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They’ve become a stump speech punchline.
Donald Trump claims to be a “big fan” of electric vehicles despite making them a frequent target of derision on the campaign trail. He might be a bigger fan, though, if he got his facts straight. Here’s what Trump has gotten right and wrong about EVs since 2021.
“To China, if you’re listening — President Xi, you and I are friends, but he understands the way I deal. Those big monster car manufacturing plants that you are building in Mexico right now, and you think you are going to get that, not hire Americans, and you’re going to sell the car to us — no. We are going to put a 100% tariff on every single car that comes across the lot.” [March 16, 2024]
Fact check: “There actually are no operating Chinese-owned EV factories in Mexico,” Ilaria Mazzocco, a senior fellow at the Center for Strategic and International Studies and an expert on Chinese climate policy, told me. “So this is very preemptive at this point.”
But it is also, probably, only a matter of time: BYD, which last year passed Tesla as the world’s No. 1 EV maker, is reportedly scouting plant locations in Mexico, and could confirm plans as soon as the second half of 2024. That has made U.S. automakers justifiably nervous. As Robinson Meyer previously wrote for Heatmap, “BYD recently advertised an $11,000 plug-in hybrid targeted at the Chinese market … Even doubling its price with tariffs would keep it firmly among [the United States’] most affordable new vehicles.”
In Mazzocco’s opinion, this isn’t wholly a bad thing — “there’s a point of value to competition that we shouldn’t forget” — and the threat of cheap Chinese EVs has already driven American automakers like Ford to pivot their electric lineups.
But “EVs have encapsulated everybody’s fears of competition with China,” Mazzocco said. The rude awakening has been that they are “actually better at something than the Americans are.” As a result, Biden and Trump are jostling to look tougher on Beijing ahead of the election, especially since big auto manufacturing states like Michigan and Ohio could potentially decide control of the White House. Biden has already ordered the Commerce Department to investigate the potential national security threat of Chinese-made EVs, which currently make up only about 2% of EV imports; Polestar became the first Chinese-owned EV company to make moves in the U.S. last year, but it’s hardly thriving. Meanwhile, Trump has warned that “it’s gonna be a bloodbath for the country” if he isn’t elected.
“If we build all the charging booths that are necessary, our country would go bankrupt. It would cost like $3 trillion. It’s the craziest thing I’ve ever heard.” [Feb. 17, 2024]
Fact check: $3 trillion is a huge number, and it is also very inaccurate in this case. While there are valid concerns about the Biden administration’s high-speed electric vehicle push, Trump almost certainly got his “$3 trillion” price tag from the total cost of the Bipartisan Infrastructure Law, which aims to address significantly more than just the country’s EV-charging infrastructure.
In fact, the BIL earmarks a comparatively small $7.5 billion for the development of 500,000 public charging stations, although even this is a “generational-level investment,” Noah Barnes, the communications director of the Electrification Coalition, told me. With just a fraction of $3 trillion, the U.S. will be able to jumpstart the “national network of EV chargers that will be necessary to power the next generation of vehicles and end our dependence on oil from countries that don’t share our values.”
But what would it cost to build and operate all the charging booths necessary to meet the current federal target of zero-emission cars making up half of new vehicle sales by 2030? A 2022 report from McKinsey & Company estimated that the U.S. will need “1.2 million public EV chargers and 28 million private EV chargers” by 2030 to meet Biden’s zero-emission sales goals. Those public chargers would cost about $38 billion, including the hardware, planning, and installation. Wrap in the cost to residences, workplaces, and depots, and the total cost of public and private charging installation approaches $97 billion. In a separate analysis, AlixPartners, a consulting firm, found that it would take $50 billion to build the charging infrastructure to meet the 2030 zero-emission vehicle goal in the U.S., and $300 billion worldwide.
Needless to say, though, there are a thousand billions in a trillion, so whatever way you cut it, it certainly would not cost the U.S. $3 trillion to build enough charging stations to accommodate zero-emission vehicles.
“I will also rescue the ethanol industry by canceling crooked Joe Biden’s insane ethanol-killing electric vehicle mandate on day one.” [Dec. 20, 2023]
Fact check: It’s not wrong to say that Biden has tried to reduce the role of liquid fuel in vehicles. Trump has gunned for Iowa voters by claiming Biden’s goal (albeit not a binding mandate) of ramping up EV sales will kill the local ethanol industry. But Agriculture Secretary Tom Vilsack — Iowa’s former governor — has stressed that just because the administration is pushing for more EVs, “Does that mean we won’t have a need for E15 or E85” — gasoline blends that contain up to 15% and 85% ethanol content, respectively — “in the future? No.”
For example, new rules defining what qualifies as a “sustainable aviation fuel” — and thus for generous tax credits under the IRA — include ethanol and other plant-based fuels, despite opposition from environmental groups. “The Biden administration plans to invest $4.3 billion to support production of 35 billion gallons of sustainable aviation fuel annually by 2050,” presenting a significant opportunity for Iowa’s farmers, The Des Moines Register writes. As Vilsack added, “You have to think beyond cars and trucks.”
“They want to have electric trucks, so a truck — a big, beautiful truck like Peterbilt or one of them, with the big ones, 18 wheelers, they can go about 2,000 miles, they say, 2,000 on a big tank of diesel. An electric truck, comparable — which it can’t be comparable because you need so much room for the battery. Most of the area that you’re going to carry your goods, going to be battery. But assuming we take away that problem, which is not easy to take away, you’d have to stop approximately seven times to go 2,000 miles, right? You go about 300 miles, and they don’t want to change that.” [Dec. 20, 2023]
Fact check: There’s a lot to unpack here, but the gist is that most of these are the kind of early-stage problems you would find with any emerging technology. While the technology powering heavy-duty electric trucks is promising, there is still a long way to go when it comes to range and capacity.
Still, even a semi that goes only around 375 miles — longer than Trump’s estimate — on a single charge would ultimately be cheaper than a diesel truck, one 2021 study found. Because of the lower cost of ownership, electric semis have a net savings of $200,000 over a 15-year lifespan.
Battery size, and in particular battery weight, will be a major hurdle for long haul electric semis; shipping rates are often determined based on weight, among other factors, and since freight companies already operate on narrow margins, carrying less freight weight is a problem. But the technology is constantly improving. Plus, it’s pretty silly to claim electric truck developers “don’t want to change” their range per charge; electric truck manufacturers are constantly boasting about their new mileage numbers.
“This electric car thing is just crazy. If you want to drive, maybe, let’s say you are here. If you say, ‘Let’s take a drive to beautiful, safe Chicago. It’s so safe. Let’s drive there.’ How many times would you have to stop, about nine? It’s just crazy. They know it. They know it’s crazy.” [Dec. 20, 2023]
Fact check: The distance from Waterloo, Iowa — where Trump made these comments — to “beautiful, safe Chicago” is 269 miles. While the EVs with the worst range would have to charge one single time on a trip of that distance, in 2022, the average EV range was nearly 300 miles. Most cars would make it on a single charge.
“And now we are a nation that wants to make our revered and very powerful army tanks, the best in the world, all-electric, so that despite the fact they are also not able to go far, fewer pollutants will be released into the air as we blast our way through enemy territory, at least in an environmentally friendly way. And they also want to make our jet fighters with a green stamp of energy savings through losing 15% efficiency.” [Dec. 17, 2023]
Fact check: Trump has repeatedly slammed the Biden administration for supposedly wanting to switch to “all-electric” tanks. This is mostly false, though it has its roots in the Army’s first-ever climate strategy, released early last year. In it, the Army stated that it aims to electrify all noncombat vehicles by 2035 and some tactical vehicles by 2050.
The reason the Army wants to go electric isn’t because of some woke environmentalist agenda, though. “The primary reason the Army wants to electrify its fighting vehicles is to reduce wartime casualties,” Bloomberg writes. “An all-electric fleet would mean personnel wouldn’t have to go on dangerous refueling missions that draw combat forces away from fighting the enemy … [and] electric vehicles are also much quieter and harder to spot on enemy surveillance systems because they generate so little heat.”
Trump has also slammed the Air Force for its climate action plan, although the roots of his claim that Biden wants to make jet fighters green by “losing 15% efficiency” are much less clear. He may be referring to the Air Force’s exploration of alternative fuels — which again, it is doing primarily for strategic reasons, since the Air Force reports 30% of the casualties in Afghanistan came from attacks on fuel and water convoys. “We’re not doing the climate plan for climate’s sake … Everything is about increasing our combat capability,” Edwin Oshiba, assistant secretary of the Air Force for energy, installations, and the environment, told the Armed Forces Communications and Electronics Association.
“The problem is you won’t find a charger. And if you do, it’s got lines.” [Dec. 16, 2023]
Fact check: Many EV drivers are dissatisfied with the state of charging infrastructure in the U.S., and lines are an issue. While more charging stations will continue to open up as EVs become more popular — the IRA allotted $7.5 billion to build out 500,000 public chargers by 2030, with another $623 million in EV charging grants awarded last week — this seems, at the moment, to be a fair criticism.
“We are a nation whose leaders are demanding all-electric cars despite the fact that they can’t go far, cost too much, and whose batteries are produced in China with materials only available in China when an unlimited amount of gasoline is available inexpensively in the United States but is not available in China.” [Dec. 17, 2023]
Fact check: China indeed dominates the EV battery market. The Inflation Reduction Act — which Trump has promised to gut — has tried to change this by restricting EV tax credits only to models with batteries and components sourced from the U.S. or its trading partners. The law also includes funding to help seed a domestic EV battery and mineral supply chain.
And it’s working. As my colleague Neel Dhanesha wrote last year, “Battery manufacturers around the country — many of them automakers themselves — have announced over 1,000 gigawatt hours of U.S. battery production that’s slated to come online by 2028, far outpacing projected demand,” according to estimates from the Environmental Defense Fund. All told, domestic battery production has been the greatest beneficiary of the IRA, reports RMI, a clean energy research group.
“Let’s say your [electric] boat goes down and I’m sitting on top of this big powerful battery and the boat’s going down. Do I get electrocuted?” [Oct. 1, 2023]
Fact check: Battery packs on electric boats are designed to be watertight because, believe it or not, it’s crossed the mind of electric boat manufacturers that their products could potentially end up underwater. All the electric boat makers I spoke to in my lengthy investigation into this question told me the battery packs they use have a waterproofing standard that is either at, or just below, what is required for a submarine. The high-voltage batteries are also kept in “puncture-resistant shells” so they won't be exposed to the water even if the boat somehow got mangled in an accident.
All this is a very long way of saying: No, you very likely won’t be electrocuted if your electric boat sinks. But you may get eaten by a shark!
“Hundreds of thousands of American jobs, your jobs, will be gone forever. By most estimates, under Biden’s electric vehicle mandate, 40% of all U.S. auto jobs will disappear.” [Sept. 27, 2023]
Fact check: As Heatmap has reported, there is little evidence to suggest that making electric vehicles will result in fewer jobs. “A number of analyses showed that electric vehicles could actually require more labor to build than gas-powered cars in the U.S., at least for the foreseeable future,” Emily Pontecorvo writes.
“The happiest moment for somebody in an electric car is the first 10 minutes. In other words, you get it charged, and now for 10 minutes. The unhappiest part is the next hour because you’re petrified that you’re not going to be finding another charger.” [August 24, 2023]
Fact check: We don’t know what every single EV driver thinks, but EV drivers as a group tend to be pretty satisfied; plug-in hybrids were level with internal combustion vehicles in J.D. Power’s annual survey of performance, execution, and layout-based consumer satisfaction, with fully battery-powered EVs just a few points behind on a 1,000-point scale. Some 90% of EV drivers say they hope to buy another EV as their next car, a 2022 Plug-In America survey found.
And while range anxiety is real, studies show that it declines the longer someone owns an EV and gets comfortable with charging. Only 8% of EV drivers told Escalent they’ve ever run out of juice while driving.
It’ll take more than an hour for you to start getting anxious, too. The average EV sold in the U.S. last year had a range of 291 miles, or a little over four hours of driving at 70mph.
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The multi-faceted investment is defense-oriented, but could also support domestic clean energy.
MP Materials is the national champion of American rare earths, and now the federal government is taking a stake.
The complex deal, announced Thursday, involves the federal government acting as a guaranteed purchaser of MP Materials’ output, a lender, and also an investor in the company. In addition, the Department of Defense agreed to a price floor for neodymium-praseodymium products of $110 per kilogram, about $50 above its current spot price.
MP Materials owns a rare earths mine and processing facility near the California-Nevada border on the edges of the Mojave National Preserve. It claims to be “the largest producer of rare earth materials in the Western Hemisphere,” with “the only rare earth mining and processing site of scale in North America.”
As part of the deal, the company will build a “10X Facility” to produce magnets, which the DOD has guaranteed will be able to sell 100% of its output to some combination of the Pentagon and commercial customers. The DOD is also kicking in $150 million worth of financing for MP Materials’ existing processing efforts in California, alongside $1 billion from Wall Street — specifically JPMorgan Chase and Goldman Sachs — for the new magnet facility. The company described the deal in total as “a multi-billion-dollar commitment to accelerate American rare earth supply chain independence.”
Finally, the DOD will buy $400 million worth of newly issued stock in MP Materials, giving it a stake in the future production that it’s also underwriting.
Between the equity investment, the lending, and the guaranteed purchasing, the Pentagon, and by extension the federal government, has taken on considerable financial risk in casting its lot with a company whose primary asset’s previous owner went bankrupt a decade ago. But at least so far, Wall Street is happy with the deal: MP Materials’ market capitalization soared to over $7 billion on Thursday after its share price jumped over 40%, from a market capitalization of around $5 billion on Wednesday and the company is valued at around $7.5 billion as of Friday afternoon.
Despite the risk, former Biden administration officials told me they would have loved to make a deal like this.
When I asked Alex Jacquez, who worked on industrial policy for the National Economic Council in the Biden White House, whether he wished he could’ve overseen something like the DOD deal with MP Materials, he replied, “100%.” I put the same question to Ashley Zumwalt-Forbes, a former Department of Energy official who is now an investor; she said, “Absolutely.”
Rare earths and critical minerals were of intense interest to the Biden administration because of their use in renewable energy and energy storage. Magnets made with neodymium-praseodymium oxide are used in the electric motors found in EVs and wind turbines, as well as for various applications in the defense industry.
MP Materials will likely have to continue to rely on both sets of customers. Building up a real domestic market for the China-dominated industry will likely require both sets of buyers. According to a Commerce Department report issued in 2022, “despite their importance to national security, defense demand for … magnets is only a small portion of overall demand and insufficient to support an economically viable domestic industry.”
The Biden administration previously awarded MP Materials $58.5 million in 2024 through the Inflation Reduction Act’s 48C Advanced Energy Project tax credit to support the construction of a magnet facility in Fort Worth. While the deal did not come with the price guarantees and advanced commitment to purchase the facility’s output of the new agreement, GM agreed to come on as an initial buyer.
Matt Sloustcher, an MP Materials spokesperson, confirmed to me that the Texas magnet facility is on track to be fully up and running by the end of this year, and that other electric vehicle manufacturers could be customers of the new facility announced on Thursday.
At the time MP Materials received that tax credit award, the federal government was putting immense resources behind electric vehicles, which bolstered the overall supply supply chain and specifically demand for components like magnets. That support is now being slashed, however, thanks to the One Big Beautiful Bill Act, which will cancel consumer-side subsidies for electric vehicle purchases.
While the Biden tax credit deal and the DOD investment have different emphases, they both follow on years of bipartisan support for MP Materials. In 2020, the DOD used its authority under the Defense Production Act to award almost $10 million to MP Materials to support its investments in mineral refining. At the time, the company had been ailing in part due to retaliatory tariffs from China, cutting off the main market for its rare earths. The company was shipping its mined product to China to be refined, processed, and then used as a component in manufacturing.
“Currently, the Company sells the vast majority of its rare earth concentrate to Shenghe Resources,” MP Materials the company said in its 2024 annual report, referring to a Chinese rare earths company.
The Biden administration continued and deepened the federal government’s relationship with MP Materials, this time complementing the defense investments with climate-related projects. In 2022, the DOD awarded a contract worth $35 million to MP Materials for its processing project in order to “enable integration of [heavy rare earth elements] products into DoD and civilian applications, ensuring downstream [heavy rare earth elements] industries have access to a reliable feedstock supplier.”
While the DOD deal does not mean MP Materials is abandoning its energy customers or focus, the company does appear to be to the new political environment. In its February earnings release, the company mentioned “automaker” or “automotive-grade magnets” four times; in its May earnings release, that fell to zero times.
Former Biden administration officials who worked on critical minerals and energy policy are still impressed.
The deal is “a big win for the U.S. rare earths supply chain and an extremely sophisticated public-private structure giving not just capital, but strategic certainty. All the right levers are here: equity, debt, price floor, and offtake. A full-stack solution to scale a startup facility against a monopoly,” Zumwalt-Forbes, the former Department of Energy official, wrote on LinkedIn.
While the U.S. has plentiful access to rare earths in the ground, Zumwalt-Forbes told me, it has “a very underdeveloped ability to take that concentrate away from mine sites and make useful materials out of them. What this deal does is it effectively bridges that gap.”
The issue with developing that “midstream” industry, Jacquez told me, is that China’s world-leading mining, processing, and refining capacity allows it to essentially crash the price of rare earths to see off foreign competitors and make future investment in non-Chinese mining or processing unprofitable. While rare earths are valuable strategically, China’s whip hand over the market makes them less financially valuable and deters investment.
“When they see a threat — and MP is a good example — they start ramping up production,” he said. Jacquez pointed to neodymium prices spiking in early 2022, right around when the Pentagon threw itself behind MP Materials’ processing efforts. At almost exactly the same time, several state-owned Chinese rare earth companies merged. Neodymium-praseodymium oxide prices fell throughout 2022 thanks to higher Chinese production quotas — and continued to fall for several years.
While the U.S. has plentiful access to rare earths in the ground, Zumwalt-Forbes told me, it has “a very underdeveloped ability to take that concentrate out away from mine sites and make useful materials out of them. What this deal does is it effectively bridges that gap.”
The combination of whipsawing prices and monopolistic Chinese capacity to process and refine rare earths makes the U.S.’s existing large rare earth reserves less commercially viable.
“In order to compete against that monopoly, the government needed to be fairly heavy handed in structuring a deal that would both get a magnet facility up and running and ensure that that magnet facility stays in operation and weathers the storm of Chinese price manipulation,” Zumwalt-Forbes said.
Beyond simply throwing money around, the federal government can also make long-term commitments that private companies and investors may not be willing or able to make.
“What this Department of Defense deal did is, yes, it provided much-needed cash. But it also gave them strategic certainty around getting that facility off the ground, which is almost more important,” Zumwalt-Forbes said.
“I think this won’t be the last creative critical mineral deal that we see coming out of the Department of Defense,” Zumwalt-Forbes added. They certainly are in pole position here, as opposed to the other agencies and prior administrations.”
On a new plan for an old site, tariffs on Canada, and the Grain Belt Express
Current conditions: Phoenix will “cool” to 108 degrees Fahrenheit today after hitting 118 degrees on Thursday, its hottest day of the year so far • An extreme wildfire warning is in place through the weekend in Scotland • University of Colorado forecasters decreased their outlook for the 2025 hurricane season to 16 named storms, eight hurricanes, and three major hurricanes after a quiet June and July.
President Trump threatened a 35% tariff on Canadian imports on Thursday, giving Prime Minister Mark Carney a deadline of August 1 before the levies would go into effect. The move follows months of on-again, off-again threats against Canada, with former Canadian Prime Minister Justin Trudeau having successfully staved off the tariffs during talks in February. Despite those earlier negotiations, Trump held firm on his 50% tariff on steel and aluminum, which will have significant implications for green manufacturing.
As my colleagues Matthew Zeitlin and Robinson Meyer have written, tariffs on Canadian imports will affect the flow of oil, minerals, and lumber, as well as possibly break automobile supply chains in the United States. It was unclear as of Thursday, however, whether Trump’s tariffs “would affect all Canadian goods, or if he would follow through,” The New York Times reports. The move follows Trump’s announcement this week of tariffs on several other significant trade partners like Japan and South Korea, as well as a 50% tariff on copper.
The long beleaguered Lava Ridge Wind Project, formally halted earlier this year by an executive order from President Trump, might have a second life as the site for small modular reactors, Idaho News 6 reports. Sawtooth Energy Development Corporation has proposed installing six small nuclear power generators on the former Lava Ridge grounds in Jerome County, Idaho, drawn to the site by the power transmission infrastructure that could connect the region to the Midpoint Substation and onto the rest of the Western U.S. The proposed SMR project would be significantly smaller in scale than Lava Ridge, which would have produced 1,000 megawatts of electricity on a 200,000-acre footprint, sitting instead on 40 acres and generating 462 megawatts, enough to power 400,000 homes.
Sawtooth Energy plans to hold four public meetings on the proposal beginning July 21. The Lava Ridge Wind Project had faced strong local opposition — we named it the No. 1 most at-risk project of the energy transition last fall — due in part to concerns about the visibility of the turbines from the Minidoka National Historic Site, the site of a Japanese internment camp.
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Republican Senator Josh Hawley of Missouri said on social media Thursday that Energy Secretary Chris Wright had assured him that he will be “putting a stop to the Grain Belt Express green scam.” The Grain Belt Express is an 804-mile-long, $11 billion planned transmission line that would connect wind farms in Kansas to energy consumers in Missouri, Illinois, and Indiana, which has been nearing construction after “more than a decade of delays,” The New York Times reports. But earlier this month, Missouri Attorney General Andrew Bailey, a Republican, put in a request for the local public service commission to reconsider its approval, claiming that the project had overstated the number of jobs it would create and the cost savings for customers. Hawley has also been a vocal critic of the project and had asked the Energy Department to cancel its conditional loan guarantee for the transmission project.
New electric vehicles sold in Europe are significantly more environmentally friendly than gas cars, even when battery production is taken into consideration, according to a new study by the International Council on Clean Transportation. Per the report, EVs produce 73% less life-cycle greenhouse gas emissions than combustion engine cars, even considering production — a 24% improvement over 2021 estimates. The gains are also owed to the large share of renewable energy sources in Europe, and factor in that “cars sold today typically remain on the road for about 20 years, [and] continued improvement of the electricity mix will only widen the climate benefits of battery electric cars.” The gains are exclusive to battery electric cars, however; “other powertrains, including hybrids and plug-in hybrids, show only marginal or no progress in reducing their climate impacts,” the report found.
Aryna Sabalenka attempts to cool down during her Ladies' Singles semi-final at Wimbledon on Thursday.Julian Finney/Getty Images
With the United Kingdom staring down its third heatwave in a month this week, a new study warns of dire consequences if homes and cities do not adapt to the new climate reality. According to researchers at the University College London and the London School of Hygiene and Tropical Medicine, heat-related deaths in England and Wales could rise 50-fold by the 2070s, jumping from a baseline of 634 deaths to 34,027 in a worst-case scenario of 4.3 degrees Celsius warming, a high-emissions pathway.
The report specifically cited the aging populations of England and Wales, as older people become more vulnerable to the impacts of extreme heat. Low adoption of air conditioning is also a factor: only 2% to 5% of English households use air conditioning, although that number may grow to 32% by 2050. “We can mitigate [the] severity” of the health impacts of heat “by reducing greenhouse gas emissions and with carefully planned adaptations, but we have to start now,” UCL researcher Clare Heaviside told Sky News.
This week, Centerville, Ohio, rolled out high-tech recycling trucks that will use AI to scan the contents of residents’ bins and flag when items have been improperly sorted. “Reducing contamination in our recycling system lowers processing costs and improves the overall efficiency of our collection,” City Manager Wayne Davis said in a statement about the AI pilot program, per the Dayton Daily News.
Or at least the team at Emerald AI is going to try.
Everyone’s worried about the ravenous energy needs of AI data centers, which the International Energy Agency projects will help catalyze nearly 4% growth in global electricity demand this year and next, hitting the U.S. power sector particularly hard. On Monday, the Department of Energy released a report adding fuel to that fire, warning that blackouts in the U.S. could become 100 times more common by 2030 in large part due to data centers for AI.
The report stirred controversy among clean energy advocates, who cast doubt on that topline number and thus the paper’s justification for a significant fossil fuel buildout. But no matter how the AI revolution is powered, there’s widespread agreement that it’s going to require major infrastructure development of some form or another.
Not so fast, says Emerald AI, which emerged from stealth last week with $24.5 million in seed funding led by Radical Ventures along with a slew of other big name backers, including Nvidia’s venture arm as well as former Secretary of State John Kerry, Google’s chief scientist Jeff Dean, and Kleiner Perkins chair John Doerr. The startup, founded and led by Orsted’s former chief strategy and innovation officer Varun Sivaram, was built to turn data centers from “grid liabilities into flexible assets” by slowing, pausing, or redirecting AI workloads during times of peak energy demand.
Research shows this type of data center load flexibility could unleash nearly 100 gigawatts of grid capacity — the equivalent of four or five Project Stargates and enough to power about 83 million U.S. homes for a year. Such adjustments, Sivaram told me, would be necessary for only about 0.5% of a data center’s total operating time, a fragment so tiny that he says it renders any resulting training or operating performance dips for AI models essentially negligible.
As impressive as that hypothetical potential is, whether a software product can actually reduce the pressures facing the grid is a high stakes question. The U.S. urgently needs enough energy to serve that data center growth, both to ensure its economic competitiveness and to keep electricity bills affordable for Americans. If an algorithm could help alleviate even some of the urgency of an unprecedented buildout of power plants and transmission infrastructure, well, that’d be a big deal.
While Emerald AI will by no means negate the need to expand and upgrade our energy system, Sivaram told me, the software alone “materially changes the build out needs to meet massive demand expansion,” he said. “It unleashes energy abundance using our existing system.”
Grand as that sounds, the fundamental idea is nothing new. It’s the same concept as a virtual power plant, which coordinates distributed energy resources such as rooftop solar panels, smart thermostats, and electric vehicles to ramp energy supply either up or down in accordance with the grid’s needs.
Adoption of VPPs has lagged far behind their technical potential, however. That’s due to a whole host of policy, regulatory, and market barriers such as a lack of state and utility-level rules around payment structures, insufficient participation incentives for customers and utilities, and limited access to wholesale electricity markets. These programs also depend on widespread customer opt-in to make a real impact on the grid.
“It’s really hard to aggregate enough Nest thermostats to make any kind of dent,”” Sivaram told me. Data centers are different, he said, simply because “they’re enormous, they’re a small city.” They’re also, by nature, virtually controllable and often already interconnected if they’re owned by the same company. Sivaram thinks the potential of flexible data center loads is so promising and the assets themselves so valuable that governments and utilities will opt to organize “bespoke arrangements for data centers to provide their services.”
Sivaram told me he’s also optimistic that utilities will offer data center operators with flexible loads the option to skip the ever-growing interconnection queue, helping hyperscalers get online and turn a profit more quickly.
The potential to jump the queue is not something that utilities have formally advertised as an option, however, although there appears to be growing interest in the idea. An incentive like this will be core to making Emerald AI’s business case work, transmission advocate and president of Grid Strategies Rob Gramlich told me.
Data center developers are spending billions every year on the semiconductor chips powering their AI models, so the typical demand response value proposition — earn a small sum by turning off appliances when the grid is strained — doesn’t apply here. “There’s just not anywhere near enough money in that for a hyperscaler to say, Oh yeah, I’m gonna not run my Nvidia chips for a while to make $200 a megawatt hour. That’s peanuts compared to the bazillions [they] just spent,” Gramlich explained.
For Emerald AI to make a real dent in energy supply and blunt the need for an immediate and enormous grid buildout, a significant number of data center operators will have to adopt the platform. That’s where the partnership with Nvidia comes in handy, Sivaram told me, as the startup is “working with them on the reference architecture” for future AI data centers. “The goal is for all [data centers] to be potentially flexible in the future because there will be a standard reference design,” Sivaram said.
Whether or not data centers will go all in on Nvidia’s design remains to be seen, of course. Hyperscalers have not typically thought of data centers as a flexible asset. Right now, Gramlich said, most are still in the mindset that they need to be operating all 8,760 hours of the year to reach their performance targets.
“Two or three years ago, when we first noticed the surge in AI-driven demand, I talked to every hyperscaler about how flexible they thought they could be, because it seemed intuitive that machine learning might be more flexible than search and streaming,” Gramlich told me. By and large, the response was that while these companies might be interested in exploring flexibility “potentially, maybe, someday,” they were mostly focused on their mandate to get huge amounts of gigawatts online, with little time to explore new data center models.
“Even the ones that are talking about flexibility now, in terms of what they’re actually doing in the market today, they all are demanding 8,760 [hours of operation per year],” Gramlich told me.
Emerald AI is well aware that its business depends on proving to hyperscalers that a degree of flexibility won’t materially impact their operations. Last week, the startup released the results of a pilot demonstration that it ran at an Oracle data center in Phoenix, which proved it was able to reduce power consumption by 25% for three hours during a period of grid stress while still “assuring acceptable customer performance for AI workloads.”
It achieved this by categorizing specific AI tasks — think everything from model training and fine tuning to conversations with chatbots — from high to low priority, indicating the degree to which operations could be slowed while still meeting Oracle’s performance targets. Now, Emerald AI is planning additional, larger-scale demonstrations to showcase its capacity to handle more complex scenarios, such as responding to unexpected grid emergencies.
As transmission planners and hyperscalers alike wait to see more proof validating Emerald AI’s vision of the future, Sivaram is careful to note that his company is not advocating for a halt to energy system expansion. In an increasingly electrified economy, expanding and upgrading the grid will be essential — even if every data center in the world has a flexible load profile.
’We should be building a nationwide transmission system. We should be building out generation. We should be doing grid modernization with grid enhancing technologies,” Sivaram told me. “We just don’t need to overdo it. We don’t need the particularly massive projections that you’re seeing that are going to cause your grandmother’s electricity rates to spike. We can avoid that.”