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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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Inside a wild race sparked by a solar farm in Knox County, Ohio.
The most important climate election you’ve never heard of? Your local county commissioner.
County commissioners are usually the most powerful governing individuals in a county government. As officials closer to community-level planning than, say a sitting senator, commissioners wind up on the frontlines of grassroots opposition to renewables. And increasingly, property owners that may be personally impacted by solar or wind farms in their backyards are gunning for county commissioner positions on explicitly anti-development platforms.
Take the case of newly-elected Ohio county commissioner – and Christian social media lifestyle influencer – Drenda Keesee.
In March, Keesee beat fellow Republican Thom Collier in a primary to become a GOP nominee for a commissioner seat in Knox County, Ohio. Knox, a ruby red area with very few Democratic voters, is one of the hottest battlegrounds in the war over solar energy on prime farmland and one of the riskiest counties in the country for developers, according to Heatmap Pro’s database. But Collier had expressed openness to allowing new solar to be built on a case-by-case basis, while Keesee ran on a platform focused almost exclusively on blocking solar development. Collier ultimately placed third in the primary, behind Keesee and another anti-solar candidate placing second.
Fighting solar is a personal issue for Keesee (pronounced keh-see, like “messy”). She has aggressively fought Frasier Solar – a 120 megawatt solar project in the country proposed by Open Road Renewables – getting involved in organizing against the project and regularly attending state regulator hearings. Filings she submitted to the Ohio Power Siting Board state she owns a property at least somewhat adjacent to the proposed solar farm. Based on the sheer volume of those filings this is clearly her passion project – alongside preaching and comparing gay people to Hitler.
Yesterday I spoke to Collier who told me the Frasier Solar project motivated Keesee’s candidacy. He remembered first encountering her at a community meeting – “she verbally accosted me” – and that she “decided she’d run against me because [the solar farm] was going to be next to her house.” In his view, he lost the race because excitement and money combined to produce high anti-solar turnout in a kind of local government primary that ordinarily has low campaign spending and is quite quiet. Some of that funding and activity has been well documented.
“She did it right: tons of ground troops, people from her church, people she’s close with went door-to-door, and they put out lots of propaganda. She got them stirred up that we were going to take all the farmland and turn it into solar,” he said.
Collier’s takeaway from the race was that local commissioner races are particularly vulnerable to the sorts of disinformation, campaign spending and political attacks we’re used to seeing more often in races for higher offices at the state and federal level.
“Unfortunately it has become this,” he bemoaned, “fueled by people who have little to no knowledge of what we do or how we do it. If you stir up enough stuff and you cry out loud enough and put up enough misinformation, people will start to believe it.”
Races like these are happening elsewhere in Ohio and in other states like Georgia, where opposition to a battery plant mobilized Republican primaries. As the climate world digests the federal election results and tries to work backwards from there, perhaps at least some attention will refocus on local campaigns like these.
And more of the week’s most important conflicts around renewable energy.
1. Madison County, Missouri – A giant battery material recycling plant owned by Critical Mineral Recovery exploded and became engulfed in flames last week, creating a potential Vineyard Wind-level PR headache for energy storage.
2. Benton County, Washington State – Governor Jay Inslee finally got state approvals finished for Scout Clean Energy’s massive Horse Heaven wind farm after a prolonged battle over project siting, cultural heritage management, and bird habitat.
3. Fulton County, Georgia – A large NextEra battery storage facility outside of Atlanta is facing a lawsuit that commingles usual conflicts over building these properties with environmental justice concerns, I’ve learned.
Here’s what else I’m watching…
In Colorado, Weld County commissioners approved part of one of the largest solar projects in the nation proposed by Balanced Rock Power.
In New Mexico, a large solar farm in Sandoval County proposed by a subsidiary of U.S. PCR Investments on land typically used for cattle is facing consternation.
In Pennsylvania, Schuylkill County commissioners are thinking about new solar zoning restrictions.
In Kentucky, Lost City Renewables is still wrestling with local concerns surrounding a 1,300-acre solar farm in rural Muhlenberg County.
In Minnesota, Ranger Power’s Gopher State solar project is starting to go through the public hearing process.
In Texas, Trina Solar – a company media reports have linked to China – announced it sold a large battery plant the day after the election. It was acquired by Norwegian company FREYR.What happened this week in climate and energy policy, beyond the federal election results.
1. It’s the election, stupid – We don’t need to retread who won the presidential election this week (or what it means for the Inflation Reduction Act). But there were also big local control votes worth watching closely.
2. Michigan lawsuit watch – Michigan has a serious lawsuit brewing over its law taking some control of renewable energy siting decisions away from municipalities.