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The Chinese EV giant doesn’t sell cars in the U.S., but it does sell buses.
The Biden administration continued its crackdown on carbon pollution from the transportation sector on Friday, finalizing tough new limits on tailpipe emissions from heavy-duty trucks and buses.
The new rules, which the Environmental Protection Agency projects will keep a billion tons of carbon dioxide from entering the atmosphere, could push more trucks and buses to use electric motors or experiment with alternative fuels. They apply to a plethora of big vehicles — delivery vans, trash trucks, city and school buses, even 18-wheelers — and go into effect starting in model year 2027.
As Camila Domonoske writes for NPR, these new rules are contentious — far more divisive than the new EPA limits on light-duty car and truck pollution that were unveiled earlier this month. While public-health groups such as the American Lung Association have celebrated the rules, citing their more than $13 billion in net benefits for the public, fossil-fuel trade groups and truckers’ lobbyists have said that they will be expensive to comply with and a “forced march toward electric vehicles.”
Of course, it was never going to be simple to fix the environmental problem posed by America’s heavy-duty vehicle fleet. The transportation sector now produces 29% of America’s carbon pollution, more than any other part of the economy. Heavy-duty trucks and buses are responsible for about a quarter of that pollution, making them second only to passenger cars, trucks, and SUVs as a driver of transportation-related emissions.
Given all the attention on these rules, I wanted to highlight two very different companies that will be affected by them. One is an automaker that is increasingly synonymous with China’s goals of creating a new global mass market for clean vehicles. The other is an all-American electric truck maker that is a particular favorite of upscale Millennial and Gen X dads.
The first is BYD, the Chinese automaker that last year surpassed Tesla as the world’s No. 1 producer of electric and plug-in vehicles. Here in America, most of the attention paid to BYD recently has focused on its zippy, unbelievably affordable electric cars, such as the $9,000 BYD Seagull.
Of course, some of that hand wringing is premature: BYD doesn’t even sell cars in the United States yet, and it’s only begun to push operations into our neighboring market of Mexico. But what BYD does sell in the U.S. is buses — a lot of them. Over the past decade, transit agencies and airports across North America have ordered more than 1,000 buses from BYD, the company says; it cites customers in California, Massachusetts, Georgia, and Louisiana. From an American perspective, BYD is and remains a bus company: It operates an electric-bus factory in Los Angeles County, California, that has been described as the largest in North America, and it recently opened bus-repair centers in New Jersey and Indiana so it could service East Coast and Midwest clients.
BYD, I should add, is not the only electric-bus maker in North America. Nova Bus, a Canadian company owned by the Volvo Group, just received the largest electric bus order in the continent’s history. The Volvo Group also recently bought part of Proterra, an American electric-bus maker that went bankrupt last year. (Somewhat confusingly, the Volvo Group, which is headquartered in Sweden, is a different company from Volvo Cars, which is owned by the Chinese automaker Geely.) Thomas Built, the iconic American maker of yellow school buses, has also unveiled a single electric model, the C2 Jouley. (Fun fact: Even though it makes an icon of Americana, Thomas Built is owned by Daimler.)
Even if BYD reaps some business from the EPA rule, it will be somewhat limited in doing so. In 2021, the Biden administration said that transit agencies could not spend federal money on manufacturers linked to China.
But BYD isn’t the only company that could stand to benefit from these new EPA rules. Another is much closer to home: the electric-truck maker, Rivian.
Although most readers will know Rivian for its rugged and neotenous electric trucks, it also makes delivery trucks and work vans. These vans were initially designed to be sold to Amazon, which owns roughly 16% of Rivian, but they have since blossomed into their own product line. Companies can now buy a Rivian Delivery 500, a chipper work van with 500 cubic feet of cargo space and 160 miles of range, for $83,000 or more.
When I’ve analyzed Rivian’s financial future recently, I haven’t focused as much on its delivery vans in part because that business seemed to be decelerating. Amazon bought fewer delivery vans in the fourth quarter of 2023 than it did in the third quarter, and while Rivian’s executives have blamed that pause on Amazon’s busy holiday-shopping season, it seemed prudent for those of us outside the company to wait and see what will happen to it more broadly. As I’ve written, Rivian needs all the cash it can muster to cross the so-called EV valley of death and survive until early 2026, when it will begin selling its affordable R2 SUV.
But perhaps these EPA rules will generate more demand for electric delivery vans than Rivian might project. If that happens, then other American automakers will be happy, too — such as Ford, whose $46,000 electric E-Transit cargo van could also help companies meet the new rules.
And automakers won’t be the only American companies who benefit. The EPA projects that the new rule’s biggest winner might be the heavy-duty trucking and cargo industry itself — truck owners and fleet operators will save $3.5 billion in fuel costs each year because of the rule, the agency says. But to conserve that money, they might have to shell out a little more at the outset for slightly more expensive vehicles. If that’s true, then the rule seems prudent, almost thrifty. After all, nobody ever said saving money would be cheap.
Editor’s note: This story has been updated to clarify limitations on the use of federal funds by transit agencies, as well as the ownership of Proterra and Thomas Built.
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SpaceX has also now been dragged into the fight.
The value of Tesla shares went into freefall Thursday as its chief executive Elon Musk traded insults with President Donald Trump. The war of tweets (and Truths) began with Musk’s criticism of the budget reconciliation bill passed by the House of Representatives and has escalated to Musk accusing Trump of being “in the Epstein files,” a reference to the well-connected financier Jeffrey Epstein, who died in federal detention in 2019 while awaiting trial on sex trafficking charges.
The conflict had been escalating steadily in the week since Musk formally departed the Trump administration with what was essentially a goodbye party in the Oval Office, during which Musk was given a “key” to the White House.
Musk has since criticized the reconciliation bill for not cutting spending enough, and for slashing credits for electric vehicles and renewable energy while not touching subsidies for oil and gas. “Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill,” Musk wrote on X Thursday afternoon. He later posted a poll asking “Is it time to create a new political party in America that actually represents the 80% in the middle?”
Tesla shares were down around 5% early in the day but recovered somewhat by noon, only to nosedive again when Trump criticized Musk during a media availability. The shares had fallen a total of 14% from the previous day’s close by the end of trading on Thursday, evaporating some $150 billion worth of Tesla’s market capitalization.
As Musk has criticized Trump’s bill, Trump and his allies have accused him of being sore over the removal of tax credits for the purchase of electric vehicles. On Tuesday, Speaker of the House Mike Johnson described Musk’s criticism of the bill as “very disappointing,” and said the electric vehicle policies were “very important to him.”
“I know that has an effect on his business, and I lament that,” Johnson said.
Trump echoed that criticism Thursday afternoon on Truth Social, writing, “Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” He added, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”
“In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately,” Musk replied, referring to the vehicles NASA uses to ferry personnel and supplies to and from the International Space Station.
The company will use the seed funding to bring on more engineers — and customers.
As extreme weather becomes the norm, utilities are scrambling to improve the grid’s resilience, aiming to prevent the types of outages and infrastructure damage that often magnify the impact of already disastrous weather events. Those events cost the U.S. $182 billion in damages last year alone.
With the intensity of storms, heat waves, droughts, and wildfires growing every year, some utilities are now turning to artificial intelligence in their quest to adapt to new climate realities. Rhizome, which just announced a $6.5 million seed round, uses AI to help assess and prevent climate change-induced grid infrastructure vulnerabilities. It’s already working with utilities such as Avangrid, Seattle City Light, and Vermont Electric Power Company to do so.
“With a combination of utility system data and historical weather and hazard information, and then climate projection information, we can build a full profile of likelihood and consequence of failure at a very high resolution,” Rhizome co-founder and CEO Mish Thadani told me.
While utilities often have lots of data about the history of their assets and the surrounding landscape, there’s no real holistic system to bring together these disparate datasets and provide a simple overview of systemic risk across a range of different scenarios. Utilities usually rely on historical data to make decisions about their assets — a practice that’s increasingly unhelpful as climate change makes previously rare extreme weather events more likely.
Rhizome aims to solve both problems, serving as an integrated platform for risk assessment and mitigation that incorporates forward-looking climate modeling into its projections. The company measures its success against modeled counterfactuals that determine avoided power outages and the economic losses associated with these hypothetical blackouts. “So we can say the anticipated failure rate across the system for a Category 1 hurricane was X, and after you invest in the system, it will be Y,” Thadani told me. “Or if you’ve made a bunch of investments in the system, and you do experience a Category 1 hurricane, what would have been the failure rate had those investments not been made?”
This allows utilities to provide regulators with much more robust data to back up their funding requests. So while Thadani expects electricity prices to continue to rise and ratepayers to bear the burden, he told me that Rhizome can ultimately help regulators and utilities keep costs in check by making sure that every dollar spent on risk mitigation goes as far as possible.
Rhizome’s seed round, which came in oversubscribed, was led by the early-stage tech-focused venture firm Base10 Partners, which aims to automate traditional sectors of the economy. Additional funders include climate investors MCJ and CLAI, as well as the wildfire-focused venture firm Convective Capital. In addition to its standard risk assessment system, Rhizome has also developed a wildfire-specific risk mitigation tool. This quantifies not only how likely a hazard is to occur and its potential impact on utility infrastructure, but also the probability that an equipment failure would spark a wildfire, based on the geography of the area and historical ignition data.
Thadani told me that he considers evaluating wildfire risk “to be the next step in a sequence” as a utility evaluates the threats to its system overall. So while customers can choose to adopt either the standard product or the wildfire-specific product, many could gain utility from both, he said. The company has also developed a third offering specifically tailored for municipal and cooperative utilities. This more affordable system doesn’t provide the same machine learning-powered cost-benefit metrics, but can still help these smaller entities evaluate their infrastructure’s vulnerability.
Right now, Rhizome has a “lean and mighty” team of just 11 people, Thadani told me. With this latest raise, he said that the company will immediately hire five or six engineers, primarily to do further research and development. As Rhizome looks to onboard more and larger customers, it’s planning to incorporate more advanced modeling features into its platform and operate it increasingly autonomously, such that the model can retrain itself as new weather, climate, and utility data becomes available.
The company is out of the pilot phase with most of its customers, Thadani said, having signed multiple enterprise software contracts. That’s big, as utilities have gained a reputation for showing an initial appetite for testing innovative technologies, only to balk at the cost of full-scale deployment. Thadani told me Rhizome has been able to avoid this so-called “pilot purgatory” by making a point to engage with senior-level stakeholders at utilities — not just the innovation teams — to “graduate from that pilot ecosystem more quickly.”
Add it to the evidence that China’s greenhouse gas emissions may be peaking, if they haven’t already.
Exactly where China is in its energy transition remains somewhat fuzzy. Has the world’s largest emitter of greenhouse gases already hit peak emissions? Will it in 2025? That remains to be seen. But its import data for this year suggests an economy that’s in a rapid transition.
According to government trade data, in the first fourth months of this year, China imported $12.1 billion of coal, $100.4 billion of crude oil, and $18 billion of natural gas. In terms of value, that’s a 27% year over year decline in coal, a 8.5% decline in oil, and a 15.7% decline in natural gas. In terms of volume, it was a 5.3% decline, a slight 0.5% increase, and a 9.2% decline, respectively.
“Fossil fuel demand still trends down,” Lauri Myllyvirta, the co-founder of the Centre for Research on Energy and Clean Air, wrote on X in response to the news.
Morgan Stanley analysts predicted Friday in a note to clients that this “weak downstream demand” for coal in China would “continue to hinder coal import volume.”
Another piece of China’s emissions and coal usage puzzle came from Indonesia, which is a major coal exporter. Citing data from trade data service Kpler, Reuters reported Friday that Indonesia’s thermal coal exports “have dropped to their lowest in three years” thanks to “weak demand in China and India,” the world’s two biggest coal importers. Indonesia’s thermal coal exports dropped 12% annually to 150 million tons in the first third of the year, Reuters reported.
China’s official goal is to hit peak emissions by 2030 and reach “carbon neutrality” by 2060. The country’s electricity grid is largely fueled by coal (with hydropower coming in at number two), as is its prolific production of steel and cement, which is energy and, specifically, coal-intensive. For a few years in the 2010s, more cement was poured in China than in the whole 20th century in the United States. China also accounts for about half of the world’s steel production.
At the same time, China’s electricity demand growth is being largely met by renewables, implying that China can expand its economy without its economy-wide, annual emissions going up. This is in part due to a massive deployment of renewables. In 2023, China installed enough non-carbon-emitting electricity generation to meet the total electricity demand of all of France.
China’s productive capacity has shifted in a way that’s less carbon intensive, experts on the Chinese energy system and economy have told Heatmap. The economy isshifting more toward manufacturing and away from the steel-and-cement intensive breakneck urbanization of the past few decades, thanks to a dramatically slowing homebuilding sector.
Chinese urban residential construction was using almost 300 million tons of steel per year at its peak in 2019, according to research by the Reserve Bank of Australia, about a third of the country’s total steel usage. (Steel consumption for residential construction would fall by about half by 2023.) By contrast, the whole United States economy consumes less than 100 million tons of steel per year.
To the extent the overall Chinese economy slows down due to the trade war with the United States, coal usage — and thus greenhouse gas emissions — would slow as well. Although that hasn’t happened yet — China also released export data on Friday that showed sustained growth, in spite of the tariff barriers thrown up by the Trump administration.