. But they point to one of the biggest trends in clean energy development across the country: The counties that voted for Barack Obama in 2008 and then Donald Trump in 2016 are some of the worst places in the country to permit and build renewable projects.
The size of a county’s swing from 2008 to 2016 is one of the biggest predictors of whether a proposed wind or solar project will be contested or blocked, according to a new Heatmap Pro analysis of more than 8,500 projects and local policies around the country.
The magnitude of that swing is by far the most important political variable to emerge from Heatmap Pro’s analysis of more than 60 risk factors influencing community support or opposition to renewable projects. It is more strongly associated with a given project’s success than whether a county votes for Democratic or Republican candidates overall.
The only variables that are more closely correlated than the 2008-to-2016 swing are fundamental measures of a region’s population or local economy, such as its median income, racial demographics, or dominant industries. Towns and regions that heavily depend on farming, for instance, have become particularly reluctant to accept new solar projects in recent years.
Heatmap Pro’s analysis focused not only on whether a county’s residents support wind or solar projects in theory, but also on whether renewable projects proposed in the area are canceled, contested, or exposed to political turbulence. It surveyed more than 7,000 wind and solar projects proposed and built across the United States since the 1990s.
Many of the counties with the largest Obama-to-Trump swings have passed proposals meant to limit renewable development. Vermillion County in Indiana — where more than a quarter of voters swung from Obama to Trump — has an extensive set of restrictions on new solar projects. Solar projects in Elk County, Pennsylvania, which saw a similar swing, have also turned out against solar projects using up “prime farmland.”
There are a few reasons why the Obama-to-Trump swing might be associated with more opposition to renewables.
In 2008, solar and wind were still frontier technologies and were not price-competitive with fossil fuels. Although vaguely associated with Democrats, politicians on both sides of the aisles championed wind and solar so as to wean the country off foreign oil.
But in the following decade, the U.S. increased its solar capacity by roughly 100-fold, while it has more than doubled its installed wind capacity.. Today, solar and wind energy are major features of the electricity system, and many Republicans have openly embraced fossil fuels and cast doubt on the value of cleaner alternatives.
To be sure, the Obama-to-Trump swing was influenced by other social and economic factors, as well as a state’s specific political environment. Leah Stokes, a UC Santa Barbara political scientist who has studied the growing local opposition to wind farms, told me that the correlation with Obama-Trump voters may originate from Trump’s dominance of the upper Midwest in 2016. Because a small group of anti-renewable advocates can change an entire region’s policies, that could lead to more opposition to renewables in one part of the country or another.
“Is there a person, or a network of people, who are going place by place pushing these anti-solar and wind local laws? That would lead to a geographic concentration,” she said.
Even within individual counties, the electorate wasn’t the same in 2016 as it was in 2008. Throughout the 2010s, tens of millions of Americans moved around the country, with the largest net change moving from the Northeast to the South. Cities became younger on average, while rural areas and suburbs became older.
Even within counties, a different set of voters showed up to the polls in each election. One reason why the 2012 election might not be correlated with opposition to renewables is that many voters who voted for Obama in 2008 skipped the next cycle. Those same voters — many of whom were white and working class — showed back up in 2016 and backed Trump.
What is driving the opposition to renewables? Perhaps a county’s swing against renewable energy is happening precisely because voters there are persuadable. From 2008 to 2016, many voters in these counties changed their minds about which candidate or political party to support. As they shifted their stance to the right, they also adopted more seemingly Republican views about wind and solar development. Donald Trump has distinguished himself by his embrace of fossil fuels and climate change skepticism — perhaps as voters come to support him, they also adopt his positions.
What’s interesting, however, is that deep red counties that have not seen a political shift — places that backed, say, McCain and Romney by roughly the same margin as they backed Trump in 2016 — continue to build wind and solar at a good clip. Texas, for instance, is the No. 1 state for renewable deployment. A county’s partisanship, in other words, is not as good a predictor of its opposition to renewables as its swinginess.
Edgar Virguez, an energy systems engineer at the Carnegie Institution for Science at Stanford University, has studied what drives opposition to renewables in North Carolina. He told me that some of the same factors that predict a county’s Trump support — such as its population density and education level — also predict whether that county has enacted a local restriction on renewable energy.
When he and his colleagues studied local policies in North Carolina, they found that lower density and less educated counties “had significantly higher reductions in the land available for solar development” when compared with denser or more educated counties, he said. Once a county has fewer than 35 people per square mile, or when less than 20% of the population has a bachelor’s degree, the number of restrictions on local land use shot up. That’s a problem for decarbonization, he added, because less dense counties also usually have the best and most affordable land available for solar development.
That finding may not hold true in other states. Heatmap, for instance, has found that whiter and more educated counties are more likely to oppose renewables. And to some degree, less dense counties are exactly where you’d expect to see more solar and wind projects get built — and thus more local policies restricting them pop up. But it is nonetheless not great news for advocates, given that a couple of America’s political institutions — namely, the Senate and the Electoral College — favor rural voters or Midwestern states. If the trend takes root, then it could eventually curtail renewable development across the country. That question — and many others — will partly be decided in this week’s presidential election.
On dry conditions in the Big Apple, biodiversity goals, and the future of the IRA
Current conditions: Schools are closed this week in Lahore, Pakistan, due to unprecedented pollution • An extreme red alert for torrential rain has been issued in Barcelona • A storm system in the Caribbean could strengthen into a hurricane by Wednesday.
The COP16 biodiversity summit in Colombia came to a disappointing close over the weekend, with negotiators failing to agree on how the world can monitor and fund nature restoration. There were high hopes that the meeting would produce a roadmap for protecting large swathes of land, water, and degraded ecosystems by 2030, but rich nations blocked a proposal for a new fund to help pay for poorer nations’ efforts. “This COP was meant to be a status check on countries’ progress toward saving nature and all indicators on that status are blinking red,” said Crystal Davis, the World Resources Institute’s global director of food, land, and water. There were some bright spots, though, including the creation of a subsidiary body that will ensure Indigenous peoples have a seat at the negotiating table in future UN conservation talks, and a plan to encourage corporations that derive biotechnology products from nature to pay into a conservation fund.
New Yorkers are being asked to conserve water after Mayor Eric Adams placed the city under a drought watch. Last month was the driest NYC October on record, The Washington Postreported. Just 0.01 inches of rain fell in Central Park, far short of the 4 inches or so that usually fall during the month. Residents have been told to take shorter showers and fix leaks, and Adams called on the city’s agencies to draw up plans to conserve water. “Mother Nature is in charge, and so we must make sure we adjust,” he said. More than half the country was under drought conditions last month.
In case you missed it: Regulators from the Federal Energy Regulatory Commission on Friday rejected a proposal to increase the load capacity of Talen Energy’s Susquehanna nuclear facility in Pennsylvania. The proposal was part of a deal to supply more power to a nearby Amazon data center. FERC voted 2-1 to block the move, citing concerns about grid reliability and rising energy bills for the public. FERC Chairman Willie Phillips dissented, and said the decision “fails to recognize the creative approach the agreement took and fails to demonstrate flexibility to ensure the grid can reliably and affordably handle rising demand.”
The CEO of oil giant TotalEnergies called for Republican presidential candidate Donald Trump to keep existing environmental laws in place if he wins this week’s election. Patrick Pouyanné told the Financial Times that revoking climate rules enacted under President Biden would create a “wild west” situation and hurt the oil industry’s reputation. “My view is that this will not help the industry, but on the contrary it will demonize, and then the dialogue will be even more antagonized,” Pouyanné said. Trump has promised to rescind much of the Inflation Reduction Act funding. Exxon’s chief financial officer Kathy Mikells told the FT that the IRA is helping support the economy, and “that gives a lot of people a lot of incentive to stand behind the IRA.”
Canada, the fourth-largest oil producer in the world, will publish a proposal today to cap greenhouse gas emissions from fossil fuel energy production. Energy is Canada’s highest-polluting sector, with oil and gas accounting for a quarter of all emissions and producing “more than double the greenhouse gas pollution than all other industries combined,” according to Hermine Landry, a spokeswoman for Environment Minister Steven Guilbeault. Landry toldReuters that the cap-and-trade system would incentivize high-emitting companies to invest in projects that reduce pollution, though an earlier report from Deloitte said the cap would likely nudge companies to cut production. Canada has a goal of curbing emissions by at least 40% compared to 2005 levels by the end of the decade. Whether this new proposal comes into effect will depend largely on the outcome of the next election, set to be held in late 2025.
“This car makes the kind of sound that you would expect to hear when an omniscient, all-powerful alien force swoops through the clouds in a sci-fi movie, the gut-shaking tone backing the moment when everyone realizes that humanity is about to get served.” –Tim Stevens at The Vergetries to describe the digital acceleration tone produced by Rolls-Royce’s first EV, the ultra-luxury Spectre, which starts at $420,000.
Rolls-Royce