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Who needs new models when you have chargers and price cuts?
“It doesn't matter if you win by an inch or a mile. Winning's winning.”
I’m reluctant to call Vin Diesel’s Dominic Toretto one of the great philosophers of our time, but his line in the inaugural Fast & Furious movie is as true about street racing as it is about anything else. And in the current electric vehicle sales race, Tesla is the clear winner in mid-2023—this, despite an aging lineup of vehicles, tactics that make the rest of the car business nervous and a dependence on non-car products to entice buyers.
Things could’ve gone very differently this year. I certainly thought so about six months ago. This was supposed to be the year that Tesla’s slew of increasingly dated cars faced real, direct competition for the first time ever; when its CEO’s objectively disastrous foray into social media ownership took attention away from his core business; and when most other car companies got truly serious about creating a future without gasoline.
But now that we have insight into what EVs people bought — or didn’t buy — in the first and second quarters of this year, the numbers tell a different story. Tesla is still the clear leader in EV sales, moving almost half a million cars globally in just the past three months. The Model Y is the best-selling car in the world. The rest of the competition that was supposed to show up and eat Elon Musk’s lunch? Not even remotely close.
According to data from Automotive News, the rest of the EV landscape looks sad by comparison. After the Model Y and Model 3, the bronze medal finish went to the Chevrolet Bolt — an EV that’s generally excellent and affordable but outdated and soon to be discontinued. (By the way, Tesla sold almost six times as many Model Ys as Chevy sold Bolts.)
Right below the Bolt, there’s the expensive and also aging Model S, followed by the Volkswagen ID.4, finally hitting its stride somewhat due to EV tax incentives. After that, the Ford Mustang Mach-E, which has had a slew of production problems this year; then the Hyundai Ioniq 5, a superb EV but one that does not qualify for any tax breaks unless it’s leased; and then Tesla’s own Model X, also long in the tooth.
Keep in mind that the freshest product in Tesla’s lineup these days is the Model Y, which went on sale in 2020, followed by the Model 3, which is now six years old — at the point when another car company would replace it with an entirely new model. The point is, the hottest-selling EVs in the world aren’t fresh, new products at all. (And to be fair, Tesla’s had its own share of headaches with the Cybertruck, which has been pushed back so much it’s starting to feel like the Half-Life 3 of cars.)
Finally, questions are arising about EV demand in general. Monday morning, Axios reported on “the growing mismatch between EV supply and demand,” meaning that while EV sales are steadily climbing and making up more and more of the U.S. market, those sales aren’t matching what car companies are actually building and putting up for sale. In fact, the time EVs spend sitting on dealer lots — a measurement of demand for a car, traditionally — is now nearly double the industry average, Axios reports. In other words, they’re sitting there, unpurchased, about twice as long as gasoline cars.
That’s disheartening news for the climate, especially given how palpably horrific the heat and weather events have been this summer. The world cannot wait for people to switch to electrified and lower-emission vehicles. But there are a lot of reasons this is happening, and the biggest factor is still cost.
With rising interest rates, an uncertain economy ahead and the average EV still costing almost $60,000 — which actually went up this year despite Tesla’s price cuts and all the new cars on the road — can you really blame buyers for sitting this out until things get cheaper?
Simply put, Tesla is offering the best deals right now. As old as the Model 3 and Model Y are, they’re still fun to drive, high-range EVs boasting the best charging network in the business (we’ll get to that in a bit.) They’re also still cutting-edge in most ways that count for EV newcomers; they just don’t look new and are beginning to lack key features offered by many new competitors like bidirectional charging or more predictable automated driving assistance.
This year, Tesla has dramatically slashed their prices and positioned them to take advantage of the full EV tax credits when other car companies cannot. Tesla’s lead remains a solid one in 2023; it has the experience, production capacity, and scale to slash prices on these cars while remaining profitable. Other automakers are sweating their ability to make money on EVs at all right now.
Generally, car companies are wary of slashing prices too much or relying too heavily on discounts. They tend to water down a brand’s image while cutting into profit margins, and the auto industry is very much a business of margins. Now, Tesla has taken a hit to its gross profit margins amid these price cuts, but it’s still doing well and Musk doesn’t seem to care. In the meantime, more than likely, a person’s first EV will be a Tesla.
And then there’s America’s new EV tax credit scheme, which may actually be backfiring to some degree right now.
In short, to get the full $7,500 tax credit on an EV, a car and its batteries must be now made in North America. On a long enough timeline that will help build a robust electric car and battery manufacturing infrastructure here, so that both aren’t dependent on China — exactly the goal of the law. The problem is, local battery factories alone will take years to set up; it’s going to be a long time before the majority of EVs Americans can buy meet both qualifications.
At the beginning of this year, EV demand seemed to be booming because those “buy local” rules hadn’t taken effect yet. Now, a bunch of automakers, including BMW, Volvo, and Hyundai, are left out of the credits because their EVs aren’t made here yet. While well-intentioned, the stringent rules of the tax credit scheme run the risk of dampening EV demand and killing the momentum the car industry had in January.
Finally, car companies now seem to be struggling to reconcile their big environmental promises — you know, vowing to go all-electric by 2035 — with the cold, hard realities of public-company capitalism.
Take General Motors, for example. While it’s made that all-electric commitment, its promised EV lineup has barely materialized yet; the Bolt is the best representation of this promise and it’s on the way out. The Cadillac Lyriq? MIA. The other EVs? Delayed. And the GMC Hummer EV is so environmentally unfriendly, they may as well have just given it a V8 engine. Speaking of, GM has said it’s committed to making gasoline heavy-duty trucks and SUVs for a long time to come; they’re far too profitable to phase out, planet be damned.
Or take the Volkswagen Group, the original “pivot to EVs” automaker in penance for its diesel-cheating sins. It’s dealt with a ton of delays, production problems, and software issues, and it too is reluctant to phase out its most profitable ICE vehicles. And both companies are due to have massive fights with their labor unions over EVs and jobs soon enough.
Essentially, pivoting to EVs is hard. It’s not just about making battery-powered cars. Automakers must retool how cars are designed, built, and sold while focusing on software and revamping their entire supply chains. Deep down, most auto executives would probably rather not do this. It will be an expensive, messy, and complicated process that runs counter to just making shareholders happy each quarter with the status quo until you comfortably retire.
And Tesla’s most powerful weapon keeps proving to be its charging network. There’s perhaps no greater signifier of car companies’ EV trepidation than their willingness to say “You know what? You deal with this” while handing the charging keys to Tesla. GM, Ford, Volvo, Rivian, Volvo, and now Mercedes-Benz have all said they’ll switch to Tesla’s charging standard in North America, giving EV buyers access to that network in the coming years. Perhaps that will drive up EV purchases and make buyers consider things that aren’t Teslas. I think that it probably will.
But in doing so, Tesla will reap significant income in public funding for EV charging stations made possible by the 2021 infrastructure law. It’s unclear whether doing that — and getting revenue from the charging itself — will outweigh potential lost future sales to Mercedes or Volvo or whoever, but one thing seems clear: the biggest winner of the Biden-era tax incentives so far is Tesla.
Short of dramatic price cuts — which are unlikely to happen because these things are so unprofitable as-is — or radically new cheaper battery technologies, it feels unlikely that Tesla will lose the lead in the electric drag race this year or anytime soon.
Who cares if it’s winning on price cuts and its charging network? Ask Dom; a win’s a win.
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New York City may very well be the epicenter of this particular fight.
It’s official: the Moss Landing battery fire has galvanized a gigantic pipeline of opposition to energy storage systems across the country.
As I’ve chronicled extensively throughout this year, Moss Landing was a technological outlier that used outdated battery technology. But the January incident played into existing fears and anxieties across the U.S. about the dangers of large battery fires generally, latent from years of e-scooters and cellphones ablaze from faulty lithium-ion tech. Concerned residents fighting projects in their backyards have successfully seized upon the fact that there’s no known way to quickly extinguish big fires at energy storage sites, and are winning particularly in wildfire-prone areas.
How successful was Moss Landing at enlivening opponents of energy storage? Since the California disaster six months ago, more than 6 gigawatts of BESS has received opposition from activists explicitly tying their campaigns to the incident, Heatmap Pro® researcher Charlie Clynes told me in an interview earlier this month.
Matt Eisenson of Columbia University’s Sabin Center for Climate Law agreed that there’s been a spike in opposition, telling me that we are currently seeing “more instances of opposition to battery storage than we have in past years.” And while Eisenson said he couldn’t speak to the impacts of the fire specifically on that rise, he acknowledged that the disaster set “a harmful precedent” at the same time “battery storage is becoming much more present.”
“The type of fire that occurred there is unlikely to occur with modern technology, but the Moss Landing example [now] tends to come up across the country,” Eisenson said.
Some of the fresh opposition is in rural agricultural communities such as Grundy County, Illinois, which just banned energy storage systems indefinitely “until the science is settled.” But the most crucial place to watch seems to be New York City, for two reasons: One, it’s where a lot of energy storage is being developed all at once; and two, it has a hyper-saturated media market where criticism can receive more national media attention than it would in other parts of the country.
Someone who’s felt this pressure firsthand is Nick Lombardi, senior vice president of project development for battery storage company NineDot Energy. NineDot and other battery storage developers had spent years laying the groundwork in New York City to build out the energy storage necessary for the city to meet its net-zero climate goals. More recently they’ve faced crowds of protestors against a battery storage facility in Queens, and in Staten Island endured hecklers at public meetings.
“We’ve been developing projects in New York City for a few years now, and for a long time we didn’t run into opposition to our projects or really any sort of meaningful negative coverage in the press. All of that really changed about six months ago,” Lombardi said.
The battery storage developer insists that opposition to the technology is not popular and represents a fringe group. Lombardi told me that the company has more than 50 battery storage sites in development across New York City, and only faced “durable opposition” at “three or four sites.” The company also told me it has yet to receive the kind of email complaint flood that would demonstrate widespread opposition.
This is visible in the politicians who’ve picked up the anti-BESS mantle: GOP mayoral candidate Curtis Sliwa’s become a champion for the cause, but mayor Eric Adams’ “City of Yes” campaign itself would provide for the construction of these facilities. (While Democratic mayoral nominee Zohran Mamdani has not focused on BESS, it’s quite unlikely the climate hawkish democratic socialist would try to derail these projects.)
Lombardi told me he now views Moss Landing as a “catalyst” for opposition in the NYC metro area. “Suddenly there’s national headlines about what’s happening,” he told me. “There were incidents in the past that were in the news, but Moss Landing was headline news for a while, and that combined with the fact people knew it was happening in their city combined to create a new level of awareness.”
He added that six months after the blaze, it feels like developers in the city have a better handle on the situation. “We’ve spent a lot of time in reaction to that to make sure we’re organized and making sure we’re in contact with elected officials, community officials, [and] coordinated with utilities,” Lombardi said.
And more on the biggest conflicts around renewable energy projects in Kentucky, Ohio, and Maryland.
1. St. Croix County, Wisconsin - Solar opponents in this county see themselves as the front line in the fight over Trump’s “Big Beautiful” law and its repeal of Inflation Reduction Act tax credits.
2. Barren County, Kentucky - How much wood could a Wood Duck solar farm chuck if it didn’t get approved in the first place? We may be about to find out.
3. Iberia Parish, Louisiana - Another potential proxy battle over IRA tax credits is going down in Louisiana, where residents are calling to extend a solar moratorium that is about to expire so projects can’t start construction.
4. Baltimore County, Maryland – The fight over a transmission line in Maryland could have lasting impacts for renewable energy across the country.
5. Worcester County, Maryland – Elsewhere in Maryland, the MarWin offshore wind project appears to have landed in the crosshairs of Trump’s Environmental Protection Agency.
6. Clark County, Ohio - Consider me wishing Invenergy good luck getting a new solar farm permitted in Ohio.
7. Searcy County, Arkansas - An anti-wind state legislator has gone and posted a slide deck that RWE provided to county officials, ginning up fresh uproar against potential wind development.
Talking local development moratoria with Heatmap’s own Charlie Clynes.
This week’s conversation is special: I chatted with Charlie Clynes, Heatmap Pro®’s very own in-house researcher. Charlie just released a herculean project tracking all of the nation’s county-level moratoria and restrictive ordinances attacking renewable energy. The conclusion? Essentially a fifth of the country is now either closed off to solar and wind entirely or much harder to build. I decided to chat with him about the work so you could hear about why it’s an important report you should most definitely read.
The following chat was lightly edited for clarity. Let’s dive in.
Tell me about the project you embarked on here.
Heatmap’s research team set out last June to call every county in the United States that had zoning authority, and we asked them if they’ve passed ordinances to restrict renewable energy, or if they have renewable energy projects in their communities that have been opposed. There’s specific criteria we’ve used to determine if an ordinance is restrictive, but by and large, it’s pretty easy to tell once a county sends you an ordinance if it is going to restrict development or not.
The vast majority of counties responded, and this has been a process that’s allowed us to gather an extraordinary amount of data about whether counties have been restricting wind, solar and other renewables. The topline conclusion is that restrictions are much worse than previously accounted for. I mean, 605 counties now have some type of restriction on renewable energy — setbacks that make it really hard to build wind or solar, moratoriums that outright ban wind and solar. Then there’s 182 municipality laws where counties don’t have zoning jurisdiction.
We’re seeing this pretty much everywhere throughout the country. No place is safe except for states who put in laws preventing jurisdictions from passing restrictions — and even then, renewable energy companies are facing uphill battles in getting to a point in the process where the state will step in and overrule a county restriction. It’s bad.
Getting into the nitty-gritty, what has changed in the past few years? We’ve known these numbers were increasing, but what do you think accounts for the status we’re in now?
One is we’re seeing a high number of renewables coming into communities. But I think attitudes started changing too, especially in places that have been fairly saturated with renewable energy like Virginia, where solar’s been a presence for more than a decade now. There have been enough projects where people have bad experiences that color their opinion of the industry as a whole.
There’s also a few narratives that have taken shape. One is this idea solar is eating up prime farmland, or that it’ll erode the rural character of that area. Another big one is the environment, especially with wind on bird deaths, even though the number of birds killed by wind sounds big until you compare it to other sources.
There are so many developers and so many projects in so many places of the world that there are examples where either something goes wrong with a project or a developer doesn’t follow best practices. I think those have a lot more staying power in the public perception of renewable energy than the many successful projects that go without a hiccup and don’t bother people.
Are people saying no outright to renewable energy? Or is this saying yes with some form of reasonable restrictions?
It depends on where you look and how much solar there is in a community.
One thing I’ve seen in Virginia, for example, is counties setting caps on the total acreage solar can occupy, and those will be only 20 acres above the solar already built, so it’s effectively blocking solar. In places that are more sparsely populated, you tend to see restrictive setbacks that have the effect of outright banning wind — mile-long setbacks are often insurmountable for developers. Or there’ll be regulations to constrict the scale of a project quite a bit but don’t ban the technologies outright.
What in your research gives you hope?
States that have administrations determined to build out renewables have started to override these local restrictions: Michigan, Illinois, Washington, California, a few others. This is almost certainly going to have an impact.
I think the other thing is there are places in red states that have had very good experiences with renewable energy by and large. Texas, despite having the most wind generation in the nation, has not seen nearly as much opposition to wind, solar, and battery storage. It’s owing to the fact people in Texas generally are inclined to support energy projects in general and have seen wind and solar bring money into these small communities that otherwise wouldn’t get a lot of attention.