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Your EV options just got a lot smaller — for now, anyway.
Once upon a time, if you wanted to buy an electrified vehicle, you could qualify for a tax credit of up to $7,500 — provided that particular car manufacturer hadn’t yet exceeded the number of eligible vehicles it could sell with that incentive attached.
Sounds a bit complex, right? Today, EV buyers are probably wishing things were that simple.
The finalized EV and plug-in hybrid tax incentive rules go into effect this week. And while they do manage to modernize and refine the old program — including getting rid of the old limit on how many cars were eligible — they also significantly cut down on the number of EVs and PHEVs available for a tax break at this time.
The new rules have been in the works since late last year, but it wasn’t until this week that stipulations around battery sourcing and so-called “critical minerals” took effect as well. As The Verge pointed out Monday, only six vehicles currently on the market (that qualifier is important) are eligible for the full $7,500 tax credit. Others will only be allowed half of that. Many others, including whole brands of automakers, will be left out in the cold entirely.
In short, today’s news is great for General Motors, Ford, or Tesla. It’s tough luck for just about every other car company operating in the EV and PHEV space, like Nissan, Rivian, BMW, or Volkswagen.
The new rules, effective April 18, 2023, stipulate that an EV or PHEV (non-plug-in hybrids sadly don’t qualify at all) only gets tax incentives if its final assembly is in North America; its battery is more than 50% made in North America; and at least 40% of the battery’s “critical minerals” come from the U.S. or one of its free-trade partners. There are essentially two credits involved and each is worth $3,750: one for the car itself and one for the battery. You can see a full list at the EPA’s FuelEconomy.gov website.
The major silver lining in this situation is that customers can still qualify for a full $7,500 tax credit if they lease an EV or PHEV, as long as their dealership decides to pass on the savings.
Let’s break this down.
Come at the king, you best not miss. The worldwide leader in EV production fares very well under the new rules. Granted, the Model S and Model X are too expensive to qualify for any tax breaks, but we knew that going in.
Instead, Tesla’s mainstream, volume-selling cars — the Model 3 and Model Y — keep their full $7,500 tax credits. The only one with batteries that don’t meet the new mineral-sourcing requirement is the Model 3 Standard Range Rear-Wheel-Drive; in other words, the base Model 3.
But between the tax incentives, Elon Musk’s tendency to slash prices on a whim, and the company’s still-unmatched ability to deliver EVs at scale, the rules should keep Tesla’s lead over other automakers pretty comfortable for some time.
Tesla still made up 64 percent of the U.S. EV market last year, and nearly half of its registrations were for the Model Y crossover. In other words, as The Washington Post’s Shannon Osaka pointed out today, the new tax credits are more limited but they do incentivize the cars that make up most of the market.
GM is quick to say that “qualifying customers will have access to the full $7,500 credit across [its] entire EV fleet,” but it’s key to remember that most of the cars on its list are currently not for sale. And others are having a hard time getting there.
For example, the Chevrolet Bolt and Bolt EUV still qualify for the full credits. These two EVs, which have a range of about 250 miles, are both screaming deals — even more so with the full credits. But they’re getting a bit old and do not offer the same fast-charging options that many newer competitors do. It’s not a dealbreaker weakness for the Bolt, but it is arguably the car’s biggest drawback.
The Cadillac Lyriq luxury crossover also qualifies for the full break. But GM has struggled with production for that vehicle. The Lyriq went on sale last year, but GM only made about 8,000 of them in all of 2022, much to the chagrin of reservation-holders and Cadillac’s dealers. To date, they’re seldom seen on roads outside of Detroit. (The GMC Hummer EV is too expensive to qualify for tax credits under the new rules, but it’s also had a lot of production problems to date.)
The rest of the cars on GM’s list — the Chevrolet Equinox EV, Blazer EV and Silverado EV — also aren’t even on sale yet. And given GM’s known troubles ramping up EV output, it’s fair to ask when prospective EV buyers will really be able to take advantage of the new rules here.
Ford’s eligible offerings include the electric Mustang Mach-E, F-150 Lightning, and E-Transit van, as well as the plug-in hybrid Escape. Those cars’ fancier cousins, the Lincoln Aviator and Corsair, also qualify for the hybrid tax credit, which is rated at $3,750.
The survival of the credit is great news for buyers of the F-150 Lightning, which is already America’s best-selling electric truck (and the only one to achieve anything close to real mass production.) Unfortunately, the popular Mustang Mach-E only qualifies for half the credit it used to because its batteries don’t meet the sourcing requirements.
Eventually, Ford will be more than likely able to equip the electric Mustang with compliant batteries. It’s been on the market for a few years now, and so the way it’s designed and built pre-dates these new rules. But it’s still a bit of a bummer for anyone aiming to buy this fast electric crossover.
When the EPA’s list was first unveiled, the biggest loser seemed to be Volkswagen. The German automaker has ambitious all-electric plans and mass-adoption hopes for its ID.4 electric crossover, yet none of its cars initially made the cut. At the time a VW spokesperson said the company was “fairly optimistic" that the ID.4 would qualify for the tax credit once VW received documentation from a supplier. That optimism was not misplaced. On Wednesday, the ID.4 was added to the EPA’s list and made eligible for the full $7,500 tax credit.
Other European automakers who build PHEVs and EVs in North America now find themselves out in the cold, since their batteries may not meet the mineral-sourcing requirements at all anymore.
The cars losing their tax credits entirely include the Audi Q5 TFSI e hybrid; the BMW 330e, and X5 xDrive45e hybrids; and the Volvo S60 hybrids. Being locally built isn’t enough anymore under the new rules, and that certainly represents a setback for these automakers.
At least for now. BMW is planning a $1.2 billion battery factory in South Carolina.
This ambitious electric truck startup also loses its tax incentive qualifications entirely under the new rules. Rivian’s R1T truck and R1S SUV are both built in America, but its Samsung SDI-sourced batteries are not. Last year, the two companies abandoned plans to build a U.S. battery factory together after being unable to come to terms on the deal.
Nissan got hit especially hard on this one. The U.S.-built Leaf won’t meet the battery requirements for the new rules, and the Japan-built Ariya crossover — the star of a big marketing push featuring actor Brie Larson – also won’t be eligible. That’s a tough blow for a brand that’s trying to regain the early lead it once had in the EV space.
At the same time, Nissan is another company with a huge North American factory presence and it will expand that to meet the new tax credit demands. Nissan has said it hopes to sell six EVs in America by 2026, many of them built in Mississippi.
The rules going into effect this week don’t change anything for South Korea’s Hyundai Motor Group. It’s been known for a while that its Korean-built EVs wouldn’t qualify for any tax incentives, and now that’s official. That means critically acclaimed cars like the Hyundai Ioniq 5 and Kia EV6 lose a big advantage over some competitors.
Even Genesis, which now produces an all-electric version of its Genesis GV70 crossover in Alabama, loses out this time. It’s not clear why the Electfied GV70 doesn’t qualify; we will update this story as we learn more.
But the new EV tax credit rules are a big blow for Hyundai, which is undertaking a major EV push to challenge Tesla on the world stage and thought it had worked out a deal with President Biden. Long-term, the answer will be considerably more American EV production, but that will take time. For now, Hyundai is banking on people getting a deal by leasing these EVs instead.
The long-term goal of the new rules is to have a robust EV battery manufacturing infrastructure right here in North America so that our zero-emission future doesn’t depend so much on China. New factories are springing up left and right in the U.S. as automakers and suppliers alike pour billions into future battery power.
But those won’t go online overnight; very much the opposite. Ford’s own $3.5 billion battery plant won’t be up and running until 2026. In the immediate term, these rules so limit eligibility that they could hinder wider EV and PHEV adoption at a crucial time.
All of it begs the question: What is the bigger goal of the IRA’s car-related rules: To get emissions down and spur EV adoption as quickly as possible, or to ramp up a domestic battery manufacturing ecosystem?
If it’s the former, then these new tax credit rules are a bit of a whiff. They’re so limiting they run the risk of keeping people out of electrified vehicles for cost reasons. The average price of an EV is about $60,000 before any incentives, which is greater than the also-high $45,000 average price for most internal combustion new cars.
Cost could slow down EV acceptance right when the public charging infrastructure is finally getting a much-needed shot in the arm of its own.
To be clear, the EVs are coming. Just about every automaker on this list has announced aggressive expansion plans for locally made EVs, batteries, or both. Most automakers are global entities and have to keep an eye on the long game, which seems to be battery-centric thanks to regulations in Europe and China.
Still, this a very tough, specific set of rules to meet — and it means EV growth might just accelerate a little less quickly than it could have.
This article was updated on April 19 at 1:31pm ET after the Volkswagen ID.4 was included on the EPA’s list.
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While you were watching Florida and Wisconsin, voters in Naperville, Illinois were showing up to fight coal.
It’s probably fair to say that not that many people paid close attention to last night’s city council election in Naperville, Illinois. A far western suburb of Chicago, the city is known for its good schools, small-town charm, and lovely brick-paved path along the DuPage River. Its residents tend to vote for Democrats. It’s not what you would consider a national bellwether.
Instead, much of the nation’s attention on Tuesday night focused on the outcomes of races in Wisconsin and Florida — considered the first electoral tests of President Donald Trump and Elon Musk’s popularity. Outside of the 80,000 or so voters who cast ballots in Naperville, there weren’t likely many outsiders watching the suburb’s returns.
But for clean energy and environmental advocates, the Naperville city council results represent an encouraging, if overlooked, victory. On Tuesday, voters in the suburb elected four candidates — incumbents Benjamin White and Ian Holzhauer, and newcomers Mary Gibson and Ashfaq Syed — all of whom oppose the city signing a new contract with the Prairie State Generating Station, the state’s largest and youngest coal-fired plant and the seventh-dirtiest electricity provider in the country.
Naperville is one of 30 municipal investors in the Prairie State plant whose contract with the Illinois Municipal Electric Agency, a public power agency and one of the nine partial owners of Prairie State, has it locked into coal through 2035. Recently, IMEA approached the municipal investors with the promise of favorable terms on a new contract if the cities and towns were willing to re-sign a decade early — by April 30 — and commit to another 20 years of coal power. Most municipalities took the deal, which will run through 2055; Naperville, along with the towns of St. Charles and Winnetka, are still debating the decision, with the deadline looming.
“IMEA’s proposition for communities is, ‘Hey, instead of paying Wall Street and shareholder dividends, we don’t have any of that because we’re a nonprofit, so you get lower energy costs,’” Fernando Arriola, the community relations chair for Naperville Environment and Sustainability Task Force, which opposes the deal with IMEA, told me. “But the way I look at it is, it’s a deal with the devil because you’re locked in for 30 years. And it’s like Hotel California — you can check in anytime you like, but you can never leave.”
In a statement to Heatmap, Staci Wilson, the vice president of government affairs and member services at IMEA, told me that the contract it offered to Naperville is “designed to help … secure more future green resources to serve our member communities for the long term. IMEA is the only power supplier to allow the city to have a direct voice in procuring their wholesale power supply and make reliable, economical, and sustainable resource decisions for the future.”
While it’s true that IMEA allows its municipal members a voice in its future planning, those in Naperville who oppose the new contract point out that the community has just one vote in the process despite making up 35% of the utility’s market.
The pending contract decision became one of the major themes of the city council race in Naperville — attention that caused some locals to grumble about the injection of partisan politics and outside interest in the campaigns. But Syed, a newly elected city council member and a recent immigrant from Dubai, told me that learning that his city relied on coal for 80% of its energy needs was what ultimately galvanized him into running. “Naperville has been a leader in many things, but in this area, we were not doing good,” he said. “So I stepped up.”
Illinois has one of the nation’s most aggressive decarbonization timelines, requiring coal and gas plants to close by 2030. But there is a carve-out for plants owned by public entities like municipal utilities or rural electric cooperatives, and Prairie State fits that bill. Instead, the power plant has to reduce emissions by 45% by 2038, a goal IMEA says it can reach by installing multi-billion dollar carbon capture and storage technologies. Energy experts have been widely skeptical of the proposal. “The people I’ve talked to say that’s unproven and it doesn’t necessarily work, and it’s a high price,” Arriola said.
Still, cost concerns related to transitioning away from coal had “definitely been a conversation in town” leading up to Tuesday’s election, Arriola told me. “A lot of people are seriously concerned about pricing, and there are also concerns about the reliability.” Syed told me that was one of the objections he heard the most when talking to constituents during his campaign. “Some of the Republicans who were against [exporing alternative energy options] were trying to influence people, saying we need to think about the cost,” he said. “My standard answer to these people was that I am not going to compromise clean energy just for the cost purpose.”
Perhaps most interestingly, unlike many communities that oppose power plants, Naperville is located almost 300 miles north of the Prairie State Generating Station and is unaffected by its immediate pollution. Naperville voters who opposed renewing the contract did so on the merits of finding cleaner energy sources and on the objection to dirty electricity that is otherwise out of sight and out of mind. As Amanda Pankau, the director of energy and community resiliency at the Prairie Rivers Network, an environmental nonprofit in the state, told me, “From a climate perspective, we should all care about the Prairie State coal plant.” She noted that the emissions from the plant — around 12.4 million tons of carbon dioxide a year — are “impacting every single Illinoisan and every single person that lives on planet Earth.”
Despite those existential stakes, it could be tempting to wave away the results in Naperville as being on trend for a relatively affluent and liberal-leaning town. Compared to the Wisconsin supreme court election, where the Democrat-backed candidate overcame enormous spending margins to trounce her Republican-backed opponent, it does not necessarily indicate the same momentum for the party heading into 2026’s midterms. (Nor does it even have the biggest climate-related election headline of the night: Tesla is suing Wisconsin for a law preventing car manufacturers from owning car dealerships, which the state’s high court will likely decide.)
But at a time of little good news in the climate sphere, the Naperville election is an encouraging and invigorating reminder that there are candidates who believe in cleaner technologies, and that the battles can still — or especially — be won at the local level. “Twenty-five or 30 years ago, the IMEA contract we signed for that time was okay,” Syed said. “But it’s not okay today. We cannot have this $2 billion contract until 2055 because the next generation will ask us this question: ‘What have you people done for us this time?’”
The Department of Energy has put together a list of sites and is requesting proposals from developers, Heatmap has learned.
The Department of Energy is moving ahead with plans to allow companies to build AI data centers and new power plants on federal land — and it has put together a list of more than a dozen sites nationwide that could receive the industrial-scale facilities, according to an internal memo obtained by Heatmap News.
The memo lists sites in Texas, Illinois, New Jersey, Colorado, and other locations. The government could even allow new power plants — including nuclear reactors and carbon-capture operations — to be built on the same sites to generate enough electricity to power the data centers, the memo says.
Trump officials hope to start construction on the new data centers by the end of this year and switch them on by the end of 2027, according to the memo.
The agency will request formal feedback from artificial intelligence companies and developers about how best to proceed with its proposal as soon as Thursday, according to an individual who wasn’t authorized to speak about the matter publicly.
The effort, aimed at maintaining America’s “global AI dominance,” represents one of the few points of agreement between the Trump and Biden administrations. In the final days of his term, President Biden ordered the government to identify federal properties where new data centers could be built.
Scarcely a week later, President Trump issued an executive order lifting all Biden-era limits on AI development — but keeping the mandate to move quickly to maintain America’s alleged edge in the new technology. “It is the policy of the United States to sustain and enhance America’s global AI dominance,” the Trump order said.
The new memo proposes a list of 16 federal sites that could host AI data centers, new power plants, and other “AI infrastructure.” They include several sites where nuclear weapon components are made, including the Pantex site near Amarillo, Texas, and the Kansas City National Security Campus, which is operated by Honeywell International. The other candidate sites are:
Other sites could still be considered, the memo says, and the current list has no particular ranking or order.
The offer may not be enough to convince developers to work with the federal government, one energy expert told me.
“I think it’s important that the government is thinking about how to help the industry, but you also have to think about it from the perspective of the industry a little bit. Why is doing this on a DOE site better than doing this as a project in Texas?” said Peter Freed, a founding partner at the Near Horizon Group and the former director of energy strategy at Meta.
“Historically, the perspective is that anything involving government land just adds complexity,” Freed told me. “I love Idaho National Lab. It’s a national treasure. But if you want a data center there by the end of 2027 — where is the power going to come from?”
Only if the government were able to guarantee fast-track access to certain kinds of equipment — such as transformers or circuit breakers, which are in a severe shortage — would it make sense for most developers to work with them, he said.
The new memo raises the idea that “innovative energy technologies” including “nuclear reactors, enhanced geothermal systems, fuel cells, carbon capture, energy storage systems, and portfolios of on-site technologies” could be considered to power the new data centers.
The memo asks potential developers, “What information would you need to determine the suitability of various energy storage systems (e.g., subsurface thermal energy storage, flow battery, metal anode battery) as a means for supporting data center cooling or other operations?” It also asks what companies would need to know about a site’s suitability for carbon capture and storage operations. It asks, too, what information might be needed about a site’s topography, physical security, and earthquake risk to build a new nuclear power plant.
The memo doesn’t mention wind turbines or new solar farms, although they could fall under some of the terms it sets out. It also asks companies what information they might need about nearby nuclear power plants or the local power grid — and it inquires whether some data center operations could be turned on and off depending on local power availability.
Although the government could allow new data centers to be built, it won’t accept all liability for them. The memo adds that companies might need to “agree to bear all responsibility for costs and liabilities related to construction and operation of the Al data centers as well as other infrastructure upgrades necessary to support those data centers.”
The Trump administration seems intent on moving quickly on the proposal. Once it publishes the request, companies will have 30 days to respond.
Current conditions: A rare wildfire alert has been issued for London this week due to strong winds and unseasonably high temperatures • Schools are closed on the Greek islands of Mykonos and Paros after a storm caused intense flooding • Nearly 50 million people in the central U.S. are at risk of tornadoes, hail, and historic levels of rain today as a severe weather system barrels across the country.
President Trump today will outline sweeping new tariffs on foreign imports during a “Liberation Day” speech in the White House Rose Garden scheduled for 4 p.m. EST. Details on the levies remain scarce. Trump has floated the idea that they will be “reciprocal” against countries that impose fees on U.S. goods, though the predominant rumor is that he could impose an across-the-board 20% tariff. The tariffs will be in addition to those already announced on Chinese goods, steel and aluminum, energy imports from Canada, and a 25% fee on imported vehicles, the latter of which comes into effect Thursday. “The tariffs are expected to disrupt the global trade in clean technologies, from electric cars to the materials used to build wind turbines,” explained Josh Gabbatiss at Carbon Brief. “And as clean technology becomes more expensive to manufacture in the U.S., other nations – particularly China – are likely to step up to fill in any gaps.” The trade turbulence will also disrupt the U.S. natural gas market, with domestic supply expected to tighten, and utility prices to rise. This could “accelerate the uptake of coal instead of gas, and result in a swell in U.S. power emissions that could accelerate climate change,” Reutersreported.
Republican candidates won in two House races in Florida on Tuesday, one of which was looking surprisingly tight going into the special elections. The victories by Jimmy Patronis in Florida’s First District and Randy Fine in the Sixth District bolster the party’s slim House majority and could spell trouble for the Inflation Reduction Act as the House Ways and Means Committee mulls which programs to cut to pay for tax cuts. But the result in Wisconsin’s Supreme Court election was less rosy for Republicans. Liberal Judge Susan Crawford defeated conservative Brad Schimel despite Schimel’s huge financial backing from Tesla CEO and Trump adviser Elon Musk, who poured some $15 million into the competition. The outcome “could tarnish the billionaire’s political clout and trigger worry for some Republicans about how voters are processing the opening months of Trump’s new administration,” as The Wall Street Journalexplained.
The Trump administration announced mass layoffs across the Department of Health and Human Services on Wednesday, part of a larger effort to reduce the agency’s workforce by 25%. The cuts included key staffers with the Low Income Home Energy Assistance Program, which has existed since 1981 and helps some 6.7 million low-income households pay their energy bills. A 2022 white paper calls LIHEAP “one of the most critical components of the social safety net.” The move comes at a time when many U.S. utilities are preparing to raise their energy prices to account for higher costs for materials, labor, and grid upgrades. In a scathing letter to HHS Secretary Robert F. Kennedy. Jr., Senate Energy and Commerce Democrats call the workforce cuts “reckless” and demand detailed explanations for why roles have been eliminated.
Energy storage startup Energy Vault on Wednesday announced it had closed $28 million in project financing for a hybrid green hydrogen microgrid energy storage facility in California. The firm says its Calistoga Resiliency Center, deployed in partnership with utility company Pacific Gas & Electric, is “specifically designed to address power resiliency given the growing challenges of wildfire risk in California.” The zero-emission system will feature advanced hydrogen fuel cells that are integrated with lithium-ion batteries, which can provide about 48 hours of back-up power via a microgrid to the city of Calistoga during wildfire-related power shutoffs. The site is expected to be commercially operational in the second quarter of 2025.
“The CRC serves as a model for Energy Vault’s future utility-scale hybrid microgrid storage system deployments as the only existing zero-emission solution to address [power shutoff] events that is scalable and ready to be deployed across California and other regions prone to wildfires,” the company said in a press release. As Heatmap’s Katie Brigham wrote last fall, PG&E has become an important partner for climate and energy tech companies with the potential to reduce risk and improve service on the grid.
China will finalize its first-ever sale of a green sovereign bond Wednesday. The country is expected to issue the bond on the London Stock Exchange and has reportedly received more than $5 billion in bids. “It’s no coincidence that China has chosen to list its debut green bond in London, given European investors’ continued strong demand for environmental products,” Bloombergnoted. Green bonds are investment vehicles that raise money exclusively for projects that benefit the climate or environment. China’s finance ministry wants the bond to “attract international funds to support domestic green and low-carbon development,” and specifically climate change mitigation and adaptation, nature conservation and biodiversity, and pollution prevention and control. Some of the money raised might also go toward China’s EV charging infrastructure, according toReuters.
GE Vernova has now produced more than half of the turbines needed for the SunZia Wind project in New Mexico. When completed in 2026, the 2.4 gigawatt project will be the largest onshore wind farm in the Western Hemisphere.