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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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On Japan’s atomic ‘Iron Lady,’ Electra’s supercharge, and a mineral deal Down Under
Current conditions: Tropical Storm Melissa is barreling toward Haiti and Jamaica carrying a payload of as much as 16 inches of rain for certain parts of the Caribbean • A coldfront is set to drop temperatures by as much as 15 degrees Fahrenheit over the Great Lakes states • Temperatures in the French overseas territory of Juan de Nova hit nearly 94 degrees Tuesday, the hottest October day in the history of the French Southern Territories.
US Wind told a federal court that it will go bankrupt if President Donald Trump succeeds in revoking its building permits. The Baltimore-based developer testified on the fate of its 2.2-gigawatt Maryland Offshore Wind project in response to a lawsuit brought by the Department of the Interior and the City Council of Ocean City, Maryland. “If the plan is lost, surrendered, forfeited, revoked or otherwise not maintained in full force and effect, US Wind’s investors have the right to declare US Wind to be in default on the repayment of the company’s debt and/or refuse to extend the additional financing needed to complete construction of the project,” the company told the court, according to an update on the energy consultancy TGS’ 4C Offshore news website. “Either of these consequences could result in US Wind’s bankruptcy.”
The Trump administration’s “total war on wind,” as Heatmap’s Jael Holzman described the multi-agency onslaught against offshore projects, has drawn a backlash in recent months. As I reported last month in this newsletter, a federal judge temporarily stayed Trump’s stop-work order on a 80% complete wind farm off Rhode Island’s coast. Even the oil industry has come out to support the wind sector, as I wrote earlier this month, with Shell’s top U.S. executive warning that the precedent the administration had set would harm fossil fuel producers once Democrats return to power. Yet the effects of the administration’s policies are starting to pinch.
Electra announced a series of major deals on Tuesday as the green iron startup unveiled its debut demonstration facility in Boulder, Colorado. Just a month after Microsoft agreed to buy green steel for its data centers from Sweden’s green steelmaker Stegra, Facebook owner Meta agreed to buy environmental attribute credits linked to emissions cut from Electra’s clean iron. The startup also announced three major offtake agreements — the steelmaker Nucor, the European metal trader Edelstahl Group, and Japanese steel-trading giant Toyota Tsusho all signed deals for Electra’s iron. Meanwhile, Electra brought on new financing. Bill Gates’ Breakthrough Energy invested $50 million in grants into the company, while Colorado Governor Jared Polis provided the five-year-old startups with an $8 million tax credit from the state’s clean industrial financing program. And all that is just what the company announced Tuesday. Earlier this year, as Heatmap’s Katie Brigham reported, Electra closed a $186 million Series B round.
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The top U.S. solar trade group, the Solar Energy Industries Association, is looking for a new leader. After eight years in office, Abigail Ross Hopper, the lobby organization’s chief executive, announced her departure Tuesday amid what she called a “challenging” year for the industry in her public exit letter. When she took office in 2017, the solar industry had a total capacity of 36 gigawatts and just over 1 million residential customers. By today, the industry has grown to more than 255 gigawatts and more than 5.5 million residential customers. Despite struggles competing against China, U.S. solar manufacturing capacity vaulted from 14th globally to the world’s third-largest hub of photovoltaic factories. “The growth we’ve experienced over the years is a result of our collective grit and determination,” she wrote in the letter. “We’ve navigated fierce policy battles and market challenges, from trade cases to tax debates, and yet we’ve always emerged stronger. We fought — and won — historic policy battles, at every level of government.” While the Trump administration’s cuts to solar programs have dulled growth forecasts, she said she was “optimistic” about the future. Her last day will be January 30, 2026.
Australian Prime Minister Anthony Albanese and President Trump.Anna Moneymaker/Getty Images
After months of negotiations, the U.S. and Australia signed onto a two-way trade deal on critical minerals worth $8.5 billion. The move comes as China ratchets up export controls on rare earths and other metals over which Beijing dominates global supplies. Australia and Canada, whose economies heavily depend on mining, are widely considered the most dependable sources of minerals for the U.S., a dynamic highlighted last week by the cancellation of an American metal project by the leaders of a coup in Madagascar, as I reported for Heatmap. For Australia, the agreement “is a really significant deal,” Hayley Channer, the director of the economic security program at the United States Studies Centre at the University of Sydney, told The Guardian. “I’m surprised how good it is. The fact that any U.S. money is coming to Australian companies is huge; we really need this money. I don’t think it could have gone any better.”
Japan just elected its first female prime minister, the arch-conservative former minister of economic security Sanae Takaichi. Like Margaret Thatcher, the first woman to serve as British prime minister, Takaichi has been dubbed the Iron Lady due to her hard-line nationalistic views. But uranium may be a better metal for the nickname. Like Thatcher, Takaichi has vowed to restore Japan’s nuclear industry to its former might. Less than half of Japan’s 33 operable nuclear reactors are currently online and generating electricity, a legacy of the mass shutdown that followed the 2011 Fukushima-Daiichi plant. In lieu of atomic energy, Japan — which lacks the land for vast wind and solar installations — has turned instead to costly liquified natural gas imports. To Takaichi, who wants to remilitarize Japan and take a more aggressive stance toward China, this creates a vulnerability. Without domestic gas fields, Japan relies on imports whose routes the Chinese navy could disrupt in a conflict, weaponizing blackouts in much the same way Russia has in Ukraine. Japan’s offshore wind efforts are badly delayed. And Takaichi has warned that Beijing’s grip over global manufacturing of photovoltaic panels makes solar a threat, as well.
Japan isn’t the only country looking to revive its past atomic ambitions. South Africa’s government approved the state-owned utility Eskom’s integrated resource plan last week, which included starting work again on the company’s abandoned pebble-bed modular reactor program. First proposed in 1999, the technology is billed as safer than light water reactors and more versatile, with the potential for use in more heavy industry settings. But South Africa canceled the program in 2010 after spending $980 million developing the reactor. The country currently depends on coal for nearly 60% of its electricity.
Scientists discovered an ancient climate archive in a remote cave in northern Greenland. In a study published in Nature Geoscience, the researchers found calcite deposits that only form when the ground is unfrozen and water flows. The findings cast new light on past warm periods in the Earth’s climate, particularly the Late Miocene, which began about 11 million years ago. “These deposits are like tiny time capsules,” Gina Moseley, a geologist with the University of Innsbruck in Austria and an author of the study, said in a press release. “They show that northern Greenland was once free of permafrost and much wetter than it is today.”
Rob and Jesse hang with Dig Energy co-founder and CEO Dulcie Madden.
Simply operating America’s buildings uses more than a third of the country’s energy. A major chunk of that is temperature control — keeping the indoors cool in the summer and warm in the winter. Heating eats into families’ budgets and burns a tremendous amount of fuel oil and natural gas. But what if we could heat and cool buildings more efficiently, cleanly, and cheaply?
On this week’s episode of Shift Key, Rob and Jesse talk to Dulcie Madden, the founder and CEO of Dig Energy, a New Hampshire-based startup that is trying to lower the cost of digging geothermal wells scaled to serve a single structure. Dig makes small rigs that can drill boreholes for ground source heat pumps — a technology that uses the bedrock’s ambient temperature to heat and cool homes and businesses while requiring unbelievably low amounts of energy. Once groundsource wells get built, they consume far less energy than gas furnaces, air conditioners, or even air-dependent heat pumps.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University. Jesse is an adviser to Dig Energy.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Jesse Jenkins: We’ve been throwing a few different terms around here to describe this. We talked about geothermal heating and cooling, ground source heat pumps, geoexchange. There’s a little bit of ambiguity here in the language people used to talk about these things. What’s your favorite way to talk about this product and why?
Dulcie Madden: Ugh.
Jenkins: Or is this just an endless debate that is not resolved?
Madden: It is a great question. It’s a big debate. When I think of geoexchange, just so everyone knows, it’s really about, like, are you able to basically create a larger array, potentially, across buildings, more like exchanging heating and cooling, like both point source and — I think about it more in the context of Princeton, where it’s also across buildings, right? And that starts to move into what some people call a thermal energy network. And so there’s some work there.
There is a lot of back and forth between geothermal heat pump and ground source heat pump, and a lot of people will use them interchangeably. I think that there is technically a differentiation, but I don’t know if there’s a didactic, like, This is what it is. It’s just … you have to be interchangeable.
Jenkins: Yeah, I’m curious, I don’t know what the best marketing term is, what people actually resonate with beyond the technical crowd. I was describing what you guys were doing when you closed your seed series round on X or BlueSky, and somebody jumped into the replies. That’s not geothermal energy, it’s ground source heat pump. And it’s like, okay. And I guess the argument is that, because it’s basically just using it as a source for heat exchange in the heat pump operation as opposed to extracting heating out of the ground — which you can do. I mean, you can just do direct heating from geothermal.
Madden: Right.
Jenkins: Deep geothermal drilling, as well. It’s something that Eavor, which is an Alberta-based deep geothermal company that I advise, as well, is working on their first commercial project in Bavaria. That’s gonna go into a district heating system. So they’re going produce a little bit of power, but a lot of that is just direct heat. But again, they’re drilling, five, six kilometers deep and pulling out heat at high temperatures. And so it’s because it’s kind of back and forth, you’re using this kind of buffer for both heating and cooling. I think that’s why people might push back on the idea that it’s geothermal. But you’re using the heat in the ground.
Mentioned:
TechCrunch: “Geothermal is too expensive, but Dig Energy’s impossibly small drill rig might fix that”
Princeton University’s Geo-Exchange System
Jesse’s downshift; Rob’s downshift.
This episode of Shift Key is sponsored by …
Hydrostor is building the future of energy with Advanced Compressed Air Energy Storage. Delivering clean, reliable power with 500-megawatt facilities sited on 100 acres, Hydrostor’s energy storage projects are transforming the grid and creating thousands of American jobs. Learn more at hydrostor.ca.
A warmer world is here. Now what? Listen to Shocked, from the University of Chicago’s Institute for Climate and Sustainable Growth, and hear journalist Amy Harder and economist Michael Greenstone share new ways of thinking about climate change and cutting-edge solutions. Find it here.
Music for Shift Key is by Adam Kromelow.
Though high costs have become central to the upcoming election, they’re mostly out of the state’s control.
New Jersey suffers from some of the highest and fastest-rising retail electricity prices in the nation, according to Energy Information Administration data. From July 2024 to this year, retail prices exploded by more than 20%. Now, energy policy is at the forefront of the state’s gubernatorial election, in which Democratic nominee Mikie Sherrill has promised to cap electricity rate increases in the course of fighting off a strong challenge from Republican Jack Ciattarelli.
So what did the Garden State do to deserve this? “The short answer is that it’s a variety of factors, including transmission and distribution costs and higher capacity prices, largely driven by data centers,” Abraham Silverman, a research scholar at Johns Hopkins and former New Jersey utility regulator, told me.
New Jersey is a microcosm of how and why electricity prices are rising faster than inflation. The system is expensive to maintain and operate. It exists within an electricity market that has seen some of the fastest data center growth in the country. And it has struggled to bring on new supply quickly.
A lot of this comes down to the electricity market the state is in — PJM Interconnection, the country’s largest grid operator. Over the past two years, the cost of guaranteeing that the grid will be able to meet peak demand has skyrocketed to $16.1 billion, from just $2.2 billion in 2023.
These prices are set at auction, in which generators tell the market how much they’d need to be paid to be around in times when the grid is most in need. “PJM’s capacity market — its primary means of incenting investment in new power plants — has not worked as designed since 2018,”, Silverman testified before the New Jersey legislature in March. (The auctions are supposed to be held annually, but were delayed several times toward the end of the last decade as PJM and the Federal Energy Regulatory Commission reviewed proposed rule changes.)
In February, the New Jersey Board of Public Utilities said that its own auction to procure services from PJM, which follows the prices set in the PJM auction, would result in roughly 20% increases in retail electricity bills. “PJM’s recent capacity auction results are the main driver of these increases,” Christine Guhl-Sadovy, the board’s president said in a statement. In practical terms, that’s about a $20 increase per residential electricity bill on average, according to the non-profit urban planning group the Regional Plan Association.
When Silverman analyzed the components of New Jersey’s electricity price increases, he identified an 8.5% increase in energy prices paid through PJM from 2023 to 2024, a five-fold increase in capacity prices, and transmission costs that had doubled over the previous decade, including a 9% increase in just the previous year.
As for what’s behind those skyrocketing capacity price increases, I’ll give you one guess.
“Data center load growth is the primary reason for recent and expected capacity market conditions, including total forecast load growth, the tight supply and demand balance, and high prices,” PJM’s independent market monitor said in a report on the 2024 capacity auction, attributing over $9 billion of the increase to the demands on the grid due to data centers.
While much of that data center demand has been in other PJM states like Virginia, Ohio and Pennsylvania, within the service territory for New Jersey’s largest utility, Public Service Electric & Gas, “interconnection inquiries from data centers and other large customers have increased dramatically, from 400 megawatts a year ago to 4,700 megawatts today,” PJM official Jason Stanek said in testimony before the New Jersey State Senate in March. He also referred to “a shrinking supply of energy and capacity,” which was a polite way of saying that PJM has failed to get new resources through its interconnection queue at a pace that matches planned retirements of older, fossil fuel-fired resources. That, “combined with increasing demand, will result in upward pressure on wholesale and retail prices,” Stanek said.
For years, PJM’s auctions, when they happened, were arguably delivering prices that were too low, leaving the market short of capacity as data center construction and interconnection requests boomed, leading prices to shoot up dramatically, shouldering retail ratepayers with rising bills but not quickly resolving the system’s potential reliability issues.
Still, New Jersey is one of 13 states in PJM, but it has seen some of the sharpest electricity increases among that group. In neighboring Pennsylvania, for instance, electricity prices are about a fifth lower and have only risen around 12%.
A major study of recent electricity price increases by the Lawrence Berkeley National Laboratory and the Brattle Group identified New Jersey as an especially severe case — the worst, in fact — even within the dramatic price increases throughout PJM. “New Jersey is experiencing some of the highest price increases of all PJM states in summer of 2025,” the study found.
New Jersey is also exceptionally exposed to natural gas prices. About 60% of its electricity generation comes from natural gas — although that explains more of the price increases in the years immediately following the Russian invasion of Ukraine, and less of the recent price hikes, according to the Lawrence Berkeley and Brattle Group researchers.
New Jersey is the nation’s most population-dense state, but it is also at the mercy of national markets and other states for its power, explained Kyle Mason, an associate planner at the Regional Plan Association.
“A major New Jersey factor is that it’s a net importer,” Mason told me, meaning that the state can’t always satisfy its own demands with home-grown power. “So in times of peak demand, they have to import energy from other states within PJM, and that makes them more reliant on PJM markets, particularly their capacity market,” Mason said.
New Jersey has been working to maintain and expand its existing clean energy generation, including subsidizing nuclear power plants when prices were low and investing in distributed solar power.
But it could do more. Silverman pointed to this in his testimony when he said that “a number of New Jersey-based storage projects have already survived the interconnection gauntlet and could be deployed quickly with the right incentives” — that is, they’ve been approved by PJM but have yet to be built.
New Jersey's offshore wind efforts — which would have provided large amounts of in-state clean generation — have been stymied by a combination of supply chain challenges and Donald Trump. Ciattarelli, the Republican candidate for governor, has said he would ban offshore wind, while both he and Sherrill support more nuclear power.
But even the governor of New Jersey can only do so much. “They are at the mercy of the federal government and the larger PJM body,” Mason said.