You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
The new rules are complicated. Here’s how to make sense of them if you’re shopping for an electric vehicle.
The Department of Treasury published new rules last year that will determine which new electric vehicles, purchased for personal use, will qualify for a $7,500 tax credit. They went into effect on April 18, 2023, and last for the next decade or so.
These new tax credit rules are complicated. The list of cars that qualify for the new tax credit can change from year to year — and even month to month. Many buyers in the EV market might have a few questions, including: Should I buy that new car now, or should I wait? Which cars qualify for the current tax credit, and which ones will earn the new one?
This is Heatmap’s guide to the new tax credit, why it matters, and what to keep in mind as you go EV shopping.
If you’re an ordinary American buying a brand-new EV to run errands and pick up the kids, these new rules apply to you. They will determine which cars you can get a federally funded discount on.
If you’re not buying a new car for personal use — because you’re getting it for your business, say, or because you’re buying a used EV — these new rules don’t apply to you. But you may qualify for other new subsidies. We get into those below.
And even if you are in that first category, you may discover it’s much cheaper to lease a new EV instead of buying it outright. We get into why below, too.
They completely change how the United States approaches the EV industry.
During the Bush and Obama administrations, the U.S. was focused mostly on getting automakers to begin to experiment with EVs. So it discounted the first 200,000 or so electric vehicles that each manufacturer sold by up to $7,500. If a company had cumulatively sold more than that number over time, as Tesla and General Motors eventually did, then the discount expired. By 2022, that had led to a peculiar situation where foreign automakers, such as Hyundai, could use the subsidy, while some of the largest American automakers couldn’t.
Now, U.S. policy is focused on two goals: (1) building up a domestic supply chain for EVs and (2) getting more EVs on the road. So the tax break is completely uncapped — any automaker can use it as many times as possible if they meet the criteria.
But many new requirements apply: Only cars that undergo final assembly in North America will qualify for any of the tax credit. Then, cars with a battery that was more than 50% made in North America will qualify for a $3,750 subsidy. And cars where at least 40% of the “critical minerals” used come from the U.S. or a country with whom we have a free-trade agreement will qualify for another $3,750 subsidy.
Those percentage-based requirements will ramp up over time. By 2029, for instance, 100% of a car’s battery and battery components must be made in North America.
Because Congress said so. The Inflation Reduction Act, which Democratic majorities in the House and Senate passed last year, mandated this change to the EV tax credit as part of its broad expansion of American climate policy.
Initially, fewer EVs will receive a subsidy under the new rules, Biden officials say. On a press call with reporters, a senior Treasury official argued that more cars will eventually qualify under the new rules than qualified under the old ones.
This year, at least 15 car or light trucks will receive some or all of the credit. Only some of those vehicles will qualify for the full $7,500 tax credit; some will qualify for a partial $3,750 tax credit. Here is the full list of qualifying models, along with the amount of the tax credit that they will earn:
• Audi Q5 TFSI e Quattro PHEV ($3,750)
• Cadillac LYRIQ ($7,500)
• Chevrolet Bolt ($7,500)
• Chevrolet Bolt EUV ($7,500)
• Chrysler Pacifica PHEV ($7,500)
• Ford Escape Plug-in Hybrid ($3,750)
• Ford F-150 Lightning, Standard & Extended Range ($7,500)
• Jeep Wrangler PHEV 4xe ($3,750)
• Jeep Grand Cherokee PHEV 4xe ($3,750)
• Lincoln Corsair Grand Touring ($3,750)
• Rivian R1S, Dual Large & Quad Large ($3,750)
• Rivian R1T, Dual Large, Dual Max, & Quad Large ($3,750)
• Tesla Model X Long Range ($7,500)
• Tesla Model 3 Performance ($7,500)
• Tesla Model 3 Long Range AWD ($3,500)
• Tesla Model Y AWD, Rear-Wheel Drive, & Performance ($7,500)
• Volkswagen ID.4 AWD PRO, PRO, S, & Standard ($7,500)
Some vehicles that earned the full tax credit in 2023, such as the Ford Mustang Mach E, don’t qualify for any benefit as of January 2, 2024.
Yes. A few examples: The Hummer EV, which costs more than $110,000 a piece, won’t qualify for either the new or old tax credit — it’s too expensive. And the Polestar 2 won’t qualify because it’s assembled in China.
Yes. Starting this year, the U.S. is preventing cars that receive too much manufacturing input from a “foreign entity of concern” — that is, China — from qualifying for any of the tax credit. This has reduced the number of vehicles that qualify for the $7,500 bonus.
This year, the government will also allow buyers to refund their EV tax credit at the dealership. That means buyers can now get up to a $7,500 discount at the moment when they buy their car instead of waiting until they file their taxes in the following year.
Yes. A married couple must have an adjusted gross income of less than $300,000 a year, and a single filer must have an AGI of less than $150,000 a year, to qualify for any aspect of the subsidy. A head-of-household must have an income of less than $225,000 a year.
Yes. Under the proposed rule, cars must have an MSRP below $55,000 to qualify for the credit. Vans, pickup trucks, and SUVs must have an MSRP below $80,000.
Yes. The Inflation Reduction Act also included a new $7,500 tax credit for EVs used for any commercial purpose. The Treasury Department is expected to interpret that provision to cover leasing, but it hasn’t announced the guidelines for that rule yet, so we don’t know for sure.
But the provision will probably tilt new EV drivers toward leasing their car rather than buying it outright, because the dealer should — emphasis on should — offer relative discounts on leasing vehicles as compared to buying them.
Yes. There’s also a new $4,000 tax credit for buying a used EV that costs $25,000 or less. It went into effect on January 1, 2023, so you can go ahead and use it today.
But note that it has even stricter income limits: Married couples can only take advantage of it if they make $150,000 or less, and other filers if they make $75,000 or less.
Here’s the list of cars that qualified for the $7,500 tax credit before April 18, 2023, according to the Department of Energy.
• Audi Q5 TFSI e Quattro (PHEV)
• BMW 330e *
• BMW X5 xDrive45e**
• Cadillac Lyriq
• Chevrolet Bolt
• Chevrolet Bolt EUV
• Chevrolet Silverado EV
• Chrysler Pacifica PHEV
• Ford E-Transit
• Ford Escape Plug-In Hybrid *
• Ford F-150 Lightning
• Ford Mustang Mach-E
• Genesis Electrified GV70
• Jeep Grand Cherokee 4xe
• Jeep Wrangler 4xe
• Lincoln Aviator Grand Touring *
• Lincoln Corsair Grand Touring *
• Nissan Leaf
• Nissan Leaf (S, SL, SV, and Plus models)
• Rivian R1S
• Rivian R1T
• Tesla Model 3 Long Range
• Tesla Model 3 Performance
• Tesla Model 3 RWD
• Tesla Model Y All-Wheel Drive
• Tesla Model Y Long Range
• Tesla Model Y Performance
• Volkswagen ID.4
• Volkswagen ID.4 AWD, Pro, and S models
• Volvo S60 PHEV *
• Volvo S60 Extended Range
• Volvo S60 T8 Recharge (Extended Range)
* These cars don’t qualify for the full $7,500 subsidy, although they all receive at least a $5,400 tax credit.
** Only some BMW X5 xDrive45e vehicles qualify — it depends where the car was made. Check the VIN or ask the dealership to confirm it was made in North America before buying.
This story was originally published on March 31, 2023. It was last updated on March 5, 2024, at 10:00 a.m. ET.
Get the best of Heatmap delivered to your inbox:
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
The energy sector — including oil and gas — and manufacturing took some heavy hits in the latest jobs report.
We got a much better sense of what the American labor market is doing today. And the news was not good.
The economy added only 22,000 jobs last month, far fewer than economists had predicted, according to a new release from the Bureau of Labor Statistics. The new data also shows that the economy gained slightly more jobs in July than we thought at the time, but that it actually lost 13,000 jobs in June — making that month the first since 2020 to see a true decline in U.S. employment.
The unemployment rate now stands at 4.3%, one tenth of a percent higher than it was last month. All in all, the American labor market has been frozen since President Trump declared “Liberation Day” and announced a bevy of new tariffs in April.
On the one hand, some aspects of that job loss shouldn’t be a surprise. As we’ve covered at Heatmap, the Trump administration has spent the past few months attacking the wind, solar, and electric vehicle industries. It has yanked subsidies from new electricity generation, rewritten rules on the fly, and waged an all-out regulatory war on offshore wind farms. Electricity costs are rising nationwide, constraining essentially all power-dependent industries except artificial intelligence.
In short: The news hasn’t been good for the transition industries. But what’s notable in this report is that the job declines are not limited to these green industries. The first eight months of Donald Trump’s presidency have been more and more damaging for the blue collar fields and heavy industries that he promised to help.
For instance: Mining, quarrying, and oil extraction lost 6,000 jobs in August. These losses were led by the oil and gas industry, as well as mining support companies. Other industries — such as coal mining firms — saw essentially no growth or very slightly declines.
More cuts are likely to come soon for the fossil fuel industry. The oil giant ConocoPhillips says it will lay off about a quarter of its roughly 13,000-person workforce before the year is out. The oilfield services company Halliburton has also been shedding workers in recent weeks, according to Reuters. The West Texas benchmark oil price has lost nearly $10 since the year began, and is now hovering around $62. That’s roughly the average breakeven price for drilling new wells in the Permian Basin.
The manufacturing industry has lost 78,000 jobs since the year began. In the past month, it shed jobs almost as fast as the federal government, which has deliberately culled its workforce, as the economic analyst Mike Konczal observed.
This manufacturing weakness is also showing up in corporate earnings. John Deere, the American farm equipment maker, has seen its income degrade through the year. It estimates that Trump’s steel and aluminum tariffs will cost the company $600 million in 2025, and it recently laid off several hundred workers in the Midwest.
Even industries that have previously shown some resilience — and that benefited from the AI boom — have started to stall out a bit. The utility industry lost about 1,000 jobs last month, on a seasonally adjusted basis, according to the new data. (At the same time, the number of non-managerial utility workers slightly increased.) The utility sector has still gained more than 6,000 jobs compared to a year ago.
A few months ago, I quipped that you could call President Trump “Degrowth Donald” because his tax and trade policies seemed intent on raising prices and killing the carbon-intensive sectors of the American economy. (Of course, Trump was doing plenty that radical climate activists didn’t want to see, too, and his anti-renewable campaign has only gotten worse.) Now we’re seeing the president’s anti-growth policies bear fruit. It was a joke then. Now it’s just sad.
Trump’s enthusiasm for the space has proved contagious — building on what Biden started.
It’s become a well-known adage in energy circles that “critical minerals are the new oil.” As the world pushes — haltingly but persistently — toward decarbonization and electrification, minerals such as lithium, nickel, and copper have only risen in their strategic importance.
These elements are geographically concentrated, largely in spots with weighty implications for geopolitics and national security — lithium largely in South America and Australia, copper in South America, nickel in Indonesia, cobalt in the Democratic Republic of the Congo, and graphite in China. They’re also subject to volatile price swings and dependent on vast infrastructure to get them out of the ground. But without them, there are no batteries, no magnets, no photovoltaic cells, no semiconductors, no electrical wiring. It is no surprise, then, that it’s already been a big year for investment.
Sector-wide data is scarce, but the announcements are plentiful. Some of the biggest wins so far this year include the AI minerals discovery company Kobold, which closed a colossal $537 million funding round, software-driven mining developer Mariana Minerals landing $85 million in investment, rare earth magnet startup Vulcan Minerals raising $65 million, and minerals recycling company Cyclic Materials announcing plans for a commercial plant in Canada.
“The good investments are still the good investments,” Joe Goodman, co-founder and managing partner at the firm VoLo Earth Ventures, told me. “But I think the return opportunities are larger now.” VoLo’s primary bets include Magrathea, which has an electrolysis-based process to produce pure magnesium from seawater and brines and is reportedly in discussions to form a $100 million partnership for a commercial-scale demonstration plant, as well as Nth Cycle, which recovers and refines critical minerals from sources such as industrial waste and low-grade ores and is well into its first full year of commercial operations.
Much of this activity has been catalyzed by the Trump administration’s enthusiasm for critical minerals. The president has issued executive orders aimed at increasing and expediting domestic minerals production in the name of national defense, and a few weeks ago, announced its intent to issue nearly $1 billion in funding aimed at scaling every stage of the critical minerals supply chain, from mining and processing to manufacturing. As Energy Secretary Chris Wright said at the time, “For too long, the United States has relied on foreign actors to supply and process the critical materials that are essential to modern life and our national security.”
Ironically, the Trump administration is building on a foundation laid by former President Biden as part of his administration’s efforts to decarbonize the economy and expedite the energy transition. In 2022, Biden invoked the Defense Production Act to give the federal government more leeway to support domestic extraction, refining, and recycling of minerals. It also invested billions of dollars from the previous year’s Bipartisan Infrastructure Law to secure a “Made In America supply chain for critical minerals.” These initiatives helped catalyze $120 billion in private sector investments, the administration said.
While they were “motivated by radically different ideologies,” Goodman told me, the message is the same: “We care a lot about our minerals.” As he put it, “The last two administrations could not have been better orchestrated to send that message to public markets.”
Ultimately, political motivations matter far less than cash. In that vein, many companies and venture capitalists are now aligning with the current administration’s priorities. As the venture firm Andreessen Horowitz noted in an article titled “It’s Time to Mine: Securing Critical Minerals,” an F-35 fighter jet requires 920 pounds of rare earth elements, a Navy missile destroyer needs 5,200 pounds, and a nuclear-powered submarine take a whopping 9,200 pounds. Rare earths — a group of metals that form a key subset of critical minerals — are crucial components of the high-performance magnets, precision electronics, and sensors these defense systems rely on.
The military is also certainly interested in energy storage systems, including novel battery chemistries with potential to be more efficient and cost effective than the status quo. This just so happens to be the realm of many a lucrative startup, from Form Energy’s iron-air batteries to Lyten’s bet on lithium-sulfur and Peak Energy’s sodium-ion chemistry.
The Army has also gone all in on microgrids, frequently building installations that rely on solar plus storage. And batteries for use in drones, cargo planes and tactical vehicles are often simply the most practical option, given that they can operate in near silence and reduce vulnerabilities associated with refueling. “It’s much easier to get electricity into contested logistics than it is to get hydrocarbons,” Duncan Turner, a general partner at the venture capital firm SOSV, told me.
Turner has overseen the firm’s investments in minerals companies across the supply chain, a number of which focus on the extraction or refining of just one or a few minerals. For example, SOSV’s portfolio company Still Bright is developing an electrochemical process to extract copper from both high-grade ores as well as mining waste, replacing traditional copper smelting methods. The minerals recycling company XEra Energy is initially focused on reclaiming nickel from ore concentrates and used batteries, though it plans to expand into other battery materials, as well, while the metal recycling company Biometallica is developing a process to recover palladium, platinum, and rhodium from e-waste.
These startups could theoretically use their tech to go after a whole host of minerals, but Turner explained that many find the most lucrative strategy is to fine tune their processes for certain minerals in particular. “That is just a telltale sign of maturity in the market,” he told me, as companies identify their sweet spot and carve out a profitable niche.
Clea Kolster, the head of science at Lowercarbon Capital, was bullish on the potential for critical minerals investments well before the Trump administration shifted the conversation toward their role in the defense sector. “Our view was always that demand for these minerals was just going to increase,” she told me. “This administration has certainly provided a boon and validator for our thesis, but these investments were made on the basis that these would render metal production cheaper and more accessible.”
Lowercarbon was an early investor in the well-capitalized startup Lilac Solutions, first backing the company’s pursuit of a more efficient and sustainable method of lithium brine extraction in early 2020. Since then, Lilac has raised hundreds of millions in additional funding rounds — which Lowercarbon has led — and is now seeking additional capital as it plans for its first commercial lithium production plant in Utah. Lilac isn’t the firm’s only lithium bet — it’s also backing Lithios, a company developing an electrochemical method for separating lithium from brines, and Novalith, which is working on a carbon-negative process for extracting lithium from hard rock without the use of environmentally damaging acids.
Kolster admitted that in Lowercarbon’s early days, the firm “didn’t fully appreciate how significant those additional narratives would become beyond decarbonization,” pointing to critical minerals’ newly prominent role not just in defense, but also in the AI arms race. After all, no new transmission lines, transformers, gear to turn circuits on and off, or other critical grid components can be built or scaled to support the rising electricity demands of data centers without critical minerals.
Goodman told me that some generalist investors have yet to take note of this, however. “There’s large pockets of the investment community who feel like climate is out of the rotation,” he said.
“So in a way we’re experiencing a better pricing opportunity right now, access to higher quality deals.”
From here on out, he predicts we’ll see a steady stream of announcements signaling that the U.S. has secured yet another link in the minerals supply chain, which will be crucial to counter China’s global influence. “I think annually you’ll be seeing the US raise the flag and declare success on another mineral,” Goodman told me. “It might be two years after we raise the flag that a facility is actually operational. But there's going to be a cadence to us taking back our supply chain.”
On a Justice Department crackdown, net zero’s costs, and Democrats’ nuclear fears
Current conditions: Hurricane Lorena, a Category 1 storm, is threatening Mexico and the Southwestern U.S. with flooding and 80 mile-per-hour winds • In the Pacific, Hurricane Kiko strengthened to a Category 4 storm as it heads toward Hawaii • South Africa’s Northern Cape is facing extremely high fire risks.
The owners of Revolution Wind are fighting back against the stop-work order from President Donald Trump that halted construction on the offshore wind project off the coast of Rhode Island last month. On Thursday, Orsted and Skyborn Renewables filed a complaint in the U.S. District Court for the District of Columbia, accusing the Trump administration of causing “substantial harm” to a legally permitted project that was 80% complete. The litigation claimed that the Department of the Interior’s Bureau of Ocean Energy Management “lacked legal authority for the stop-work order and that the stop-work order’s stated basis violated applicable law.”
“Revolution Wind secured all required federal and state permits in 2023, following reviews that began more than nine years ago,” the companies said in a press release. “Revolution Wind has spent and committed billions of dollars in reliance upon this fulsome review process.” The states of Rhode Island and Connecticut filed a similar complaint on Thursday in the U.S. District Court for the District of Rhode Island, seeking to “restore the rule of law, protect their energy and economic interests, and ensure that the federal government honors its commitments.” Analysts didn’t expect the order to hold, as Heatmap’s Matthew Zeitlin reported last month, though the cost to the project’s owners was likely to rise. As I have reported repeatedly in this newsletter over the past few weeks, the Trump administration is enlisting at least half a dozen agencies in a widening attack meant to eliminate a generating technology that is rapidly growing overseas.
After the cleanup in Altadena, California.Mario Tama/Getty Images
The Department of Justice sued South California Edison on Thursday for $77 million in damages, accusing the utility of negligence that caused two deadly wildfires. Federal prosecutors in California alleged the utility failed to maintain infrastructure that ultimately sparked the Eaton fire in January, and the 2022 Fairview fire in Riverside County, The Wall Street Journal reported. The fires collectively killed about two dozen people and charred more than 42,000 acres of land. “Hardworking Californians should not pick up the tab for Edison’s negligence,” said Bill Essayli, the acting U.S. Attorney for California’s Central District, where the lawsuit was filed.
Get Heatmap AM directly in your inbox every morning:
It sure sounds like a lot of money. In a new research note released this week, the energy consultancy BloombergNEF calculated the total cost to transition the global economy off unmitigated fossil fuels by 2050 at $304 trillion. But that’s only 9% above the cost of continuing to develop worldwide energy systems on economics alone, which would result in 2.6 degrees Celsius of global warming. That margin is relatively narrow because the operating costs of cleaner technologies such as electric vehicles and renewable power generators are lower than the cost of fuel in the long term. The calculation also doesn’t account for the savings from avoided climate disasters in a net-zero scenario that halts the planet’s temperature spike at 1.7 degrees Celsius. While the cost of investing in renewables, grid infrastructure, electric vehicles, and carbon capture technology would add $45 trillion in additional investment, it’s ultimately offset by $19 trillion in annual savings from making the switch.
Microsoft has signed a series of deals that tighten the tech giant’s grip on the nascent carbon removal market. With new agreements that involve direct air capture in North American and burning garbage for energy in Oslo, Microsoft now accounts for 80% of all credits ever purchased from tech-based carbon removal projects. The company made up 92% of purchases in the first half of this year, the Financial Times reported, citing the data provider AlliedOffsets. By comparison, Amazon made up 0.7% of the market and Google comprised 1.4%.
We are still far from where carbon removal needs to be to make an impact on emissions. All the Paris Agreement-consistent scenarios modeled in the scientific literature require removing between 4 billion and 6 billion metric tons of carbon per year by 2035, and between 6 billion and 10 billion metric tons by 2050, as Heatmap’s Emily Pontecorvo wrote recently. “For context, they estimate that the world currently removes about 2 billion metric tons of carbon per year over and above what the Earth would naturally absorb without human interference.”
At a hearing before the Senate Environment and Public Works Committee, the two Democrats left on the Nuclear Regulatory Commission told Congress they feared Trump would fire them if they raised safety concerns about new reactors. Matthew Marzano said the “NRC would not license a reactor” that didn’t pass safety standards, but that it’s a “possibility” the White House would oust him for withholding approval. “I think on any given day, I could be fired by the administration for reasons unknown,” Crowell told lawmakers, according to a write-up of the hearing in E&E News.
Hitachi Energy announced more than $1 billion in investments to expand manufacturing of electrical grid infrastructure in the U.S. That includes about $457 million for a new large power transformer facility in Virginia. “Power transformers are a linchpin technology for a robust and reliable electric grid and winning the AI race,” Andreas Schierenbeck, chief executive of Hitachi Energy, said in a press release. “Bringing production of large power transformers to the U.S. is critical to building a strong domestic supply chain for the U.S. economy and reducing production bottlenecks, which is essential as demand for these transformers across the economy is surging.”