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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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Core inflation is up, meaning that interest rates are unlikely to go down anytime soon.
The Fed on Wednesday issued a report showing substantial increases in the price of eggs, used cars, and auto insurance — data that could spell bad news for the renewables economy.
Though some of those factors had already been widely reported on, the overall rise in prices exceeded analysts’ expectations. With overall inflation still elevated — reaching an annual rate of 3%, while “core” inflation, stripping out food and energy, rose to 3.3%, after an unexpectedly sharp 0.4% jump in January alone — any prospect of substantial interest rate cuts from the Federal Reserve has dwindled even further.
Renewable energy development is especially sensitive to higher interest rates. That’s because renewables projects, like wind turbines and solar panels, have to incur the overwhelming majority of their lifetime costs before they start operating and generating revenue. Developers then often fund much of the project through borrowed money that’s secured against an agreement to buy the resulting power. When the cost of borrowing money goes up, projects become less viable, with lower prospective returns sometimes causing investors not to go forward .
High interest rates have plagued the renewables economy for years. “As interest rates rise, all of a sudden, solar assets that are effectively bonds become less valuable,” Quinn Pasloske, a managing director at Greenbacker, a renewable investor and operating company, told me on Tuesday, describing how the stream of payments from a solar project becomes less valuable as rates rise because investors can get more from risk-free government bonds.
The new inflation data is “consistent with our call of an extended Fed pause, with only one rate cut in 2025, happening in June,” Morgan Stanley economists wrote in a note to clients. Bond traders are also projecting just a single cut for the rest of the year — but not until December.
Federal Reserve Chair Jerome Powell told the Senate Banking committee Tuesday, “We think our policy rate is in a good place, and we don’t see any reason to be in a hurry to reduce it further.”
The yield for the 10-year Treasury bond, often used as a benchmark for the cost of credit, is up 0.09% today, to 4.63%. While this is below where yields peaked in mid-January, it’s a level still well above where yields have been for almost all of the last year. When Treasury yields rise, the cost of credit throughout the economy goes up.
Clean energy stocks were down this morning — but so is the overall market. Because while high interest rates are especially bad for renewables, they’re not exactly great for anyone else.
The Army Corps of Engineers, which oversees U.S. wetlands, halted processing on 168 pending wind and solar actions, a spokesperson confirmed to Heatmap.
UPDATE: On February 6, the Army Corp of Engineers announced in a one-sentence statement that it lifted its permitting hold on renewable energy projects. It did not say why it lifted the hold, nor did it explain why the holds were enacted in the first place. It’s unclear whether the hold has been actually lifted, as I heard from at least one developer who was told otherwise from the agency shortly after we received the statement.
The Army Corps of Engineers confirmed that it has paused all permitting for well over 100 actions related to renewable energy projects across the country — information that raises more questions than it answers about how government permitting offices are behaving right now.
On Tuesday, I reported that the Trump administration had all but paralyzed environmental permitting decisions on solar and wind projects, even for facilities constructed away from federal lands. According to an internal American Clean Power Association memo sent to the trade association’s members and dated the previous day, the Army Corps of Engineers apparatus for approving projects on federally shielded wetlands had come to a standstill. Officials in some parts of the agency have refused even to let staff make a formal determination as to whether proposed projects touch protected wetlands, I reported.
In a statement to me, the Army Corps has confirmed it has “temporarily paused evaluation on” 168 pending permit actions “focused on regulated activities associated with renewable energy projects.” According to the statement, the Army Corps froze work on those permitting actions “pending feedback from the Administration on the applicability” of an executive order Trump issued on his first day in office, “Unleashing American Energy,” and that the agency “anticipates feedback on or about” February 7 from administration officials.
While the statement demonstrates how vast the potential impacts to the renewables sector may be, it also leaves several important questions unanswered. It’s unclear whether each pending permit action that has been frozen applies to its own individual project, or whether some projects have more than one permit pending before the Army Corps, so it is still fuzzy precisely how many projects may be impacted. The Army Corps did not say whether that feedback would lead to the lifting of holds on permitting activity, nor did it explain why the holds were enacted in the first place.
Finally, there’s one big question that still needs answering: The executive order in question focuses on fossil fuel projects and says nothing about renewable energy — no mentions of “renewable,” no “solar,” no “wind.” Why did this order trigger a permitting freeze in the first place? This level of confusion and ambiguity is part and parcel with other statements in the ACP memo, including that guidance and agency perspectives have varied widely in recent weeks depending on who in the government is being asked.
Climate advocates are already pressing the panic button. “This is a 5 alarm fire alert. This could decimate all the clean energy we worked to pass under Biden,” Nick Abraham, state communications director for League of Conservation Voters, wrote on Bluesky in response to my reporting.
I asked the Army Corps for clarity on how the executive order led to a pause on their permitting activity, and we’ll update this story if we hear back.
The leaders of both countries reached deals with the U.S. in exchange for a 30-day reprieve on border taxes.
U.S. President Donald Trump and Mexican President Claudia Sheinbaum announced a month-long pause on across-the-board 25% tariff on Mexican goods imported into the United States that were to take effect on Tuesday.
In a post on Truth Social, Trump said that Sheinbaum had agreed to deploy 10,000 Mexican troops to the U.S.-Mexico border, “specifically designated to stop the flow of fentanyl, and illegal migrants into our Country.” Secretary of State Marco Rubio, Secretary of the Treasury Scott Bessent, and Secretary of Commerce Howard Lutnick will lead talks in the coming month over what comes next.
“I look forward to participating in those negotiations, with President Sheinbaum, as we attempt to achieve a ‘deal’ between our two Countries,” Trump wrote.
In her own statement, Sheinbaum said the U.S. had committed to work on preventing the trafficking of firearms into Mexico.
There has still been no pause on planned tariffs on Canadian imports, which would likely affect the flow of oil, minerals, and lumber, as well as possibly break automobile supply chains in the United States. Canadian leaders announced several measures to counter the tariffs at both the federal and provincial level.
Trump and Canadian Prime Minister Justin Trudeau have spoken today, and are scheduled to do so again this afternoon. Canadian officials are not optimistic, however, that they’ll be able to get a similar deal, a Canadian official told The New York Times.
UPDATE 4:55 p.m. ET: Trudeau announced that he had reached a similar deal that would stave off the imposition of tariffs for a month. Following a “good call” with Trump, Trudeau said in a post on X that he would deploy personnel and resources to his country’s southern border. “Nearly 10,000 frontline personnel are and will be working on protecting the border,” Trudeau wrote. He also said that Canada would have a “Fentanyl Czar” and would “launch a Canada- U.S. Joint Strike Force to combat organized crime, fentanyl and money laundering.”