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Plenty has changed in the race for the U.S. presidency over the past week. One thing that hasn’t: Gobs of public and private funding for climate tech are still on the line. If Republicans regain the White House and Senate, tax credits and other programs in the Inflation Reduction Act will become an easy target for legislators looking to burnish their cost-cutting (and lib-owning) reputations. The effects of key provisions getting either completely tossed or seriously amended would assuredly ripple out to the private sector.
You would think the possible impending loss of a huge source of funding for clean technologies would make venture capitalists worry about the future of their business model. And indeed, they are worried — at least in theory. None of the clean tech investors I’ve spoken with over the past few weeks told me that a Republican administration would affect the way their firm invests — not Lowercarbon Capital, not Breakthrough Energy Ventures, not Khosla Ventures, or any of the VCs with uplifting verbs: Galvanize Climate Solutions, Generate Capital, and Energize Capital.
Numerous investors did say, however, that they thought a Republican-controlled White House and perhaps Congress would affect the investment landscape overall. “The real answer is, it will impact,” Rajesh Swaminathan, a partner at Khosla Ventures, told me. “I don’t expect everybody that came in when the going was great to remain when and if the going gets tough with any kind of administration shift,” Juan Muldoon, a partner at the climate software VC Energize Capital, told me.
A Trump presidency puts $1 trillion in overall energy investments at risk, according to a May report from energy consultancy Wood Mackenzie. Much of this depends on whether Trump would take a scalpel or a hammer to IRA incentives, which is difficult to predict. Republican rhetoric is often extreme — gut the IRA, gut the Environmental Protection Agency, maximize fossil fuel production. If actions align with words, climate tech investors ought to have plenty of reasons to be fearful, as the startups they support often owe part of their success to government grants and incentives.
As it stands, there’s widespread agreement that mature technologies like solar and wind will survive and potentially even thrive no matter the changing political tides. But tech that’s yet to come down the cost curve could surely see less investment. This includes electric vehicles, which Trump has alternately derided and praised, though this isn’t really the domain of VCs. Newer technologies that benefit from the tech-neutral clean electricity investment and production tax credits could be at risk, especially energy storage in any form, as the GOP has already introduced a bill that would eliminate these credits. Tech for hard-to-decarbonize industrial sectors such as steel, cement and chemicals production could also take a hit, as emergent solutions are often simply much pricier than business-as-usual.
Some cleantech does benefit from bipartisan support. This includes nuclear — both fission and fusion — as well as technologies that stand to enrich the oil and gas industry, such as advanced geothermal and geologic hydrogen, both of which require drilling expertise. And considering the largest direct air capture deal to date is Occidental Petroleum’s $1.1 billion acquisition of Carbon Engineering, DAC, as well as point source carbon capture and storage, could also grow under Trump, as the oil and gas industry essentially views CCS as a pathway towards the continued production of fossil fuels.
The rest of the hydrogen industry is a jump ball. Green hydrogen made from renewable-powered electrolyzers is expensive and the proposed strict rules that would allow it to qualify for the most generous tax credit are likely goners. But a fossil-fuel based hydrogen economy is certainly an option — although not one that will do much for the climate.
Essentially, though, a number of investors and policy wonks told me that they simply don’t expect the GOP’s bark to match its bite when it comes to completely repealing or seriously altering many of the IRA’s key provisions, instead trusting that legislators will recognize the law’s economic benefits, even if they’re not advertising them.
Although the first Trump administration was undoubtedly disastrous for climate policy, it’s true that many of Trump’s more extreme ambitions never materialized. His budget proposals regularly recommended major funding cuts to the EPA as well as the Department of Energy’s Office of Energy Efficiency and Renewable Energy, and called for eliminating key DOE agencies like the Loan Programs Office and the energy tech-focused ARPA-E. But Congress ultimately rejected all these proposals. Funding for both the EPA and EERE trended upwards, as did funding for clean energy research and development more broadly.
But the IRA didn’t exist then, and now that it does, the bill has become a major recipient of Republican ire. “Precedent tells you it might not be as drastic as you think,” Ben Brenner, senior vice president at the climate-focused government affairs and advisory firm Boundary Stone Partners, told me. “But the environment is very target rich now.”
Brenner noted that the 45X advanced manufacturing production tax credit, for instance, has helped incentivize the expansion of the largest solar manufacturing facility in the U.S. in Dalton, Georgia, Representative Marjorie Taylor-Greene’s territory. Were Republicans to bring it up for full or partial repeal, Brenner thinks results would fall along partisan lines. “If we’re banking on the fact that Marjorie Taylor Greene is going to vote with Democrats on this, we’re fooling ourselves, right? That is not a real viable political strategy.”
In the end, elected officials are responsible to voters. You might think that, because IRA benefits are largely flowing to red states, that will lead to a groundswell of citizen support, but Brenner told me that’s a risky assumption to make. “Wow, it would be nice to think, in theory, that people respond to political incentives in that way,” he said. But “there’s a plenty broad and big enough body of data to show that isn’t necessarily how people react politically.”
That matters for venture capitalists, because while they might view themselves as insulated from the whims of government, a 2023 analysis by ImpactAlpha shows how interconnected the ecosystems are. The analysis, which groups climate tech investors into clusters based on who they frequently co-invest with, found that two of the most central climate “investors” in the network are the National Science Foundation and the Department of Energy, which provide grants to climate-focused startups. It also showed that government grants markedly increase a startup’s chance of survival and ability to raise additional capital in early funding rounds.
If government can’t be a reliable partner to private industry, Aliya Haq, vice president of U.S. policy and advocacy at Breakthrough Energy, told me, “the private sector can’t move forward. Companies can’t figure out what facilities they can build, investors don’t know what actually makes sense to put money into.” (Breakthrough Energy is the umbrella organization for the climate tech VC firm Breakthrough Energy Ventures.)
On an individual level, though, many investors beg to differ, saying that as accelerative as government support can be, they invest in companies that can weather the inevitable vagaries of politics. “The most important climate investing is investing in assets that are long lived, and those things have to be durable across administrations,” Jonah Goldman, head of external affairs and impact at the sustainable infrastructure investment firm Generate Capital, told me.
That was a common refrain. “We’ve invested under a Republican president, a Democratic president,” Muldoon told me. “When we talk about a transition, it needs to span changes in political regimes.”
Clay Dumas, a founding partner at Lowercarbon Capital who used to work in the Obama White House, agreed. “If you were depending on a big premium to sell your products at scale, you were in trouble before the IRA, and you’re going to be in trouble no matter who is president next year,” he told me.
At the same time, there’s no denying that investment is down. A recent report from the market intelligence firm Sightline Climate indicated that climate tech funding in the first half of 2024 fell to 2020 levels, which aligns with a downturn in the VC market at large. The assumption is that it’s at least partially due to investors taking a “wait-and-see” approach ahead of November, although other factors such as high interest rates and continued inflation could also be playing a role. The landscape has been especially tough for startups that have already raised a few rounds, as it now takes about 2.5 times longer to raise a Series B as it did in 2021, when the climate tech market was white hot.
“Those emerging technologies absolutely need government partnership to be able to get across the Valley of Death, to be able to scale, to be able to compete on a level playing field with fossil fuels,” Haq told me.
Even if government does pull way back, Muldoon told me that other sources of funding could step in — universities, private research organizations, family offices and other forms of philanthropic dollars might turn to support climate tech. Still though, he admits that “it doesn’t necessarily fill the void.”
But Haq and many of the investors I spoke with are hanging onto the belief that there won’t necessarily be a void to fill — that the benefits of government investment in climate tech will prevail in the face of deep partisan divides, giving private investors the confidence they need to keep the money coming.
“I hold out hope that there’s enough rationality still left in politics, despite the messaging but in the reality of policymaking, that it doesn’t matter what color your shirt is,” Haq told me. “What matters is whether or not there are jobs in your district, whether there is strong U.S. competitiveness, whether the communities in your state have a strong tax base.”
Fingers crossed.
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The end of consumer electric vehicle tax credits isn’t great, but clawing back federal funding has been even worse.
Trump’s One Big Beautiful Bill took a huge bite out of the climate economy. One segment that emerged largely unscathed, however, is advanced climate tech. Companies working on nuclear, geothermal, battery storage, biofuels, and carbon capture may be shaken by the volatile business environment and a tad worried about provisions such as foreign entities of concern rules that could make their supply chains more complicated. But as of now, they can pretty much proceed with business as usual.
There is one big exception to that, however: The growing ecosystem of electric vehicle charging startups. Not only did OBBBA take a hammer to consumer EV tax credits, Trump also paused funding for key federal charging initiatives on his first day in office. While the startups I talked to were notably blasé about the former situation, executives are seriously worried about how attempts to clawback funding for charging infrastructure will impact the industry as a whole.
The outlook isn’t entirely bleak. Highway fast charging — generally the domain of larger companies such as Tesla, Electrify America, and ChargePoint — has actually seen solid growth so far this year despite the obstacles. But figuring out how to make charging work in urban centers and outlying communities has been a hot market for venture-backed companies over the past few years. And now some of them are facing a moment of reckoning.
“Cities are still pushing forward, but I would say there is a capital-C caution that’s being applied,” Tiya Gordon, founder of the curbside EV charging company It’s Electric, told me. “I think they feel that they need to get it right, and this is true for us as well as a startup. There’s not a margin for error in this environment.”
It’s Electric’s core innovation is siphoning off spare electrical capacity from buildings in cities to run its curbside Level 2, a.k.a. non-fast-charging EV charging network, negating the need for what can be a lengthy and complex grid interconnection process. The company then shares a portion of its revenue with the building owners who agree to the arrangement.
Just days before Trump took office, the startup was awarded $2.2 million from the Department of Transportation’s Charging and Fueling Infrastructure program to deploy curbside charging in Washington, D.C., legally obligated money that the new administration is now trying to rescind. That award remains in legal limbo. “We are proceeding as if we can’t count on that,” Gordon told me. “It’s sand through your fingers in an hourglass.”
That funding came on top of the company’s numerous awards from the Joint Office of Energy and Transportation, an interagency collaboration between the Department of Energy and the Department of Transportation created under the Bipartisan Infrastructure Law. Now the Joint Office has been effectively dismantled as former employees took deferred resignations and Trump has tried to revoke the funding awarded to It’s Electric and other startups.
All of this represents a significant financial setback for It’s Electric, as Gordon told me nondilutive funding — largely from federal and state grants — represents nearly half of the company’s total capital raised to date.
Gordon is hoping states will step into the breach, as climate leaders such as California and New York have thus far stood by their EV expansion plans. But Gordon has already noticed cities employing more diligence than ever when it comes to selecting partners. “They’re really going deep, they’re really taking time, they’re not rushing into any awards. So time is a big factor that represents caution,” she told me. And when it comes to the amount of chargers that cities seem to be looking to build, “the numbers are a little bit more modest.”
She mainly credits this pullback to the whiplash that Trump’s attempt to rescind funding for EV charging has caused. Compared to that, whatever deceleration the end of EV tax credits will cause in consumer uptake is a secondary concern..
“Honestly, that doesn’t really impact us at all,” Jeffrey Prosserman, CEO at Voltpost told me of the tax credits. His company retrofits lampposts in cities and suburbs, turning them into Level 2 EV charging platforms. “At the end of the day, EV adoption will either increase X or Y percent in a given year, but it’s going to continue to increase year over year. We’re past the tipping point, going from early adopters into the mainstream,” he told me.
EV prices are still falling, large businesses still want to electrify their fleets, and self-driving cars — which are far better suited to electric drivetrains — are still getting people excited, all of which should continue to fuel demand for a charging buildout. So while Prosserman acknowledged that nixing the consumer tax credits could “slow adoption by a couple percentage points,” he’s optimistic that the next political cycle will see a resurgence in support.
Like Gordon, however, he is quite concerned about the holdup in funding for both the Charging and Fueling Infrastructure program, or CFI, and its sister initiative, the National Electric Vehicle Infrastructure program, or NEVI. “It creates challenges for the EV charging companies like Voltpost, but it really fundamentally creates challenges for the cities and the general public who expected to have access to charging through these programs,” he told me. “That’s not to say that there isn’t a path forward. It’s just that the path that effectively the entire sector was operating on for the last few years has been reconfigured.”
NEVI is a $5 billion program that aims to build out a national charging network along highways, while CFI allocates $2.5 billion to deploy charging infrastructure in cities, towns, and hard-to-reach areas. Both were stood up in 2021 by the Bipartisan Infrastructure Law.
Politicians, industry analysts, and transportation officials alike have heavily critiqued these programs over the years for appearing to lack urgency, as building a network from scratch has proven to be an enormously complex and cumbersome undertaking. The former executive director of the joint office, Gabe Klein, said at a conference last year that the NEVI program wouldn’t really hit its stride until sometime between 2026 and 2028. Then Trump entered the White House and paused funding for both initiatives, creating a major roadblock for “the entire U.S. EV sector,” Prosserman told me.
Much like It’s Electric, Voltpost started the year by winning CFI funding to deploy its chargers in Washington, D.C,. and also secured a number of awards through the Joint Office of Energy and Transportation. With all of that money now tied up in lawsuits challenging Trump’s attempts to freeze the programs, Voltpost’s plans for growth have slowed. “We’re taking a more conservative approach for this year,” Prosserman told me, saying that while the company will eventually seek to raise a Series A it’s “not actively raising that Series A right now, given the macro situation.”
Prosserman said he’s been disappointed to see the general pullback in climate tech venture funding in the first half of 2025. “You have a group of investors who frankly said they are mission aligned, but are now taking a pause, not a stop, given the macroeconomic conditions, and having to wait until the dust settles to see how to reconfigure their portfolios,” Prosserman said. For now, he told me that Voltpost is leaning into its private-sector partnerships such as those with AT&T and Zipcar.
Not all charging companies have experienced this whiplash of funding awards and rescissions, though. SparkCharge, which makes portable, battery-powered fast chargers for commercial fleets and businesses, hasn’t received any NEVI or CFI grant money. The startup primarily serves customers by dispatching off-grid chargers on-demand or setting up stand-alone deployments, which are not core focus areas of either program.
The startup’s Chief Financial Officer David Piperno told me he’s glad that SparkCharge hasn’t relied on such capital, as it’s managed to “become a profitable enterprise with zero incentives, no state funding, no government funding.” That, he said, has allowed the company “to take a different approach to EV charging and be more innovative and have a variable pay-as-you-go model.” So far that seems to be working out pretty well, as it announced $30.5 million in new funding in May through a combination of equity financing and a venture loan.
Reaching former President Joe Biden’s goal of installing 500,000 publicly accessible EV chargers by 2030 still might be a longshot, though, especially as long as the Trump administration continues to target all things EV-related. And yet, charging executives remain relatively upbeat about the sector’s long-term fortunes.
“If you drive one of these vehicles, compared to what you had before, it’s just a superior car, right?” Piperno said, arguing that should continue to power steady consumer growth, even if it doesn’t happen as quickly as experts once predicted. While growth in EV sales increased by 40% in 2023, that slowed to just about 10% last year, as concerns over the availability of charging infrastructure, price, and range persist. “I think everyone thought that [the EV adoption] curve was going to be a lot faster. But I think that’s really normalized over the past few years already, and we don’t, quite frankly, see it normalizing much more than it has.”
At least now, executives told me, there’s more certainty regarding the policy landscape than at the beginning of the year. That holds especially true for startups that are willing and able to operate under the assumption that they might never see much of their recently awarded federal funding — at least anytime soon.
“The expression was, wait and see, wait and see, wait and see,” Gordon told me of Trump’s first months in office and the uncertainty around EV incentives and funding programs. “And now we waited and we saw, and it’s gone. And so we mourn and we move on, right?”
On NRC drama, Big Tech’s thirst, and Uplight’s for-sale sign
Current conditions: From Japan to California, the Pacific is preparing for tsunamis after one of the strongest earthquakes ever recorded struck the eastern coast of Russia • The Deep South is bracing for stifling temperatures • Hurricane Iona, the first named storm of the 2025 hurricane season in the Central Pacific, has reached Category 3 strength as it passes south of Hawaii.
It’s official: The Trump administration is going after the endangerment finding. The 2009 decision that greenhouse gases pose a danger to human life established the federal government’s legal right to rein in planet-heating emissions under the Clean Air Act and is the bedrock to virtually all national climate regulation. A rule proposed by the Environmental Protection Agency on Tuesday would scrap the finding and wipe out existing greenhouse gas rules on automobiles and heavy trucks. Also on Tuesday, the Department of Energy issued a report that “concludes that CO2-induced warming appears to be less damaging economically than commonly believed, and that aggressive mitigation strategies may be misdirected.”
The outcome of the rollback in the near term is likely years of lawsuits. As Harvard Law School’s Jody Freeman told Heatmap’s Emily Pontecorvo: “It doesn’t take effect for 30 days after it’s final. But yes, at that point, they get sued. These rules go to the D.C. Circuit Court of Appeals because that’s what the Clean Air Act says, and usually it would take about a year or so for a D.C. Circuit decision to happen. So now you’re in 2027. You can see the timeline on this stretching out.” In followup remarks by email, Freeman said: “From a legal perspective, the most aggressive argument they’re making is that they CANNOT regulate GHG emissions at all. If the Supreme Court agrees with that, a future administration can’t fix this. The backup arguments are more subtle and say, we have DISCRETION to use a different method to calculate a contribution toward endangerment, and we can consider many things other than science when making the endangerment finding. If the courts buy these arguments, a future administration could reverse course and rebuild.”
Since President Donald Trump first appointed Annie Caputo to the Nuclear Regulatory Commission in 2017, the Republican has made a name for herself as an industry-friendly champion of faster deployments of new reactors. Reappointed by former President Joe Biden in 2022, her term stretches through 2026. But on Tuesday, Caputo resigned, as I reported yesterday as a midday scoop in my Substack newsletter, Field Notes. The official reason she gave in the email she sent NRC staff is that the time had come to “more fully focus on my family.” But Caputo’s exit comes amid major political upheaval at what was once an oasis of bipartisan consensus.
In May, Trump proposed overhauling the way the NRC has long assessed the health risk from radiation as part of his four executive orders on nuclear power. Last month, in a move that critics decried as an illegal stretch of the White House’s authority over an independent agency, Trump fired Christopher Hanson, the Democratic commissioner who previously held the chair position. Earlier this month, E&E News reported that the Department of Government Efficiency representative detailed to the NRC had told the commission the White House expected it to “rubber stamp” new reactor designs that already gained approval from the departments of Defense or Energy. Emmet Penney at the conservative think tank FAI told me that if Caputo’s departure signals “radical changes” in the future, then the Trump administration’s efforts could backfire and lead to an “own-goal for energy dominance.”
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At least 34 factories or mineral refineries totaling more than $30 billion in investment have been paused, delayed, or canceled since Trump took office. That’s according to a new report from researchers at Wellesley College. “When you look at the projects that are slowing down, it’s all up and down the supply chain,” Jay Turner, an environmental studies professor who leads the database, told Heatmap’s Robinson Meyer.
A chart from the study.The Big Green Machine
The picture isn’t entirely bleak for EVs, at least not yet. Another 68 projects have advanced in the past six months, representing $24 billion in investment and more than 33,000 jobs.
Earlier this year, the lobby group Data Center Coalition and Facebook-owner Meta each asked the Trump administration to loosen permitting for data centers under the Clean Water Act. In an executive order unveiled last week, Wired reports that Trump responded by proposing a set of specific recommendations that mirror what the industry requested.
If implemented, the effects would vary by project, environmental lawyers told Wired. But the move comes amid increased scrutiny of data centers’ thirst for water. Earlier this month, The New York Times reported that a town’s wells ran dry after Meta broke ground on a new data center in Georgia.
In 2023, the startup Uplight tightened its grip on the distributed energy resource management market by acquiring the AI software company AutoGrid from Schneider Electric. Now Uplight is looking to sell itself. The company is pitching itself as “an AI-enhanced, full-stack platform built for the grid’s new demand,” according to a scoop yesterday from Latitude Media’s Maeve Allsup. With electricity demand surging and the aging grid heaving under pressure from extreme weather, technology to harness the solar panels, batteries, and other energy resources traditional utility infrastructure struggles to tap into is becoming crucial to avoiding blackouts.
Beyond Meat is finally getting beyond meat. The company plans to shed the flesh reference in its name this week as it launches its new Beyond Ground product that promises more protein than ground beef. “With this launch,” Fast Company’s Clint Rainey reported, “Beyond Meat is becoming merely Beyond and turning its focus away from only mimicking animal proteins to letting plant-based proteins speak for themselves. The radical move is cultural, agricultural, and financial.”
Rob and Jesse take stock of all the trends threatening to push up power bills.
In the next few years, the United States is going to see the fastest growth in electricity demand since the 1970s. And that’s only the beginning of the challenges that our power grid will face. When you step back, virtually every trend facing the power system — such as the coming surge in liquified natural gas exports or President Trump’s repeal of wind and solar tax credits — threatens to constrain the supply of new electricity.
On this week’s episode of Shift Key, Rob and Jesse talk about why they’re increasingly worried about a surge in electricity prices. What’s setting us up for an electricity shortfall? What does the recent auction in the country’s largest electricity market tell us about what’s coming? And what would a power shock mean for utility customers, the economy, and decarbonization?
Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
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Here is an excerpt from our conversation:
Robinson Meyer: None of these trends guarantee that electricity prices will go up, but suffice it to say, by the end of President Trump’s term, we could be exporting one fifth, right? 20%, 25%. And so that is a huge increase, and going to increase demand for U.S. natural gas supplies. How the supply side of U.S. natural gas responds is still an open question.
But even that isn’t the only trend. At the same time, the president’s tariffs, specifically on inputs to production — so copper, steel — have gone into effect. They’ve remained in effect. And what we’ve seen is that for these key ingredients and components to build more grid infrastructure, prices have gone up. I think steel prices have doubled, copper prices have increased. It doesn’t seem like those prices are coming down anytime soon.
And so just the raw ingredients that are required to produce, to expand the grid, and to increase electricity supply and electricity capacity are going to be more expensive in the world we’re living in than in the counterfactual world.
Jesse Jenkins: Yeah, I think if you go further upstream, too, there’s some — partly because of the tariffs, partly because of the uncertain trade environment, the uncertain macroeconomic environment, we’re not exactly seeing the oil and gas industry pouring capital into expanding natural gas supplies.
So, you could argue, and I’ve heard the folks from the American Gas Association argue this, that there’s no problem with expanding LNG exports as long as we expand supply to match that. And there’s some truth to that — except that we expect supply curves to be increasing, meaning the more we produce of something, in order to get incremental production up, we have to spend a little bit more per unit of energy we produce. That’s sort of characteristic of most markets.
So sure, we could increase our supply by 10% or 20%, but that would also require paying a higher cost per trillion cubic feet, or million cubic meters, or whatever unit you want of natural gas we get out of the ground in the U.S. And that alone would put upward pressure on prices. But if the U.S. is also not expanding supply at the same time that we’re expanding exports, then that just straight-up drives prices up.
We would see, basically, a delayed response from the market, from the supply side of the market, to those prices. This is partly why natural gas prices are so volatile. Prices spike — that sends a signal to add supply, but you can’t turn on the spigot overnight. You’ve got to drill new wells, identify them, get drill rigs out there, and open up production, and in some cases even expand pipelines to get that supply to market. All that takes several years. And so there’s a lag time there that often leads to these spikes in gas prices going quite a bit above what you would expect, the kind of marginal supply curve picture alone to reveal.
And I think if you look at the rig counts, declining rig counts, stagnating production, and sort of the secular decline of our conventional gas resources and oil resources, which are all on decline curves. As we pump more oil and gas out of the ground, the pressure falls and we get less and less from those wells. All that points to the potential for a relatively constrained supply of natural gas in the near term exactly at the same time that we’re ramping up LNG exports.
Mentioned:
Jesse on The Ezra Klein Show
From Rob: The Electricity Affordability Crisis Is Coming
U.S. power use to reach record highs in 2025 and 2026, per EIA
Why the EIA expects natural gas prices to rise
The Messy Truth of America’s Natural Gas Exports
Governor Josh Shapiro’s legal action to constrain power prices
Jesse’s upshift; Rob’s downshift.
This episode of Shift Key is sponsored by …
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Music for Shift Key is by Adam Kromelow.