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The EV transition is facing a reality check. Can the planet afford it?
Once, it seemed like a major coup d’etat in the global war on carbon emissions: The United Kingdom, even under the conservative leadership of Prime Minister Boris Johnson at the time, announced in 2020 that it was 10 years away from banning the sale of new diesel and gasoline cars. In other words, any new cars sold in 2030 and beyond — and 1.6 million of them were purchased last year — would need to be zero-emission vehicles, likely electric cars but also some hydrogen cars as well.
Fast forward a bit to a year that’s seen more uneven EV adoption than many anticipated, a situation exacerbated by a shaky post-pandemic global economy. Now, the British government under Prime Minister Rishi Sunak hits reverse: Did we say 2030? Oh, we mean 2035 instead.
Sunak announced this week that the UK will, in his words, “ease the transition to electric vehicles,” allowing sales of new internal combustion cars until 2035. His decision is a disappointing one for climate reasons and, allegedly, even for some automakers hinging big hopes and potentially trillions of dollars on transitioning to EVs. (More on that later.) But the bigger question is, is this rollback just the start of a bigger trend?
Unfortunately, it probably is. Because what we’re finding with EVs is that saying you’re going to do something is a lot easier than actually doing it.
Sunak’s decision quickly outraged scientists and green groups, especially since it came during Climate Week, a time when leaders from all over the world (including Prince William) gathered in New York to discuss how to mitigate the greatest crisis of our lifetimes. It even angered some drivers in the U.K., according to The Guardian; people who were counting on a more robust used EV market and now worry about a slower rollout for public charging.
Transparently, I’m no expert on the U.K.’s climate politics. My own country gives me plenty of headaches on that front, thanks very much. But Sunak’s points aren’t entirely unreasonable here. He blames the high cost of EVs and fears an effectively all-electric new car market will put an undue financial burden on ordinary people already squeezed by inflation, high energy costs, and an uncertain economy. “We seem to have defaulted to an approach which will impose unacceptable costs on hard-pressed British families,” Sunak said in his speech this week. And he’s not wrong; as is the case in the U.S., EVs are still considerably more expensive than internal combustion cars, and Britain has its challenges with a woefully inadequate and unreliable charging infrastructure.
I’ll also give Sunak, who like Johnson is a conservative, some credit for actually admitting that climate change is an existential problem. “No one can watch the floods in Libya or the extreme heat in Europe this summer, and doubt that it is real and happening,” he said in his remarks this week, while touting Britain’s gains in reducing carbon and fighting pollution. That’s more than we get here in America, where our conservatives can barely admit that human-driven global warming is real — let alone say we need to do anything about it. (The bar is extraordinarily low over here!) Finally, Sunak is also not entirely off-course when he says the 2035 target aligns with what Germany, Canada, Sweden, and U.S. states like New York and California are planning too.
But that’s about as magnanimous as I’m willing to be here with Sunak’s arbitrary-seeming decision. It’s extremely unclear what Sunak expects to happen by giving this an extra five years, except further delay solving some of the very problems he describes here; after all, more EVs on the road and more EV production in Britain (thanks to increased demand) will lower prices the same as any consumer product, and push the charging infrastructure forward, too. Any improvements on those fronts just lost a sense of urgency that could’ve made them happen sooner.
Then there’s the domino effect problem. At worst, this move could provide ammunition for those governments — and car companies, and energy providers, and anyone else crucial to this transition — to slow-walk a move to zero-emission transportation.
If the U.K. can move its target date back, why wouldn’t Germany, which is also fretting about what this shift means for its ultra-important car industry? Why wouldn’t New York or California, which are struggling in similar ways with high costs of living, housing affordability, and the challenge of building out vast and reliable charging networks? (Yes, even California isn’t good enough there yet.)
And is five years “enough” to stave off intense EV competition from China? What does “enough” even mean in that context? Moving the targets, as Sunak has done, feels like a step away from what was once such an ambitious move for the United Kingdom — a country that, in spite of all of these challenges, is seeing fast and record EV growth this year; it could be as high as 23% of the market in 2024, about twice what America’s tracking for. It’s making progress on the electric front, so why kneecap that progress now?
Then there are the automakers themselves; the phrase “trust, but verify” always comes to mind when I hear about their commitments to going all-electric. Not all of them are setting firm dates to swear off internal combustion. But most, if not all, are making aggressive and enormous investments into EVs and battery plants; any delays or uneven regulations could throw a wrench into those plans, leading them to invest a ton of money into cars people may not want to buy.
Some of them even hit back at Sunak’s decision, including officials from Kia and Volkswagen; "Our business needs three things from the U.K. government: ambition, commitment, and consistency. A relaxation of 2030 would undermine all three," Ford U.K. Chair Lisa Brankin said. It could also be equally troublesome for the U.K.’s perpetually beleaguered auto industry. Just last week, Mini’s parent company BMW announced a major investment to make the brand fully electric and keep production British instead of Chinese — all by 2030, too. Mini’s future finally seemed secure after years of uncertainty between Brexit and the decline of small car sales; now it gets hit by a curve ball (or whatever soccer, cricket or rugby equivalent fits best) from its own government that will torpedo demand for all those new EVs for years to come.
At the same time, many automakers are hedging their bets here too, even if they won’t admit it openly. Ultimately, their duty is to shareholders, not the planet. In the U.S., Ford is dialing back some of its aggressive EV targets and focusing a little more on hybrid cars amid uneven electric adoption and production troubles this year. General Motors has committed to going all-electric eventually, but it’s also coming out with a new gasoline V8 to power its next generation of big trucks and SUVs, which drive basically all of its profits. (They’re not even hybrid engines.) And other automakers would rather rely on a network of parts suppliers, factories and dealers they’ve set up over a century to sell gas cars than make an electric pivot they won’t all survive.
In other words, give them an excuse — say, pushing back internal combustion bans — and they may not do it at all. I could easily see a reality where a car company like GM, which has committed to going all-electric by 2035, says it’s going to be 2040 now. And then 2045. And then, “Look at all these efficient gasoline cars we have now!” or “But have you seen the new Escalade? We’re throwing in the air filtration system as standard — massaging seats, too!” Like I said: trust, but verify.
In short, I fear the British government’s decision this week will lead other governments and their leaders to dial back some of their most aggressive climate commitments, even if they take this challenge more seriously than much of America does. It’s like a crack in a dam: It sometimes starts with just a few small ones right before the flood happens. After all, even the ultra-tough European Union left the door open to internal combustion sales past 2035, provided they run on deeply unproven “e-fuels.”
Sunak is right when he says this will be a difficult transition to zero-emission cars — which will almost certainly be EVs and not other types of vehicles in the near term. It’s hard and expensive. The automakers probably also hate it, deep down, because it’s hard and expensive. And no one should believe the world can “fix” climate change with EVs, especially when they’re $60,000 SUVs.
But moving to zero-emission cars is about laying the long-term groundwork for a world where automotive transportation creates vastly less pollution than it does now. For the United Kingdom, that goal just moved five more years down the road. Let’s hope it doesn’t move any further.
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Current conditions: In the Atlantic, the tropical storm that could, as it develops, take the name Jerry is making its way westward toward the U.S. • In the Pacific, Hurricane Priscilla strengthened into a Category 2 storm en route to Arizona and the Southwest • China broke an October temperature record with thermometers surging near 104 degrees Fahrenheit in the southeastern province of Fujian.
The Department of Energy appears poised to revoke awards to two major Direct Air Capture Hubs funded by the Infrastructure Investment and Jobs Act in Louisiana and Texas, Heatmap’s Emily Pontecorvo reported Tuesday. She got her hands on an internal agency project list that designated nearly $24 billion worth of grants as “terminated,” including Occidental Petroleum’s South Texas DAC Hub and Louisiana's Project Cypress, a joint venture between the DAC startups Heirloom and Climeworks. An Energy Department spokesperson told Emily that he was “unable to verify” the list of canceled grants and said that “no further determinations have been made at this time other than those previously announced,”referring to the canceled grants the department announced last week. Christoph Gebald, the CEO of Climeworks, acknowledged “market rumors” in an email, but said that the company is “prepared for all scenarios.” Heirloom’s head of policy, Vikrum Aiyer, said the company wasn’t aware of any decision the Energy Department had yet made.
While the list floated last week showed the Trump administration’s plans to cancel the two regional hydrogen hubs on the West Coast, the new list indicated that the Energy Department planned to rescind grants for all seven hubs, Emily reported. “If the program is dismantled, it could undermine the development of the domestic hydrogen industry,” Rachel Starr, the senior U.S. policy manager for hydrogen and transportation at Clean Air Task Force told her. “The U.S. will risk its leadership position on the global stage, both in terms of exporting a variety of transportation fuels that rely on hydrogen as a feedstock and in terms of technological development as other countries continue to fund and make progress on a variety of hydrogen production pathways and end uses.”
Remember the Tesla announcement I teased in yesterday’s newsletter? The predictions proved half right: The electric automaker did, indeed, release a cheaper version of its midsize SUV, the Model Y, with a starting price just $10 shy of $40,000. Rather than a new Roadster or potential vacuum cleaner, as the cryptic videos the company posted on CEO Elon Musk’s social media site hinted, the second announcement was a cheaper version of the Model 3, already the lower-end sedan offering. Starting at $36,990, InsideEVs called it “one of the most affordable cars Tesla has ever sold, and the cheapest in 2025.” But it’s still a far cry from Musk’s erstwhile promise to roll out a Tesla for less than $30,000.
That may be part of why the company is losing market share. As Heatmap’s Matthew Zeitlin reported, Tesla’s slice of the U.S. electric vehicle sales sank to its lowest-ever level in August despite Americans’ record scramble to use the federal tax credits before the September 30 deadline President Donald Trump’s new tax law set. General Motors, which sold more electric vehicles in the third quarter of this year than in all of 2024, offers the cheapest battery-powered passenger vehicle on the market today, the Chevrolet Equinox, which starts at $35,100.
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Trump’s pledge to revive the United States’ declining coal industry was always a gamble — even though, as Matthew reported in July, global coal demand is rising. Three separate stories published Tuesday show just how stacked the odds are against a major resurgence:
As you may recall from two consecutive newsletters last month, Secretary of Energy Chris Wright said “permitting reform” was “the biggest remaining thing” in the administration’s agenda. Yet Republican leaders in Congress expressed skepticism about tacking energy policy into the next reconciliation bill. This week, however, Utah Senator Mike Lee, the chairman of the Senate Committee on Energy and Natural Resources, called for a legislative overhaul of the National Environmental Policy Act. On Monday, the pro-development social media account Yimbyland — short for Yes In My Back Yard — posted on X: “Reminder that we built the Golden Gate Bridge in 4.5 years. Today, we wouldn’t even be able to finish the environmental review in 4.5 years.” In response, Lee said: “It’s time for NEPA reform. And permitting reform more broadly.”
Last month, a bipartisan permitting reform bill got a hearing in the House of Representatives. But that was before the government shutdown. And sources familiar with Democrats’ thinking have in recent months suggested to me that the administration’s gutting of so many clean energy policies has left Republicans with little to bargain with ahead of next year’s midterm elections.
Soon-to-be Japanese prime minister Sanae Takaichi.Yuichi Yamazaki - Pool/Getty Images
On Saturday, Japan’s long-ruling Liberal Democratic Party elected its former economic minister, Sanae Takaichi, as its new leader, putting her one step away from becoming the country’s first woman prime minister. Under previous administrations, Japan was already on track to restart the reactors idled after the 2011 Fukushima disaster. But Takaichi, a hardline conservative and nationalist who also vowed to re-militarize the nation, has pushed to speed up deployment of new reactors and technologies such as fusion in hopes of making the country 100% self-sufficient on energy.
“She wants energy security over climate ambition, nuclear over renewables, and national industry over global corporations,” Mika Ohbayashi, director at the pro-clean-energy Renewable Energy Institute, told Bloomberg. Shares of nuclear reactor operators surged by nearly 7% on Monday on the Tokyo Stock Exchange, while renewable energy developers’ stock prices dropped by as much as 15%
Researchers at the United Arab Emirates’ University of Sharjah just outlined a new method to transform spent coffee grounds and a commonly used type of plastic used in packaging into a form of activated carbon that can be used for chemical engineering, food processing, and water and air treatments. By repurposing the waste, it avoids carbon emitting from landfills into the atmosphere and reduces the need for new sources of carbon for industrial processes. “What begins with a Starbucks coffee cup and a discarded plastic water bottle can become a powerful tool in the fight against climate change through the production of activated carbon,” Dr. Haif Aljomard, lead inventor of the newly patented technology, said in a press release.
Last week’s Energy Department grant cancellations included funding for a backup energy system at Valley Children’s Hospital in Madera, California
When the Department of Energy canceled more than 321 grants in an act of apparent retribution against Democrats over the government shutdown, Russ Vought, President Trump’s budget czar, declared that the money represented “Green New Scam funding to fuel the Left's climate agenda.”
At least one of the grants zeroed out last week, however, was supposed to help keep the lights on at a children’s hospital.
The $29 million grant was intended to build a 3.3-megawatt long-duration energy storage system at Valley Children’s Hospital, a large pediatric hospital in Madera, California. The system would “power critical hospital operations during outage events,” such as when the California grid shuts down to avoid starting wildfires, according to project documents.
“The U.S. Department of Energy’s cancellation of funding for [the] long-duration energy storage demonstration grant is disappointing,” Zara Arboleda, a spokesperson for the hospital, told me.
Valley Children’s Hospital is a 358-bed hospital that says it serves more than 1.3 million children across California’s Central Valley. It has 28 neonatal intensive care unit beds and nationally ranked specialties in pediatric neurology, orthopedics, and lung surgery, among others.
Energy Secretary Chris Wright has characterized the more than $7.5 billion in grants canceled last week as part of an ongoing review of financial awards made by the Biden administration. But the timing of the cancellations — and Vought’s gleeful tweets about them — suggests a more vindictive purpose. Republican lawmakers and President Trump himself threatened to unleash Vought as a kind of rogue budget cutter before the federal government shut down last week.
“We don’t control what he’s going to do,” Senator John Thune told Politico last week. “I have a meeting today with Russ Vought, he of PROJECT 2025 Fame, to determine which of the many Democrat Agencies, most of which are a political SCAM, he recommends to be cut,” Trump posted on the same day.
Up until this year, canceling funding that is already under contract with a private party would have been thought to be straightforwardly illegal under federal law. But the Supreme Court’s conservative majority has allowed the Trump administration to act with previously unimaginable freedom while it considers ruling on similar cases.
Faraday Microgrids, the contractor that was due to receive the funding, is already building a microgrid for the hospital. The proposed backup power system — which the grant stipulated should be “non-lithium-ion” — was supposed to be funded by the Energy Department’s Office of Clean Energy Demonstrations, with the goal of finding new ways of storing electricity without using lithium-ion batteries, and was meant to work in concert with that new microgrid and snap on in times of high stress.
That microgrid project is still moving forward, Arboleda, the hospital’s spokesperson, told me. “Valley Children’s Hospital continues to build and soon will operate its microgrid announced in 2023 to ensure our facilities have access to reliable and sustainable energy every minute of every day for our patients and our care providers,” she added. That grid will contain some storage, but not the long-term storage system discussed in the official plan.
Faraday Microgrids, formerly known as Charge Bliss, didn’t respond to a request for comment, but its website touts its ability to secure grants and other government funding for energy projects.
In a statement, a spokesman for the Energy Department said that the grant was canceled because the project wasn’t feasible. “Following an in-depth review of the financial award, it was determined, among other reasons, that the viability of the project was not adequate to warrant further disbursements,” Ben Dietderich, a spokesman for the Energy Department, told me.
The children’s hospital, at least, is in good company. On Tuesday, a Trump administration document obtained by Heatmap News suggested the Energy Department is moving to kill bipartisan-backed funding for two direct air capture hubs in Texas and Louisiana. And although California has lost the most grants of any state, the Energy Department has also sought to terminate funding for new factories and industrial facilities across Republican-governed states.
Rob and Jesse break down China’s electricity generation with UC San Diego’s Michael Davidson.
China announced a new climate commitment under the Paris Agreement at last month’s United Nations General Assembly meeting, pledging to cut its emissions by 7% to 10% by 2035. Many observers were disappointed by the promise, which may not go far enough to forestall 2 degrees Celsius of warming. But the pledge’s conservatism reveals the delicate and shifting politics of China’s grid — and how the country’s central government and its provinces fight over keeping the lights on.
On this week’s episode of Shift Key, Rob and Jesse talk to Michael Davidson, an expert on Chinese electricity and climate policy. He is a professor at the University of California, San Diego, where he holds a joint faculty appointment at the School of Global Policy and Strategy and the Jacobs School of Engineering. He is also a senior associate at the Center for Strategic and International Studies, and he was previously the U.S.-China policy coordinator for the Natural Resources Defense Council.
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.
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Here is an excerpt from our conversation:
Robinson Meyer: Your research and other people’s research has revealed that basically, when China started making capacity payments to coal plants, in some cases, it didn’t have the effect on the bottom line of these plants that was hoped for, and also we didn’t really see coal generation go down or change in the year that it happened. It wasn’t like they were paying these plants to stick around and not run. They were basically paying these plants, it seems like, to do the exact same thing they did the year before, but now they also got paid. And maybe that was needed for their economics, we can talk about it.
Why did coal get those payments and not, say, batteries or other sources of spare capacity, like pumped hydro storage, like nuclear? Why did coal, specifically, get payments for capacity? And does it have to do with spinning reserve? Or does it have to do with the political economy of coal in China?
Michael Davidson: When it came out, we said exactly the same thing. We said, okay, this should be a technology neutral payment scheme, and it should be a market, not a payment, right? But China’s building these things up little by little. Over time we’ve seen, historically, actually, a number of systems internationally started with payments before they move to markets because they realize that you could get a lot more competitive pressure with markets.
The capacity payment scheme for coal is extremely simple, right? It says, okay, for each province, we’re going to say what percentage of our benchmark coal investment costs are we going to subsidize. It’s extremely simple. It does not account for how much you’re using it at a plant by plant level. It does not account for other factors, renewables, etc. It’s a very coarse metric. But I wouldn’t say that it had had some, you know, perverse negative effect on the outcome of what coal generation is. Probably more likely is that these payments were seen, for some, as extra support. But then for some that are really hurting, they’re saying, okay, well then we will maybe put up less obstacles to market reforms.
But then on top of that, you have to put in the hourly energy demand growth story and say, okay, well you have all these renewables, but you don’t have enough storage to shift to evening peaks. You are going to rely on coal to meet that given the current rigid dispatch system. And so you’re dispatching them kind of regardless of whether or not you have the payment schemes.
I will say that I was a skeptic, right? Because when people told me that China should put in place a capacity market, I said, China has overcapacity. So if you have an overcapacity situation, you put in place a market, the prices should be zero. So what’s the point? But actually, when you’re looking out ahead with all of this surplus coal capacity that you’re trying to push down, you’re trying to push those capacity factors of those coal plans from 50%, 60%, down to 20% or even lower, they need to have other revenue schemes if you’re not going to dramatically open up your spot markets, which China is very hesitant to do — very risk averse when it comes to the openness of spot markets, in terms of price gaps. So that’s a necessary part of this transition. But it can be done more efficiently, and it should done technology neutral.
And by the way that is happening in certain places. That’s a national scheme, but we actually see that the implementation — for example, Shaanxi province, we have a technology neutral scheme that would include other resources, not just coal.
Mentioned:
China’s new pledge to cut its emissions by 2035
What an ‘ambitious’ 2035 electricity target looks like for China
China’s Clean Energy Pledge is Clouded by Coal, The Wire China
Jesse’s upshift; Rob’s upshift.
This episode of Shift Key is sponsored by …
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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.