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The president isn’t trying to cut emissions as fast possible. He’s doing something else.

Here’s the problem with President Joe Biden’s climate policy: From a certain point of view, it makes no sense.
Take his electricity policy. At the top level, Biden has committed to eliminating greenhouse-gas pollution from the power sector by 2035. He wants to accomplish this largely by making clean energy cheaper — that’s the goal of the Inflation Reduction Act, of course — and he has also changed federal rules so it’s slightly easier to build power lines and large-scale renewable projects. He has also added teeth to that goal in the form of new Environmental Protection Agency rules cracking down on coal and natural gas.
Yet at the same time, Biden has seemingly also made it more difficult to decarbonize. Last week, he raised tariffs on cheap solar panels and grid-scale batteries made in China. And he ended the two-year “solar bridge,” a tariff exemption for some Chinese-based solar manufacturers that operated in other countries. That means that as soon as next month, some eye-watering tariffs — possibly as high as 254% — could apply to many U.S. solar imports.
Then there’s Biden’s policy on electric cars. The president wants 50% of all new vehicles sold in the U.S. to be EVs or plug-in hybrids by 2030, and he has overseen billions of dollars of spending aimed at building a national charging network. His climate law discounts the price of many EVs by $7,500 and directly subsidizes virtually every battery and vehicle made in America. Yet he recently put 100% tariffs on EV imports from China, the country that makes some of the world’s cheapest and best electric cars.
This combination is, frankly, a little confusing. And it has confounded critics around the world: It can sometimes seem like the president is cutting the cost of clean energy with one hand while raising it with another. “The Biden effect will be to raise the U.S. domestic price of EVs, solar panels and other green inputs and delay America’s energy transition,” writes Edward Luce of the Financial Times. The Economist, in high dudgeon, lectured Biden for forgetting his David Ricardo.
There is certainly much to criticize about Biden’s climate policy, but reading coverage of it, I’m often struck by how little the commentator seems to understand what the policy is trying to do. There is, as Noah Smith and Matt Yglesias have written, a strong national-security component to the tariffs announced last week. But there’s more to these policies than national security alone. Although the president’s actions can sometimes seem contradictory, there is in fact a logic to what Biden is trying to do on climate change. And without defending the policy, I think it is important to describe it accurately.
Let’s back up. For the past 30 years, climate advocates tried to raise the cost of fossil fuels in America by imposing a carbon price. Taxing carbon pollution is the most elegant and economically efficient way to solve climate change, and — at least in theory — it doesn’t require the kind of fine-tuned economic tampering that the Biden administration is engaged in. Or at least that’s what the economists say — I remain skeptical that a carbon tax alone would have succeeded in decarbonizing the economy without additional policy.
And in any case, the point is moot: Climate advocates never succeeded in passing such a price. Voters were understandably resistant to raising the cost of energy, especially gasoline, and no coalition emerged to persuade politicians that the political costs of a carbon tax would be worth bearing. During many of those years, too, the American economy was so understimulated that passing a revenue-raising tax made little political sense: There was effectively no public constituency for deficit reduction.
By 2020, Democrats had largely given up on this approach. Although many still believe that a carbon tax could be an effective decarbonization tool, they instead adopted a new political economic philosophy. Simplified somewhat, it goes something like:
1. The biggest obstacle to passing American climate policy is the lack of a domestic coalition that supports the deep and continued decarbonization of the domestic economy.
2. Passing climate policy has been so hard historically because a powerful and geographically diverse set of companies, unions, state, and local officials, and political donors — largely but not entirely in the fossil fuel industry — don’t want to see the U.S. move away from oil and natural gas. They’re backed up by status-quo-favoring consumers.
3. The central aim of near-term climate policy, then, should be to create an enduring coalition to support the continued decarbonization of the U.S. economy.
This is the guiding logic of Biden’s climate policy: that American politics must have a powerful, durable, and flexible pro-decarbonization coalition if the U.S. is to succeed in reaching net zero. Achieving this coalition is the underlying aim of the IRA, the EPA rules, and — yes — the recent tariffs.
This is what I wish critics understood about the president’s climate strategy: Biden’s strategy won’t have succeeded if the U.S. makes some headway on emissions but imports all of its decarbonization tech from China. The U.S. actually has to develop its own supply chain and manufacturing base to build the kind of deep economic coalition that can sustain long-term decarbonization. This is why trade restrictions have become so central to the administration’s world view.
I should add that for all that the administration emphasizes “good-paying union jobs” in its messaging around climate policy, jobs alone aren’t necessarily the goal of this strategy. Critics of American industrial policy sometimes point out that, even in China, the labor share of manufacturing is falling; indeed, one of China’s great manufacturing advantages is the extent to which it has automated its assembly lines. But that may not necessarily matter to coalition politics: As the political scientist Nina Kelsey has shown in her research on the Montreal Protocol, companies tend to support environmental policy when doing so will help their large-scale, fixed investments — essentially, their factories — not their labor force.
There are big risks to Biden’s strategy. The next administration — which in this moment looks likely to be helmed by Donald Trump — could repeal the production and installation subsidies for renewables but leave the tariffs in place. That would devastate the finances of domestic solar manufacturers and significantly slow down the decarbonization of America’s grid, and it would mean that Americans who want to import cheap solar panels wouldn’t be able to. That would essentially freeze America’s decarbonization effort while the rest of the world races ahead.
Even if Biden wins, the kind of economic management that he’s trying to do may simply not be possible in the federal system — or, for that matter, with the existing Democratic coalition. There may be too many interest groups to placate or too many obstacles to building. California offers a warning about how well-intentioned liberal policy can prevent enough new infrastructure from getting built.
Still a third risk is that the American solar manufacturing industry meets domestic demand but doesn’t become very competitive, so it doesn’t reduce costs aggressively. A relatively small number of firms actually make solar panels in the United States, and they have to compete for engineering talent with more established industries like software. What has brought down the cost of solar in China isn’t subsidies per se, but an intensely competitive and very large domestic market. It isn’t clear that the American market for solar power will attain such scale or efficiency.
These would, obviously, be lasting setbacks for American decarbonization. But even in critiquing this set of policies, I hope the world notes what a different problem America faces when taking on climate change as compared to the rest of the world. Most countries import more oil than they produce, meaning their fossil-fuel addiction shackles their currencies and economies to a volatile global commodity. They are only too happy to move away from fossil fuels, and especially oil, provided that a cheap and acceptable alternative is available. In the United Kingdom, for instance, cross-partisan support for decarbonization policy has existed since the era of Margaret Thatcher.
In the United States, with our oil-drenched politics, the task is different. Only a sufficiently powerful pro-climate coalition will be able to unseat the fossil fuels enthroned atop our economy. Forging this coalition — even if it slows down decarbonization for a few years — is Biden’s true goal. Whether that’s worth it is another story.
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SoftBank’s error and Nvidia’s scandal suggest data centers may have already peaked as an economic and energy trend.
This is Heatmap Daily, a weekday digest written by our executive editor. Subscribe here.
Covering energy and climate change sometimes means seeing certain stories in a different light than others. And a particularly vivid hue illuminated The Wall Street Journal’s report today that the Japanese conglomerate SoftBank Group is taking a $3.7 billion loss on several gigawatts’ worth of natural gas turbines.
For the Journal, the big news is that SoftBank and its billionaire founder, Masayoshi Son, are failing to capitalize on the artificial intelligence boom. But at Heatmap, we’re thinking about the turbines.
The data center boom and the return of electricity load growth has depleted the world’s supply of natural gas turbines. SoftBank had purchased reservations for about 13 gigawatts of turbines, according to the Journal. That’s a staggering amount of electricity — it could meet New York City’s maximum power draw on the hottest part of a summer’s day. The conglomerate now seems set to dump reservations for about four gigawatts’ worth. Keeping a reservation, it turns out, really is harder than making it.
Most of those rotors were reportedly from GE Vernova, one of the world’s largest producers of gas turbines. GE Vernova’s order list for gas turbines has been filled for nearly two years and the waiting list now stretches into 2031. That has led data center developers, hungry to get power as soon as possible, to reach for ever dirtier forms of electricity generation, including diesel generators and even old jet engines.
On that front, SoftBank’s failure to sell the turbines to a higher bidder suggests (albeit weakly) that demand for energy-producing assets might not be as strong as the AI boom’s backers once thought. SoftBank was already set to send about 9 gigawatts of turbines to the enormous Trump-backed OpenAI data center in Pike County, Ohio. The roughly remaining four gigawatts will be released back their manufacturers. (One thing this news can’t quite tell us, alas, is what type of turbine set-up will be used in the Pike County facility, which will be the world’s largest gas-fired power plant if it is build to completion. Recent public filings have suggested the facility isn’t planning on using any turbines in the more efficient combined-cycle configuration, which would mean the plant’s carbon intensity will be worse than most other new natural gas plants. But we’d love to hear any tips on this front.)
To zoom out for a second, I’m struck by how the AI bubble has been replaced by an AI muddle. As I wrote this, news emerged that Nvidia is preparing to fire its CEO, Jensen Huang, for his affair with a Chinese woman who is alleged to be a spy. (He had at least one more affair with another Nvidia executive, according to The New York Times.) Under Huang’s leadership, Nvidia has invested in a sprawling and sometimes circular network of energy-related companies, including Emerald AI, a startup that helps data centers flex their electricity consumption, and Redwood Materials, a battery recycler and producer led by the former Tesla executive J.B. Straubel. Huang has used Nvidia’s enormous balance sheet to buy down the risk of other AI and AI-related companies, propelling the overall AI trade to become the biggest story in American markets.
Now that balance sheet is in peril: Nvidia’s stock is already down 11% over the past five days, and it has fallen another 8% in after-hours trading since news broke of Huang’s ouster. If the chip designer’s financial network began to fray — or even if the next CEO had a lower risk appetite than Huang — then its demise could impact a much larger set of firms.
Even before the Huang scandal broke, companies at the center of the AI trade were showing signs of weakness. Alphabet, Meta, and Microsoft are all down on the month. Nvidia was already lagging by about 10% on the month before its hebdomas horribilis began, too. The memory and chip makers Micron and Applied Materials are both down more than 25% in about the same period, and GE Vernova and Oklo have fallen nearly 20%. Although the data center company Coreweave rebounded on an earnings beat today, it’s still down 24% on the month and nearly 50% since May.
The market rout isn’t total — Anthropic seems likely to enjoy one of the largest IPOs ever in the next week (although perhaps not with quite as large a valuation as its investors once imagined). And the underlying technology of AI seems to be getting worryingly better all the time. But even though the politics of data centers and AI seem set to dominate the new Washington, I’m wondering if data centers as a mainstream economic trend might have already peaked. Americans voted for a more subdued AI boom in the midterms. Now it seems like they might get it ahead of schedule.
Lunar Energy’s latest AI-powered system aims to integrate EVs into the automated demand response mix.
In theory, it’s straightforward to assemble the smart energy home: Solar panels, home backup batteries, and electric vehicles, plus smart thermostats, heat pumps, and water heaters — all the individual pieces can be had for the homeowner who can afford the up-front cost. The challenge is getting all those pieces to talk to one another.
Bay Area-based Lunar Energy is one of the tech firms that’s been trying to crack this problem. Today, it announced an upgraded version of its artificial intelligence-powered home energy control system, which not only integrates all those separate systems but also responds tactically to energy markets. CEO Kunal Girotra told me Lunar AI saves its users money by monitoring their home 24/7 and making decisions to charge, not to charge, or discharge so that they save the most money.
“Utilities are all moving to almost-real-time changes of rates,” he said. “You need software to handle that for you. I think that the race is on for who has the best AI machine learning algorithms to save the most amount of money. And so far, we seem to have a head start.”
Lunar’s first-generation system focused on generation, storage, and control. In other words, it connected elements like a home’s rooftop solar panels with the backup battery the residents might keep in the garage, using the AI to decide when to meet the home’s real-time energy needs with solar versus grid energy versus stored power. What it didn’t have was the ability to work with electric vehicles to manage charging and use the car’s battery as a bonus source of energy.
To fix this, Lunar has built its own bidirectional EV charger — one that can charge up the battery or discharge the car’s battery for a secondary use, like backing up the home’s power supply. Girotra, formerly the head of Tesla Energy, told me the problem with that functionality to this point has been the connection point between the car and the home electrical system. Carmakers and other companies in the space didn’t have the deep experience with electrical certifications to make the process seamless, he tells me. That led to setups like the original Ford Charge Station Pro, which required several different wall-mounted electrical boxes to connect the F-150 Lightning EV to the home.
Lunar’s charger is built to connect to its customers’ existing home Lunar energy system, which includes a microgrid interconnect device they call Lunar Bridge that islands the home in case of a power outage on the grid. In that way, the power stored in the EV battery is ready to back up the home in case of a blackout without any additional work — or to be optimized as part of a fully smart home that’s making money as part of a virtual power plant.
The company’s setup allows for another fun feature: “slow” charging that’s not slow at all, but actually two or three times as fast as the Level 2 charging most EV owners use to recharge their batteries overnight. Electric cars in the U.S. can typically take on only about 11 kilowatts of AC power from one’s home because of the limitations of their on-board hardware. Because Lunar’s system is fully DC, however, Girotra said the company decided to build a DC home charger, one that — like a Tesla Supercharger or other DC fast chargers out in the world — isn’t limited by that power cap. Lunar said it could use a combination of power from the grid, home solar, or home batteries to charge an EV at up to 25 kilowatts. That’s enough to recharge an EV in three to four hours rather than six to eight.
“If the standards get high, and if everybody sees cars can get charged in three hours, then all of a sudden people are like, ‘Wow, this is how I want it,’” he said. “Especially for 25% of the users who are like me, who always are running low on charge and they don’t mind a boost every now and then.”
Some of the other improvements in the second-gen system are more incremental. An inverter that’s 40% more powerful helps Lunar get its system up to enterprise scale. That’s crucial, as the world moves toward a place where more homes and businesses employ battery backup systems. Lunar’s new batteries come in modular 5 kilowatt-hour blocks ranging from 10 kilowatt-hours to 30 kilowatt-hours in a single unit and scale up to 300 kilowatt-hours for home or small commercial use; there’s also new pad-mounted configurations with capacity up to 1 megawatt-hour.
Batteries, though, are the simple part. Everyone from EV makers like Rivian to utilities like Octopus Energy is racing to make a person’s or a business’s batteries and solar panels and electric cars work for them, using the power of AI to account for moment-to-moment changes in energy prices and supply. Lunar’s new tech makes the case that the most important element is a single brain to integrate every last smart, electrified thing in your house.
The fundraise comes on the heels of a $50 million grant from the Department of Energy.
Almost all lithium-ion batteries on the market rely on graphite for their anodes, more than 90% of which is processed in China. That concentration has created a chokepoint in the Pentagon’s supply chain as the military increasingly turns to batteries to help its transportation network operate more quietly and reduce reliance on complex refueling logistics.
So when Congress passed the latest National Defense Authorization Act at the end of 2025, barring Chinese-linked battery materials from military use starting in 2028, Coreshell saw an opening. While the California-based silicon-anode battery startup had previously focused on automakers as its beachhead customers, it’s now shipping its first battery cells to the military for use on Navy ships and Army ground vehicles. On Wednesday, Coreshell announced a $30 million Series B to scale up manufacturing operations to meet the needs of this growing customer base.
“We’re entering a new stage where we’re no longer, I would say, demand limited,” Coreshell’s CEO Jonathan Tan told me. “This year we’ve had to put on second and third shifts, work nights and weekends, just to get the product out the door.”
Coreshell sets itself apart by going a step further than the NDAA requires. The law doesn’t make suppliers trace battery materials all the way back to the mine, which would be exceedingly difficult given China’s dominance across the battery supply chain. But Coreshell has nevertheless eliminated Chinese sourcing from its anodes by replacing graphite with silicon mined and refined in the U.S. by Ferroglobe, one of its Series A investors.
Ferroglobe and global investment firm Access Industries led the latest round, with defense contractor ADS also joining as a new strategic investor. The financing comes on the heels of a $50 million Department of Energy grant that Coreshell secured in August as part of a program to strengthen the domestic battery supply chain. That funding will support the company’s first commercial-scale facility, a 2-gigawatt-hour factory.
That’s about 20 times the size of the 100-ish-megawatt-hour plant the startup had originally envisioned, as the DOE grant has allowed Coreshell to “expand much further than we were originally expecting,” according to Tan. The company is now evaluating several potential U.S. sites and expects to announce its selection early next year. For now, it relies on unnamed contract manufactures, along with its small pilot line in San Leandro, to produce its cells. But once the gigafactory gets up and running, the startup plans to bring electrode production in house by 2028, followed by full cell assembly in 2029.
Building this plant will ultimately require significant additional capital. But Tan believes this latest vote of confidence from the federal government will help Coreshell to diversify its capital stack as it continues to fundraise. “That’s one of the great things about having such a notable DOE award is that it also allows us to attract multiple forms of capital,” he told me.
Silicon has long been recognized as a promising alternative material for battery anodes, as it can store far more energy than graphite. The catch is that it tends to swell during charging, causing it to break down quickly and ultimately leading to a much shorter cycle life. Coreshell says it’s extended its anode’s lifespan by giving it a proprietary coating, which Tan told me back in April essentially means “painting the inside of your battery” with an ultra-thin protective layer.
Other companies, such as Sila Nanotechnologies and Group14 Technologies, are also working to commercialize silicon anodes. But Coreshell says many of its competitors rely on more highly engineered, expensive forms of silicon, such as silane gas. By contrast, Coreshell uses metallurgical silicon, a cheap, raw commodity already widely used in aluminum alloys. That, Tan argues, gives the company a cost advantage not only over its competitors, but potentially Chinese graphite too.
Coreshell hasn’t yet demonstrated that its cells can meet the performance demands of the automotive industry, however. When the company raised its Series A in early 2025, it said it expected its automotive cells to exceed 1,000 charge cycles while retaining 80% of their original capacity. But Tan told me many defense applications don’t require such demanding performance targets, as Navy ships and ground vehicles are “not intending to have as many miles or missions or use cases on that same battery” as a consumer EV would.
That doesn’t mean the company is abandoning its automotive ambitions. As Tan pointed out, electric vehicles remain by far the largest source of global and domestic battery demand. “It’s natural for us to obviously utilize the security supply chain first,” he told me. “That allowed us to really get to commercialization, revenue, and production faster, because automotive qualification is this longer journey. But ultimately, we want to do both of those and more.”