Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Sparks

Elon Musk Is Getting What He Wants

It’s official: Trump is out to kill the EV tax credit.

Donald Trump.
Heatmap Illustration/Getty Images

The Trump administration is hoping to kill the $7,500 tax credit for electric vehicle buyers, according to a Reuters report citing two anonymous sources within the Trump transition team.

That aspiration isn’t totally unexpected — President-elect Donald Trump flirted with ending the EV tax credit throughout the campaign. But it’s nonetheless our first post-election sense of how the Trump administration plans to pursue the Republican tax package that is expected to be the centerpiece of its legislating agenda.

If the EV tax credit is repealed, it would deal a significant setback to the American auto industry’s attempts to make the transition to electric vehicles. General Motors, Ford, and other legacy automakers have invested billions of dollars to build EV factories and battery plants in order to prepare for an electric future. The Alliance for Automotive Innovation, the automaking industry’s trade group, has privately lobbied lawmakers to keep all of the Biden administration’s subsidies for EV production.

GM and Ford aren’t doing this just for the climate. They’re trying to compete with European and East Asian automakers that are transitioning to EVs — and will continue to transition, regardless of policy changes within the United States. BYD, the Chinese company that exclusively makes EVs, is on track this year to sell more cars globally than Ford. That’s the entire Ford line-up, not just EVs. China has reached its commanding position in the EV industry partly by offering EV consumers and companies more than $200 billion in subsidies, according to an analysis from the Center for Strategic and International Studies.

The rollback would also be a setback for Tesla and Rivian, the two highest-profile American EV-only companies. Yet according to the same Reuters report, Tesla supports the plan to repeal the tax credit. Elon Musk has asserted in interviews that because Tesla has more experience building EVs than any other company, it would suffer least from the subsidy’s disappearance. (As the country’s No. 1 EV seller, Tesla has also likely benefited from EV tax credits — in their current and pre-Biden forms — more than any other company.) Repeal is part of Musk’s hypothesized plan to turn Tesla into a de facto monopoly, controlling the entire American EV industry.

Rivian shares have fallen 11% today, while Tesla’s are down just 5%. Ford and GM are trading flat.

The new GOP majorities in Congress hope to extend their 2017 package of tax cuts, which mostly benefit wealthy Americans. One way to pay for those tax cuts could be to repeal the tax incentives in the Inflation Reduction Act, President Joe Biden’s landmark climate law. The news today, then, is mostly a sign that the battle lines are being drawn in the auto industry: Much of the auto industry wants to keep the full slate of EV subsidies. Tesla wants to take them down.

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Sparks

One Reason Trump Wants Greenland: Critical Minerals

The island is home to one of the richest rare earth deposits in the world.

Donald Trump.
Heatmap Illustration/Getty Images

A top aide to incoming President Donald Trump is claiming the president-elect wants the U.S. to acquire Greenland to acquire more rare minerals.

“This is about critical minerals. This is about natural resources,” Trump’s soon-to-be national security advisor Michael Waltz told Fox News host Jesse Watters Thursday night, adding: “You can call it Monroe Doctrine 2.0, but it’s all part of the America First agenda.”

Keep reading...Show less
Green
Sparks

An Insurance Startup Faces a Major Test in Los Angeles

Kettle offers parametric insurance and says that it can cover just about any home — as long as the owner can afford the premium.

Los Angeles fire destruction.
Heatmap Illustration/Getty Images

Los Angeles is on fire, and it’s possible that much of the city could burn to the ground. This would be a disaster for California’s already wobbly home insurance market and the residents who rely on it. Kettle Insurance, a fintech startup focused on wildfire insurance for Californians, thinks that it can offer a better solution.

The company, founded in 2020, has thousands of customers across California, and L.A. County is its largest market. These huge fires will, in some sense, “be a good test, not just for the industry, but for the Kettle model,” Brian Espie, the company’s chief underwriting officer, told me. What it’s offering is known as “parametric” insurance and reinsurance (essentially insurance for the insurers themselves.) While traditional insurance claims can take years to fully resolve — as some victims of the devastating 2018 Camp Fire know all too well — Kettle gives policyholders 60 days to submit a notice of loss, after which the company has 15 days to validate the claim and issue payment. There is no deductible.

Keep reading...Show less
Sparks

What the L.A. Fires Are Doing to the City’s Air

The Santa Ana winds are carrying some of the smoke out to sea.

Los Angeles during wildfires.
Heatmap Illustration/Getty Images

Wildfires have been raging across Los Angeles County since Tuesday morning, but only in the past 24 hours or so has the city’s air quality begun to suffer.

That’s because of the classic path of the Santa Ana winds, Alistair Hayden, a public health professor at Cornell who studies how wildfire smoke affects human health, told me. “Yesterday, it looked like the plumes [from the Palisades fire] were all blowing out to sea, which I think makes sense with the Santa Ana wind patterns blowing to the southwest,” Hayden said.

Keep reading...Show less
Yellow