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Sparks

Tesla Prepares Investors For Its Gap Year

The company is trying to figure out what to do next.

A Tesla.
Heatmap Illustration/Getty Images

2023 was the year Tesla decided it would sell a lot of cars, even if it meant lowering prices. This year, however, Tesla may see “notably slower” growth, the company warned Wednesday in an investor update.

Tesla argued it was “between two major growth waves.” The first saw the rise of the Model 3 and Model Y, its more moderately priced sedan and SUV which together made up over 95 percent of its total unit sales in 2023. “The next one we believe will be initiated by the global expansion of the next-generation vehicle platform,” the company said, likely referencing its rumored “Redwood” vehicle that Reuters reported the company wants to start producing in the middle of next year.

The Model Y, Tesla said, is “the best-selling vehicle, of any kind, globally” following its 1.2 million deliveries in 2023. “For a long time, many doubted the viability of EVs. Today, the best-selling vehicle on the planet is an EV,” Tesla’s investor update said.

The company also flagged that the continuing rollout of the Cybertruck, which launched late last year, weighed on its profits. But the biggest change for the company was the pursuit of lower prices. The company’s $25.2 billion of revenues in the fourth quarter was due to “growth in vehicle deliveries” — selling more cars — albeit at lower average prices. So while revenue grew, it only grew 3% from a year ago.

Whether the electric vehicle sector as a whole is slowing is a matter of some debate. But Tesla is clearly trying to figure out what to do next, after successfully building up its business from near-bankruptcy and selling 1.8 million cars per year. Before the Cybertruck launch, it hadn’t refreshed its lineup in years and did not provide a specific figure for how many vehicles it expects to sell in 2024. Historically its deliveries have risen around 50% a year, although it “only” sold 38% more cars in 2023 than 2022.

Profits tell a similar story to its revenue: Tesla said that reduced prices weighed on its profitability, as did increased spending on artificial intelligence, especially its self-driving technology. It also flagged that its battery business contributed to its overall profits.

The company’s earnings per share of 71 cents and its revenue of $25.2 billion were slightly short of Wall Street estimates, according to Bloomberg.

Tesla shares have been flagging this year, down 16 percent from the end of last year and falling again in after-hours trading following the release of its earnings report. The tech-heavy Nasdaq as a whole is up around 5% this year.

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Sparks

Don’t Look Now, But China Is Importing Less Coal

Add it to the evidence that China’s greenhouse gas emissions may be peaking, if they haven’t already.

A Chinese coal worker.
Heatmap Illustration/Getty Images

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.

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Rewiring America Slashes Staff Due to Trump Funding Freeze

The nonprofit laid off 36 employees, or 28% of its headcount.

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Heatmap Illustration/Getty Images

The Trump administration’s funding freeze has hit the leading electrification nonprofit Rewiring America, which announced Thursday that it will be cutting its workforce by 28%, or 36 employees. In a letter to the team, the organization’s cofounder and CEO Ari Matusiak placed the blame squarely on the Trump administration’s attempts to claw back billions in funding allocated through the Greenhouse Gas Reduction Fund.

“The volatility we face is not something we created: it is being directed at us,” Matusiak wrote in his public letter to employees. Along with a group of four other housing, climate, and community organizations, collectively known as Power Forward Communities, Rewiring America was the recipient of a $2 billion GGRF grant last April to help decarbonize American homes.

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Sparks

Sunrun Tells Investors That a Recession Could Be Just Fine, Actually

The company managed to put a positive spin on tariffs.

A house with solar panels.
Heatmap Illustration/Sunrun, Getty Images

The residential solar company Sunrun is, like much of the rest of the clean energy business, getting hit by tariffs. The company told investors in its first quarter earnings report Tuesday that about half its supply of solar modules comes from overseas, and thus is subject to import taxes. It’s trying to secure more modules domestically “as availability increases,” Sunrun said, but “costs are higher and availability limited near-term.”

“We do not directly import any solar equipment from China, although producers in China are important for various upstream components used by our suppliers,” Sunrun chief executive Mary Powell said on the call, indicating that having an entirely-China-free supply chain is likely impossible in the renewable energy industry.

Hardware makes up about a third of the company’s costs, according to Powell. “This cost will increase from tariffs,” she said, although some advance purchasing done before the end of last year will help mitigate that. All told, tariffs could lower the company’s cash generation by $100 million to $200 million, chief financial officer Danny Abajian said.

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