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It isn’t just bad vibes: Electric vehicle sales are slumping in the United States. Fewer than 300,000 EVs were sold nationwide during the first three months of 2024 — although it could be more than 350,000, depending on how you count and whose data you trust. That’s a slight decline from last quarter at a time when EV sales need to be accelerating.
What caused the slump, and what can be done about it? And could hybrids or plug-in hybrids help solve the problem? In this week’s episode, Rob and Jesse chat with Corey Cantor, an EV analyst at BloombergNEF. They talk about Tesla’s spiraling problems, whether Detroit can pull its EV strategy together, and whether plug-in hybrids can co-exist with a climate strategy. Shift Key is hosted by Robinson Meyer, executive editor of Heatmap, and Jesse Jenkins, a Princeton professor of energy systems engineering.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: The PHEV story is really interesting here, and the hybrid story is interesting here, because three years ago, four years ago, Toyota was talking about how hybrids and plug-in hybrids were going to be the bridge for consumers. And what we have seen is that plug-in hybrid and hybrid sales have increased.
Now, what’s funny is that Toyota has actually not really been selling those plug-in hybrids. It’s like a Stellantis story, right? It’s Jeep. Ford sells a very expensive plug-in hybrid. Toyota actually doesn’t sell plug-in hybrids. In fact, if Toyota made more plug-in hybrids, if they made more Prius Primes, this amazing-looking recent car for them — it’s a plug-in hybrid — then they would sell them. But they don’t make enough. So Toyota has kind of won this discursive cycle, but not actually made the plug-in hybrids that they were advocating for, you know, two or three years ago.
Jesse Jenkins: Yeah. I mean, if you look at the numbers, about half of all the plug-in hybrids sold are Stellantis vehicles, right? Across the Jeep, Chrysler, Dodge, and Alfa Romeo brands, they don’t sell hybrids. They only sell plug-in hybrids. And they also don’t sell any, BEVs yet, either. They’re coming, later than the end of this year, probably, their first U.S. battery electric vehicle.
So, you know, Stellantis’ only offerings right now are a set of plug-in hybrids, and they’ve been selling them very effectively, partly because I think the tax credits from the Inflation Reduction Act make them very competitively priced relative to the conventional Jeep or, Chrysler Pacifica minivan, or whatever else you’re looking at in the market. Why not get the plug-in hybrid, even if you don’t plug it in?
But if you look at it, so they’ve sold about 46,000 plug-in hybrids in the first quarter of the year. Toyota, who talks about it more than anybody, only sold 11,600. So they sold like a quarter as many as Stellantis did —
Meyer: Which is so crazy because also, the Toyota plug-in hybrids are great. They’re awesome cars. They should be making more of them!
Jenkins: Yes, they should be selling 50,000 of them a quarter.
Meyer: Yeah, exactly. But they treat them — it’s so funny. The Toyota plug-in hybrids are central to the Toyota argument, and then they treat them like compliance cars. They don't make enough, even though they’re like, this is what consumers want.
And it’s funny: They were right. That is seemingly what consumers want. And it does seem like the availability of BEVs has like defanged plug-in hybrids and hybrids for consumers in a way that maybe we didn’t expect. Toyota’s not making them. It’s like they won the discourse cycle, but they’re not actually selling vehicles.
Jenkins: Yeah. I mean, Toyota Group and Honda are really the undisputed kings or queens of hybrid electric vehicles. They sell far more than anybody else. But on the plug-in side, Stellantis is the No. 1 by far. They’re like half of the market, just themselves.
Corey Cantor: I was just going to say, to Rob’s point on just how much better the Toyota plug-in hybrids are, they’re getting 40-mile electric range between the Prius Prime and the RAV4 Prime — which by the way: RAV4, Model Y, you could have a RAV4 Prime-Model Y-off every quarter if Toyota was selling enough of those.
For those Stellantis PHEVs, the other one that’s big is the Chrysler Pacifica minivan, which, I know how much you guys love your minivans, here. Those are in the low 20-mileage. So what you’ve seen policymakers in California advocate for is really going towards a 50-mile minimum to begin to count PHEVs in what's called Advanced Clean Cars II. Which, in the kind of conventional popular media is often referred to as California’s ban of gas cars, which actually isn’t a ban of gas cars because even in 2035, you could sell 20% PHEVs if they meet a 50-mile electric range minimum.
My hope, from a climate standpoint, is if PHEVs are going to be a part of the story — and again, data-wise, they’re just not in the U.S. In some European countries ... or BYD, for example, you see 50-50 split between BEV and PHEV. Here, it’s remained 80-20.
Just better PHEVs — just automakers delivering better PHEVs with 40[-mile] all-electric range, or 50[-mile]. I do think Hyundai and Kia might move in that direction, where they’re delivering those better PHEVs over time. But not to just take the, kind of, spin on them, and just say, wow, because Toyota or whatever automaker says PHEVs are great, that consumers should buy them. The PHEVs now just aren’t as good as they should be, and they can be better, and automakers can still make a profit off of it.
It’s one of those big myths, where it’s like, you see so many people say, “Have you considered a PHEV?” And it’s like, which PHEV? Because it’s really just the Jeep Wrangler and the Pacifica.
This episode of Shift Key is sponsored by…
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Music for Shift Key is by Adam Kromelow.
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On the budget debate, MethaneSAT’s untimely demise, and Nvidia
Current conditions: The northwestern U.S. faces “above average significant wildfire potential” for July • A month’s worth of rain fell over just 12 hours in China’s Hubei province, forcing evacuations • The top floor of the Eiffel Tower is closed today due to extreme heat.
The Senate finally passed its version of Trump’s One Big Beautiful Bill Act Tuesday morning, sending the tax package back to the House in hopes of delivering it to Trump by the July 4 holiday. The excise tax on renewables that had been stuffed into the bill over the weekend was removed after Senator Lisa Murkowski of Alaska struck a deal with the Senate leadership designed to secure her vote. In her piece examining exactly what’s in the bill, Heatmap’s Emily Pontecorvo explains that even without the excise tax, the bill would “gum up the works for clean energy projects across the spectrum due to new phase-out schedules for tax credits and fast-approaching deadlines to meet complex foreign sourcing rules.” Debate on the legislation begins on the House floor today. House Speaker Mike Johnson has said he doesn’t like the legislation, and a handful of other Republicans have already signaled they won’t vote for it.
The Environmental Protection Agency this week sent the White House a proposal that is expected to severely weaken the federal government’s ability to rein in planet-warming pollution. Details of the proposal, titled “Greenhouse Gas Endangerment Finding and Motor Vehicle Reconsideration,” aren’t clear yet, but EPA Administrator Lee Zeldin has reportedly been urging the Trump administration to repeal the 2009 “endangerment finding,” which explicitly identified greenhouse gases as a public health threat and gave the EPA the authority to regulate them. Striking down that finding would “free EPA from the legal obligation to regulate climate pollution from most sources, including power plants, cars and trucks, and virtually any other source,” wrote Alex Guillén at Politico. The title of the proposal suggests it aims to roll back EPA tailpipe emissions standards, as well.
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So long, MethaneSAT, we hardly knew ye. The Environmental Defense Fund said Tuesday that it had lost contact with its $88 million methane-detecting satellite, and that the spacecraft was “likely not recoverable.” The team is still trying to figure out exactly what happened. MethaneSAT launched into orbit last March and was collecting data about methane pollution from global fossil fuel infrastructure. “Thanks to MethaneSAT, we have gained critical insight about the distribution and volume of methane being released from oil and gas production areas,” EDF said. “We have also developed an unprecedented capability to interpret the measurements from space and translate them into volumes of methane released. This capacity will be valuable to other missions.“ The good news is that MethaneSAT was far from the only methane-tracking satellite in orbit.
Nvidia is backing a D.C.-based startup called Emerald AI that “enables AI data centers to flexibly adjust their power consumption from the electricity grid on demand.” Its goal is to make the grid more reliable while still meeting the growing energy demands of AI computing. The startup emerged from stealth this week with a $24.5 million seed round led by Radical Ventures and including funding from Nvidia. Emerald AI’s platform “acts as a smart mediator between the grid and a data center,” Nvidia explains. A field test of the software during a grid stress event in Phoenix, Arizona, demonstrated a 25% reduction in the energy consumption of AI workloads over three hours. “Renewable energy, which is intermittent and variable, is easier to add to a grid if that grid has lots of shock absorbers that can shift with changes in power supply,” said Ayse Coskun, Emerald AI’s chief scientist and a professor at Boston University. “Data centers can become some of those shock absorbers.”
In case you missed it: California Governor Gavin Newsom on Monday rolled back the state’s landmark Environmental Quality Act. The law, which had been in place since 1970, required environmental reviews for construction projects and had become a target for those looking to alleviate the state’s housing crisis. The change “means most urban developers will no longer have to study, predict, and mitigate the ways that new housing might affect local traffic, air pollution, flora and fauna, noise levels, groundwater quality, and objects of historic or archeological significance,” explainedCal Matters. On the other hand, it could also mean that much-needed housing projects get approved more quickly.
Tesla is expected to report its Q2 deliveries today, and analysts are projecting a year-over-year drop somewhere from 11% to 13%.
Jesse teaches Rob the basics of energy, power, and what it all has to do with the grid.
What is the difference between energy and power? How does the power grid work? And what’s the difference between a megawatt and a megawatt-hour?
On this week’s episode, we answer those questions and many, many more. This is the start of a new series: Shift Key Summer School. It’s a series of introductory “lecture conversations” meant to cover the basics of energy and the power grid for listeners of every experience level and background. In less than an hour, we try to get you up to speed on how to think about energy, power, horsepower, volts, amps, and what uses (approximately) 1 watt-hour, 1 kilowatt-hour, 1 megawatt-hour, and 1 gigawatt-hour.
Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Jesse Jenkins: Let’s start with the joule. The joule is the SI unit for both work and energy. And the basic definition of energy is the ability to do work — not work in a job, but like work in the physics sense, meaning we are moving or displacing an object around. So a joule is defined as 1 newton-meter, among other things. It has an electrical equivalent, too. A newton is a unit of force, and force is accelerating a mass, from basic physics, over some distance in this case. So 1 meter of distance.
So we can break that down further, right? And we can describe the newton as 1 kilogram accelerated at 1 meter per second, squared. And then the work part is over a distance of one meter. So that kind of gives us a sense of something you feel. A kilogram, right, that’s 2.2 pounds. I don’t know, it’s like … I’m trying to think of something in my life that weighs a kilogram. Rob, can you think of something? A couple pounds of food, I guess. A liter of water weighs a kilogram by definition, as well. So if you’ve got like a liter bottle of soda, there’s your kilogram.
Then I want to move it over a meter. So I have a distance I’m displacing it. And then the question is, how fast do I want to do that? How quickly do I want to accelerate that movement? And that’s the acceleration part. And so from there, you kind of get a physical sense of this. If something requires more energy, if I’m moving more mass around, or if I’m moving that mass over a longer distance — 1 meter versus 100 meters versus a kilometer, right? — or if I want to accelerate that mass faster over that distance, so zero to 60 in three seconds versus zero to 60 in 10 seconds in your car, that’s going to take more energy.
Robinson Meyer: I am looking up what weighs … Oh, here we go: A 13-inch MacBook Air weighs about, a little more than a kilogram.
Jenkins: So your laptop. If you want to throw your laptop over a meter, accelerating at a pace of 1 meter per second, squared …
Meyer: That’s about a joule.
Jenkins: … that’s about a joule.
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This episode of Shift Key is sponsored by …
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Music for Shift Key is by Adam Kromelow.
If the Senate reconciliation bill gets enacted as written, you’ve got about 92 days left to seal the deal.
If you were thinking about buying or leasing an electric vehicle at some point, you should probably get on it like, right now. Because while it is not guaranteed that the House will approve the budget reconciliation bill that cleared the Senate Tuesday, it is highly likely. Assuming the bill as it’s currently written becomes law, EV tax credits will be gone as of October 1.
The Senate bill guts the subsidies for consumer purchases of electric vehicles, a longstanding goal of the Trump administration. Specifically, it would scrap the 30D tax credit by September 30 of this year, a harsher cut-off than the version of the bill that passed the House, which would have axed the credit by the end of 2025 except for automakers that had sold fewer than 200,000 electric vehicles. The credit as it exists now is worth up to $7,500 for cars with an MSRP below $55,000 (and trucks and sports utility vehicles under $80,000), and, under the Inflation Reduction Act, would have lasted through the end of 2032. The Senate bill also axes the $4,000 used EV tax credit at the end of September.
“Long story short, the credits under the current legislation are only going to be on the books through the end of September,” Corey Cantor, the research director of the Zero Emission Transportation Association, told me. “Now is definitely a good time, if you’re interested in an EV, to look at the market.”
The Senate applied the same strict timeline to credits for clean commercial vehicles, both new and used. For home EV chargers, the tax credit will now expire at the end of June next year.
While EVs were on the road well before the 2022 passage of the Inflation Reduction Act, what the new tax credit did was help build out a truly domestic electric vehicle market, Cantor said. “You have a bunch of refreshed EV models from major automakers,” Cantor told me, including “more affordable models in different segments, and many of them qualify for the credit.”
These include cars produceddomestically by Kia,Hyundai, and Chevrolet. But of course, the biggest winner from the credit is Tesla, whose Model Y was the best-selling car in the world in 2023.
Tesla shares were down over 5.5% in Tuesday afternoon trading, though not just because of Congress. JPMorgan also released an analyst report Monday arguing that the decline in sales seen in the first quarter would accelerate in the second quarter. President Trump, with whom Tesla CEO Elon Musk had an extremely public falling out last month, suggested on social media Monday night that the government efficiency department Musk himself formerly led should “take a good, hard, look” at the subsidies Musk receives across his many businesses. Trump also said that he would “take a look” at Musk’s United States citizenship in response to reporters’ questions about it.
Cantor told me that he expects a surge of consumer attention to the EV market if the bill passes in its current form. “You’ve seen more customers pull their purchase ahead” when subsidies cut-offs are imminent, he said.
But overall, the end of the subsidy is likely to reduce EV sales from their previously expected levels.
Harvard researchers have estimated that the termination of the EV tax credit “would cut the EV share of new vehicle sales in 2030 by 6.0 percentage points,” from 48% of new sales by 2030 to 42%. Combined with other Trump initiatives such as terminating the National Electric Vehicle Infrastructure program for publicly funded chargers (currently being litigated) and eliminating California’s waiver under the Clean Air Act that allowed it to set tighter vehicle emissions standards, the share of new car sales that are electric could fall to 32% in 2030.
But not all government support for electric vehicles will end by October 1, even if the bill gets the president’s signature in its current form.
“It’s important for consumers to know there are many states that offer subsidies, such as New York, and Colorado,” Cantor told me. That also goes for California, New Jersey, Nevada, and New Mexico. You can find the full list here.
Editor’s note: This story has been edited to include a higher cost limit for trucks and SUVs.