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How a panther habitat became a battleground for the state’s environmental groups

About 27 miles inland from Florida’s southwestern coast sit three empty swaths of land among a sea of green. This undeveloped area represents both the future of Florida’s development and the culmination of a 20 year fight between the state’s environmentalists.
“What happens here will change the face of Collier County forever,” April Olson, a researcher at the Conservancy of Southwest Florida, told me.
Home to affluent Naples and its fast-growing population of retirees, the county recently approved plans for four new villages to be built in one of Florida’s last undeveloped areas, which is sandwiched between some of the state’s biggest and most important nature reserves. The region hasn’t enjoyed official protection, per se, but it has enjoyed a special status. But with almost half a million people having moved to Florida just last year, and more on the way, the county of 300,000 inhabitants and counting has decided to keep building.
Yet if this sounds like a typical story of developers versus environmentalists, it isn’t. Instead, it has become a unique point of tension among environmental groups in Florida. While one group believes it’s their responsibility to be a part of this conversation and help manage unavoidable development, the other side believes it’s their role to fight against it.
“I’m very surprised environmentalists are taking this pragmatic approach,” said Matthew Schwartz, executive director of the South Florida Wildlands Association. “This isn’t what environmentalists do.”
The result is a rift among the guardians of Florida’s wildlife.
The environmentalists all agree on what they’re trying to protect: the panthers. From a conservation perspective, the region has acted as a corridor for the state’s remaining endangered panthers, of which there are only 120-230 adults left in the wild, to travel.
The area is surrounded by protected nature reserves. To the north is a complex of wildlife, bird sanctuaries, and wetlands; to the northeast are two different wildlife management areas, and to the south is the Florida panther national wildlife refuge, another wildlife management area that is home to bears, a state forest, a state preserve, and a national preserve that ultimately extends into the Everglades.
“This area is a mosaic of habitat types that allows the panther to live,” said Schwartz. “What they are doing essentially fragmented those complexes from one another.”
But to understand how the area has become a battleground of environmentalist groups, you’ll first have to dive into the area’s weird regulatory history.
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The villages being constructed amid this remarkably untouched land are the most recent outcome of a partnership between developers, land owners, and environmental groups. Called the Rural Lands Stewardship Area (RLSA) program, this partnership changed zoning over 20 years ago to allow for more dense development in exchange for environmental protections.
“At the end of the day, the RLSA is a compromise,” said Meredith Budd, who worked on this project when she was a policy director at the Florida Wildlife Federation. (She is now the director of external affairs for the Live Wildly Foundation.)
The RLSA was born way back in 1999, when then-Florida Governor Jeb Bush put a moratorium on development in Collier County. He claimed that urban sprawl in Naples, the state’s fastest growing city at the time, had gotten out of hand and that everyone needed to figure out a better solution for development that preserved agricultural lands and protected the environment.
When the RLSA was first discussed and proposed in 2002, most environmentalist groups, including the Conservancy of Southwest Florida, were on board. The battle that has emerged among these groups has its roots in some imprecise wording from the original proposal that almost tripled the amount of land that developers could build on.
The total area was — and still is — about 198,000 acres. Just over half of the acreage is protected nature reserves, with the rest mostly agricultural land available for development. But there’s a catch. Prior to the RLSA, the zoning only allowed for a single house, called a “ranchette,” to be built every five acres on the developable land. While some of these solitary homes exist today on farms, the majority of the area is still uninhabited, therefore serving as a wildlife corridor as well as porous land to absorb heavy rainfall or storm surges.
That’s where the RLSA was supposed to come in. Published in 2002, it proposed to change the allotment, swapping denser housing for more protected land. It indicated that 16,805 acres of the 98,000 available could be built on if developers earned allowances by restoring other land, although what would count as restoration was a little hazy. The language around these numbers was also very vague, critically leaving room to increase the amount of credits able to be earned and, subsequently, the acres developed. It ultimately increased the amount of land up for development to 45,000 acres. Many of the conservancies didn’t realize this change until the five-year review in 2007.
“We were supportive of RLSA,” said Olson. “But we believe the goals are not being met. The public was promised that 16,000 acres would be developed and that 91% of the area would be preserved.”
But those working with the RLSA think what’s done is done. “There’s no point in going back and figuring out what happened,” said Budd. “The allowable footprint is over 40,000 acres. We have to move forward and figure out whether wildlife connections can be made.”
The intent of the 1999 moratorium was to curb development for the benefit of conservation. The RLSA is still attempting to do that, but it’s a voluntary program, and much of the power lies with the landowners.
But in the past few years, Florida’s real estate market has boomed and land use planning regulations have been weakened. This combination made landowners restless to start building, more able to do so, and more impatient when it comes to making concessions to conservationists. Pro-RLSA environmentalists say playing hardball in negotiations with developers just won’t fly anymore.
“These organizations trying to save habitat by killing these programs aren’t helping, they’re making it worse,” said Elizabeth Fleming, a representative at Defenders of Wildlife, which supports the RLSA.
The four new villages, which are cumulatively known as “The Town of Big Cypress,” are only the most recent developments in the RLSA. The first, called Ave Maria, began building in 2005 but construction paused for a while after the recession. Big Cypress is one of the first cohesive plans out of the RLSA to keep building since then, but six more are in development. Though not nearly finished yet, the website for the Town of Big Cypress promises to fulfill all the expectations of the American dream. “Families strolling along storefronts with ice cream cones in hand … on-street parking for easy access to the hair salon, dog groomer, dry cleaner, and local grocer,” the website says. It promises happiness, community, convenience — even good weather and “responsible growth.”.
Today, both sides agree that no development would be the best way forward. “In a perfect world, I would love to see no more of it developed,” said Budd. “If I was Queen, I would say you no longer have property rights.”
Bradley Cornell, policy associate at the Audubon Society of the Western Everglades, helped make the RLSA a reality. “I’d much rather build a wall at the Georgia line and tell everyone to go home,” he said. “But we’re expected to get another 15 million people in Florida over the next 50 years. All of these people are moving to Florida. Where in the hell are we going to put them without ruining Florida’s nature?”
Between July 2021 and 2022, 444,500 people moved to Florida, according to the Tampa Bay Economic Council. Despite the increase in hurricanes and flooding and the decrease in affordable insurance, Florida is more popular than it has ever been.
Those in favor of the RLSA say that development is going to happen with or without them, and the RLSA allows them a platform to negotiate. “This is the best compromise we could have gotten,” Cornell said.
The primary benefit of the RLSA is that it offers a chance at higher density living with a potentially smaller ecological footprint. The pro-RLSA group, for example, has kept some developments from further encroaching on panther habitat. These conservationists have negotiated underpasses and fencing in three different areas to allow panthers and wildlife to cross roads without getting hit. They have also gotten the county to require bear proof trash cans, lowering lights to avoid light pollution, and smoke easements, which require new tenants to sign off on necessary controlled burns to maintain the environment for the panther preserve. From the Town of Big Cypress alone, the RLSA crediting system requires the developers to permanently preserve 12,000 acres. In this case, they will be restoring the hydrology of a major wetland nearby, according to Cornell.
“We’re just trying to have a seat at the table and ensure that we can get the best conservation outcomes knowing that the landowners have the rights to this land and are permitted to do whatever they want,” said Fleming.
The pro-RLSAers also pushed for more protections than they got. For 10 years, they fought for a Habitat Conservation Plan (HCP) that would have legally bound the landowners to certain conservation requirements, according to Budd. But pushback from the anti-RLSA groups slowed the process so much that eventually it wasn’t worth the landowners’ time and it was withdrawn in August 2022. Those against the RLSA had many qualms with the HCP and don’t see its withdrawal as a loss.
The other arguments against the RLSA are plentiful.
The anti-RLSA group contends that any development will harm the panthers. “This project would be the nail in the coffin of the panthers,” said Olson.
This side of the debate also thinks that the zoning rules that predated the RLSA, which previously allowed for ranchettes every five acres, were highly unlikely to practically result in development. They argue that implementing the road infrastructure required for such scattered housing would be prohibitively expensive, suggesting that if the RLSA hadn’t been proposed, this area would have been left untouched.
“It’s highly unlikely that they would come in and build five-acre ranchettes,” said Olson. “They would need thousands of miles of new roads. One new 100 mile road was calculated to cost $111 million in 2015.”
Schwartz agreed. “This is completely unpopulated, undeveloped rural land,” he said. “People don’t want to buy a swath of rural land and move into undeveloped lands.”
But pro-RLSA environmentalists think that perspective is naive. “That’s a false argument,” says Fleming. “It’s based in no reality. People are moving here and that area is the least expensive if you want to be near Naples. I see no reason why that wouldn’t continue.”
Budd added that money is not a concern in this area. “Collier County is one of the highest wealth points in the state, if not the whole country,” she said. “So to say this would be too expensive is unreasonable.”
Another area in between Naples and the RLSA, called Golden Gate Boulevard, had the same one-in-five zoning restrictions as the RLSA and has been heavily developed in the last 10 years.
The RLSA plan also does not seem to be taking the changing climate into account. According to Olson, 96% of Collier County is susceptible to storm surge. The inland parts aren’t as vulnerable, but there is still a high threat and the area’s porosity would be lost with these developments. In addition, the RLSA will experience 109 days where the heat index is above 100 degrees Fahrenheit in 2023, and 138 in 2053, according to The Washington Post’s interactive map on heat waves.
County Commissioner Bill McDaniel said that climate change was not a concern in the process of developing The Town of Big Cypress. “There are no stipulations with regard to climate change because it’s such a nebulous discussion point,” he said.
Though the commissioner agreed that many climate-friendly technologies are comparable, if not less expensive to purchase and maintain, the RLSA does not require developers to install permeable concrete, heat pumps, special shade trees for temperature, or solar panels on the houses.
“We recommended numerous policies that would encourage more energy efficient homes and appliances, improve permeability of sidewalks, require complete street designs that all users can use, ease traffic congestion, increase Florida friendly plants that require less water, include stipulations for storm water runoff, etc.” said Olson. “They just ignored it. I have not once heard the County even discuss heat issues or climate issues.”
Budd said that the choice to build inland in itself is a climate-conscious decision. “When looking at this long term and the threats of climate change, the main threat is that people will be moving inland,” she said. “Where we put the development is the most important thing.”
One of the biggest landowners in the area, named for the county’s namesake, Collier Enterprises, echoed Budd’s sentiment in emailed responses. “The Town of Big Cypress is 19 miles from the coast, similar to Babcock Ranch, which did not sustain damage from the recent Hurricane Ian, having one of the largest reported storm surges ever recorded.” He added that most of the national buildings in the area provide options for energy efficiency and smart home technology
Though both sides have very different ideas of how to be involved in development, they are both aware that development is coming to Eastern Collier County and share the same ultimate desires for the region.
“We do know that the RLSA is going to grow,” said Olson. “We know that Collier County is going to grow. We just think it could be done more sustainably.”
Environmentalists everywhere are grappling with how to best save the last bastion of the lands and animals that sustain us. Depending on which side you take in the RLSA fight, it has become a question of cynicism versus hope or pragmatism versus pipe dreams.
Those against the RLSA are still championing its original goal: to preserve the environment and to curb excessive development. “The goal of the program wasn’t to allow each and every landowner to maximize their profit to the greatest extent,” said Nicole Johnson, Director of Governmental Relations at the Conservancy of Southwest Florida.
The other side has committed to pragmatism. “At the end of the day, the dollar speaks,” said Budd. “And unfortunately it speaks louder than the voices against the project.”
As regulations recede in Florida, the RLSA disagreement signals a philosophical choice environmentalists will increasingly have to make: If we can’t beat them, should we join them?
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The EV maker appears to be poised to start construction on its second factory.
Rivian’s stock fell 18% on Monday, but it’s hard to imagine the company’s executives are too upset. Why? Because the automaker seems to be on the verge of starting work on its long-awaited second factory, 45 miles east of downtown Atlanta.
Let’s do some reading between the lines. Rivian has had a great few weeks. The EV maker announced last week that it is on track to sell about 3,000 more cars this year than expected, and its stock has been on a tear, rising more than 37% from close on June 25 to close on Monday.
The company’s CEO, RJ Scaringe, evidently decided it was time to capitalize on the run-up. The company announced on Monday evening that it would offer another 75 million shares of its stock this week, diluting existing investors. That raise would be used to fund “general corporate purposes,” according to a federal filing, including “the funding of certain equity contributions” related to an Energy Department loan.
Back in April, the company came to new terms with the Department of Energy’s in-house bank over a nearly $6.6 billion loan to build its new Georgia factory, which is supposed to manufacture the company’s new line of cheaper R2 SUV and R3 crossovers. That federal loan — initially negotiated in the Biden administration’s final days — was downsized to $4.5 billion under the new Trump-era terms, but also rewritten to let the automaker draw more money from the deal faster. (Rivian is already making the R2 at its existing factory in Normal, Illinois, but the Georgia factory should have about 40% more capacity than that plant.)
As part of any Energy Department loan — as in any project finance transaction — borrowers have to hold a certain amount of cash in escrow and reserve accounts to secure against a deal failing. Now Rivian can fund that money without tapping its cash on hand further. The new share offering is supposed to price this evening, suggesting that despite today’s slide, the company could raise more than $1 billion from the sale. Rivian’s stock is now trading roughly where it stood a month ago.
The upshot of all of this: With the loan secured, serious building efforts could finally start soon on the automaker’s second factory. (The automaker technically broke ground in September, but has yet to begin meaningful construction.)
“We’re setting up to go vertical in the second half of this year (a.k.a. steel sticking out of the ground) but we have said previously that we expect to draw on the loan for the first time by early 2027,” Peebles Squire, a Rivian spokesman, told me in an email. “Factory timeline is production of vehicles to begin in late 2028.”
(Energy Department loans work on a reimbursement basis, so the automaker will need to begin spending on the factory before it can claim the money.)
Though Rivian is among the most successful of the U.S. electric vehicle startups, it wasn’t completely clear after President Trump took office whether the automaker would survive its trek through the valley of death. It’s still not certain, of course. But positive reviews for the R2, a $6 billion deal with Volkswagen, and its significant Sun Belt factory nearing construction all augur well for the country’s most famous EV startup not run by Elon Musk.
“It’s got nothing to do with technology. It’s nothing to do with execution capability. It’s purely due to access to capital.”
Ever since Trump reentered the White House, Europe has been a safe haven for U.S. climate tech companies fleeing an increasingly hostile policy environment. Through strong carbon pricing and stable regulations, the bloc has created demand for still-experimental technologies such as green hydrogen, thermal energy storage, low-carbon building materials, and sustainable fuels.
And yet at the same time, Europe has struggled to finance many of its own climate tech startups as they enter the capital-intensive scale-up phase. What gives?
The problem is not a lack of startups or capital. European firms raised $61 billion for climate-focused funds last year, far outpacing those in the U.S., which brought in $37 billion, according to Sightline Climate. The problem is that almost all of that European money flows to infrastructure and private equity investors backing more mature technologies. Early-stage startups also enjoy relatively strong backing, but the market starves the growth-stage middle.
The issue is both cultural and structural: Most of the bloc’s investors are unaccustomed to making the high-risk, high-reward bets required to scale climate tech. They also often can’t access tools like loan and equity guarantees, which remain limited in Europe, nor are there the institutional limited partners and growth-stage co-investors that could help de-risk those investments.
“It’s got nothing to do with technology. It’s nothing to do with execution capability. It’s purely due to access to capital,” Craig Douglas, a founding partner at the Berlin-based multi-stage venture firm World Fund, told me. That means companies that have outgrown early-stage financing but are still considered too small or too risky for larger institutional investors often either shutter or seek capital abroad. Logically, if given the chance, most startups choose the latter.
“You’re allowing U.S. investors to cherry pick European assets,” Douglas told me. The result? “European technologies and European companies that are successful end up enriching American pension funds rather than European pension funds.”
Ioannis Ioannou, an associate professor of strategy and entrepreneurship at the London Business School, told me that the consequences extend beyond the purely financial, emphasizing that Europe runs a strategic risk by relying on foreign capital for its climate tech scale-up. “It means you lose the supply chains. You lose the skills. You lose the fine manufacturing capabilities. You lose the so-called green jobs.”
Douglas and the other specialists in European climate finance I spoke with emphasized that the ever-ominous “missing middle” funding gap is particularly pronounced in Europe. A report Douglas co-authored earlier this year, aptly titled “The Series B Funding Gap In European Climate Tech,” quantifies the problem. While 25% of U.S. climate tech companies that raised a seed round from 2010 to 2020 had moved on to secure a Series B by the first half of last year — regardless of what country the capital came from — only 15% of European companies were able to do the same. That has created a growing backlog of startups stuck in a financing limbo: The lineup of European companies looking to raise a Series B grew from 220 in 2020 to 533 in the first half of last year.
While smaller climate tech funds in Europe and the U.S. have raised similar amounts of funding for early-stage startups — $18.5 billion in Europe versus $20.2 billion in the U.S. from 2020 through the first half of 2025 — the gap at the larger end of the market is stark. The U.S closed 29 funds of at least $500 million or more, compared with just 11 in Europe. These larger funds are the ones capable of writing the $25 million to $100 million checks companies desperately need to commercialize and scale. As Douglas’ report notes, fewer than 20% of European climate funds are pursuing a growth strategy, with over 70% making early-stage investments only.
“When we raised World Fund One, we were the largest [debut] climate fund in Europe, and we’re a €300 million fund. That’s nuts,” Douglas told me. World Fund aims to help companies “reach growth-investor readiness” by supporting startups from their seed through Series B, a model Douglas would like to see replicated throughout the region. “We need another 20 World Funds out there in the market to start filling this capital shortfall,” he told me. The firm announced last February that it’s raising a second, €500 million fund, but that’s yet to close.
One of the primary reasons European growth-stage investors have less capital to deploy comes down to the structure of European financial markets, which remain heavily reliant on bank lending rather than higher-risk equity investments. As a result, institutional investors like pension funds, insurers, and endowments never built the habit of investing in venture capital, which shows up when comparing the LP bases across the two regions: In the U.S., about 72% of VC funding comes from private institutional investors, compared with just 30% in Europe. Public money, much of it from the European Investment Fund, helps bridge the gap, but it simply cannot match the scale of private institutions.
Pension funds are a telling case. They’re among the largest sources of venture capital in the U.S., allocating nearly 2% of their assets to VC. But in the EU, they allot just 0.018% — roughly 100 times less. And because the U.S. also has far more money sitting in pension funds than Europe does, this makes the gap in actual dollars reaching startups wider still. Without that deep pool of institutional funding, Europe struggles to support the $500 million- to $1 billion-plus funds that would have the wherewithal to lead growth-stage rounds.
The result is a self-reinforcing cycle. Large growth funds require large institutional backers, but precisely because European pension funds and other institutional investors haven’t stepped up, the venture market remains too small to absorb the kinds of $100 million-plus commitments pension investors managing billions of dollars typically want to make. “They don’t see [venture] as an asset class that they can invest in,” Douglas told me. “But the reason that it doesn’t exist is because they’re not investing themselves in that asset class.”
If there’s one thing I learned from my reporting, it’s that white these problems run deep, Europe is hardly standing still. Policymakers and investors are well aware of the disconnect and are now experimenting with strategies to close the scale-up gap and affirm the region’s position as a leader in climate innovation.
To attract more institutional investment, for example, a growing number of initiatives aim to create “funds of funds” and other government-backed structures that pool money from pension funds, insurers, banks, foundations, and other large investors. The fund-of-funds structure lets an institution make a single, large commitment; then, intermediary asset managers break that capital into smaller chunks and invest it across multiple venture funds. This gives large-ticket investors the scale and diversification they want without requiring them to conduct due diligence on dozens of small venture funds; venture managers, in turn, gain access to much larger pools of capital.
Germany’s Wachstumsfonds Deutschland, for example, is a €1 billion fund-of-funds backed by more than 20 investors — including insurers, pension funds, and large family offices — that invests across the German and broader European VC ecosystem, with a focus on growth-stage capital. The EU’s European Tech Champions Initiative follows a similar model. The European Investment Bank and six member-states launched the initiative in 2023 with €3.9 billion to back regional growth-stage VC funds. Now it’s raising a second tranche of money — targeting €15 billion — and is bringing in private institutional capital for the first time.
Europe’s member states have also pushed institutional investors toward coordinated capital commitments in recent years, with France’s Tibi initiative serving as the model. Launched in 2019, it tasks the French government with vetting venture and growth funds, with those that qualify becoming eligible for backing from initiative’s signatories, primarily insurers and some pension funds. The program has attracted about €31 billion in commitments to date. Germany adopted a similar approach with its WIN initiative, which has now secured €12 billion in pledges from more than 30 major corporations — including Deutsche Bank, BlackRock, and Henkel — to invest in the country’s venture ecosystem by 2030.
The Irish Venture Capital Association has proposed a similar model, while Tibi’s founder — the economist Philippe Tibi himself — has been on a tour essentially pitching the idea across the bloc. But Ioannou isn’t convinced that creating country-specific Tibi-style commitments is the most efficient way for the region to scale climate tech.
“I’m not sure that fragmentation will actually solve the problem,” he told me. “Maybe it will be better if all that capital came into one larger fund, whereby the scale-ups wouldn’t have to deal with country level fragmentation, regulations, jurisdictions, legal, and all that kind of stuff.”
That’s the idea behind the new €5 billion pan-EU Scaleup Europe Fund, which is designed to invest directly in European deep-tech startups — climate tech very much included — rather than through venture funds. Announced last year, the fund has already secured roughly €2.5 billion in capital commitments from both the European Commission and private institutional investors, with a second fundraising round planned for the second half of this year. EQT, Europe’s largest private-markets investor, will manage the funds, ultimately deciding which growth-stage companies to back.
“Everything happened so quickly, from agreeing to it to executing on it to allocating it,” Douglas told me. “In effect, it happened in less than a year, which in the European context is crazy.”
The idea is to replicate what the combination of U.S. federal support and deep private capital markets has accomplished, Dimitri Colin, a policy officer at the cleantech policy and advocacy group Cleantech for Europe, told me. “The whole idea is to bring what worked in the U.S. into European public financing policies,” he said. Colin extolled the virtues of the Biden-era Loan Programs Office, as well as the efficacy of other Inflation Reduction Act-fueled efforts such as generous production tax credits when it comes to derisking investment in first-of-a-kind tech.
In our interview as well as in a recent report, Colin argued that EU funding should move from prioritizing grants to loan and equity guarantees in its forthcoming budget for the years 2028 through 2034. That’s because guarantees have proven far more effective than government grants at bringing private investors into climate tech, Colin told me. According to his report, every euro of grants or equity capital channeled through the VC arm of the European Innovation Council yields about €3 in additional investment. That’s nothing to scoff at, but it pales in comparison with InvestEU, the bloc’s €26.2 billion investment guarantee program. Every euro of guarantees from the latter attracts nearly €14.80 in private follow-on capital.
“The main idea behind the whole budget should be to focus on the leverage effect,” Colin told me, referring to how much additional private funding government backing generates. “How can the little public money that we have in Europe — because the fiscal environment is, of course, very constrained — more easily mobilize private money? That’s what the LPO did well.”
Colin also wants to change the EU’s public funding rules to make it easier to subsidize ongoing operational expenses for early-stage cleantech facilities, similar in effect to U.S. production tax credits. Currently, European policymakers often structure public support for these projects as capex grants paid out after construction is complete. This type of support is more difficult for private investors to underwrite since it doesn’t directly improve the plant’s ongoing operating economics, one of the risks investors care about most.
Getting these financing structures right is a matter of life or death for many of Europe’s most promising climate tech industries. Douglas points to batteries, critical minerals, semiconductors, and green molecules as sectors with the technological readiness to scale domestically — but not yet the capital. “One of the major risks in every sector we know is who’s going to be there, who’s going to be able to go with us on that journey to make sure the company has the capital to be successful,” he told me. Still, he sees reason for optimism. Because if there’s one thing that can be said about the E.U. at this moment, it’s that “they’re definitely taking it seriously.”
“The perfect solution doesn’t exist,” Colin told me. “We need to align the funding models, we need public de-risking tools, but we need also a true industrial strategy, China has done that, the US has done that with the IRA,” he explained. Now it’s Europe’s turn.
Not going to lie, I didn’t see this coming.
Tesla just finished its strongest showing in years. In the second quarter of 2026, the company sold about 480,000 vehicles around the world — well over stock market projections of about 400,000 EVs. Tesla’s sales mark a full 25% year-over-year increase from the second quarter of last year.
If you’re surprised by this news, you’re not alone. Sales of Elon Musk’s EVs had been trending downward over the past few years following a series of self-inflicted wounds. The Cybertruck was a bomb. Tesla appeared to be interested only in building the self-driving cars and autonomous robots of the future, not the electric vehicles of today. Musk’s associations with President Trump and off-putting online politics alienated potential customers everywhere.
Yet here we are. So what happened?
European gas prices, for one thing. Tesla sales actually continued to fall in the U.S., where the electric car market as a whole still hasn’t recovered from tariffs confusion, the loss of federal subsidies, and other chaotic conditions over the past year. Tesla’s rally came instead from China and, interestingly, Europe: Registrations rose 39% in Denmark, 56% in Sweden, and 43% in Portugal and Italy.
It wasn’t so long ago that Musk’s politics had reportedly cratered interest in his cars in those countries. But European gas prices, which are typically much higher than those in the U.S., have also soared because of oil shocks related to the Iran War. EV interest, then, is up — so high that lots of buyers are willing to look past the personality of Tesla’s chief. (It doesn’t hurt that Tesla introduced less-expensive versions of both Model 3 and Model Y, with remarkably cheap leases and loans, to Europe this year to help overcome its struggles there.)
In China, meanwhile, Tesla has had something else up its sleeve to buoy sales. We’ve repeatedly noted the contraction of the company’s EV lineup: With the failure of the Cybertruck as well as the outright cancellation of the older and slow-selling Model S and Model X — the electric cars that pushed Tesla into the mainstream in the 2010s — the brand gets nearly all of its sales (more than 97% in Q2) from just two cars, the Model 3 sedan and Model Y crossover. And there are no signs it has an all-new mass-market car coming soon.
Instead, Tesla cobbled one together by making a new version of an existing car. In China, Musk has been selling the Model Y L, a version of his crossover with its platform stretched out by 6 inches to cram in an extra row of seats. (Tesla has offered a seven-seat version of its ordinary Model Y, but the two little seats in the back had just 25 inches of legroom compared to the 31 inches in this new version.) As a three-row SUV, the longer Model Y lets Tesla compete in a space that it vacated when it killed off the giant, expensive, gullwing-doored Model X. And as of last week, Model Y L is available in the U.S. Tesla hopes the vehicle can lead to a reversal of its sinking fortunes here, where its EV sales shrank by 20% in the second quarter.
Truthfully, the car is a bit of a kluge. Rear seats often require a compromise on comfort and space. In the case of the Model Y L, Jalopnik notes that even with the 6 inches added to the wheelbase, Tesla’s signature sloping roof doesn’t leave much headroom for the occupants of the way-back. Boxier EVs that were built to be three rows to begin with, like the Hyundai Ioniq 9, Kia EV9, and Rivian R1S, are more pleasant for the fifth and sixth passengers. Nevertheless, those who wanted a bigger Tesla at a starting price of around $60,000 can now get one, and that counts.
Model Y L is also a testament to the power of the platform. Yes, building a new vehicle from the ground up would have provided Tesla with a better all-around vehicle than what it got by hacking the Model Y. But the modified Model Y was much faster and cheaper to deliver, providing an entry into a popular segment of the car market just at the moment Tesla needed to right the ship.
Doing more with less, like creating a three-row EV on the platform of your two-row car, looks primed to become a big part of the future of electric vehicles. That’s particularly true when it comes to growing adoption in America, where legacy automakers and startups alike are trying to simplify manufacturing to bring down costs. The solution to get to market for a company like Honda was simply to borrow General Motors’ EV platform and build its first EV on top of it. Rivian has said it has no plans to sell a pickup truck on its new R2 platform the way it has with its original vehicle, but it absolutely could — and arguably should — if market conditions suddenly made such an EV pickup a hot item.