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A RISK FOR BIDEN’S ELECTRIC VEHICLE PLANS: A leading automotive trade group says the Biden administration must get the pace and scale of its electric vehicle-forcing policies just right or else hand China an additional set of advantages over domestic and allied car manufacturers.
President and CEO John Bozzella of the Alliance for Automotive Innovation, whose membership includes all the major brands in the U.S., diagnosed the administration as having a “Goldilocks problem” with its proposed EV transition and draft vehicle emissions rules in particular: “Too fast: advantage China. Too slow: advantage China,” Bozzella wrote in a new blog post.
The too fast risks: One side of the coin is minerals. The Inflation Reduction Act’s tax credits incentivizes automakers to invest in new mines or ink deals with existing or in-the-works projects that comply with the EV tax credit’s sourcing conditions.
Bozzella suggests that growth of domestic and “friendshored” mineral supplies will lag the timelines made necessary by EPA’s proposed regulations, which envision 37% of new light-duty vehicles being battery electric by 2027 — up from some 5%-6% last year — and the only way to meet that threshold will be to tap into the vast mineral and battery component supply chain managed by Chinese companies.
“If U.S. regulators and policymakers move too fast on EV mandates over the next several years, I predict China gains a stronger foothold in America’s EV battery supply chain and eventually our automotive market,” Bozzella writes.
This would achieve the inverse of what Congress and President Joe Biden sought to do with the enhanced EV tax credits, which Democrats have firmly defended against a Republican campaign to discredit the IRA as a boon for Chinese industry.
The other side of the coin is making expansion into the U.S. vehicle market a more valuable proposition for Chinese EV makers, who serve what is by far the globe’s largest EV market, by targeting such exponential growth in EV penetration and enforcing it with emissions regulations.
“Before long, Chinese automakers will accelerate their entrance into the American market with low-priced EVs that meet the aggressive (and arbitrary) EPA requirements for model years 2027-2032,” Bozzella writes.
“And if China moves deeper into the U.S. auto market and sells the EVs necessary to meet EPA’s mandates, it can, in turn, sell credits to American and other automakers that don’t sell as many EVs. Tesla’s been running that play for years, but this is a whole new level,” he adds. “I’m talking about allowing Chinese automakers to double-dip and make (more) money precisely because EPA is requiring an electric ramp up that’s not possible – right now.”
Risks of moving too slowly: Electrifying transport too slowly carries a risk of further entrenching Chinese control of mining, mineral processing, and battery manufacturing: “Failure to scale up and move with sufficient urgency gives China the running room to lock up global EV supply chains and expand into other global auto markets.”
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NORD STREAM LATEST – DUTCH TIPPED OFF CIA ABOUT ALLEGED UKRAINE EXPLOSION PLANS: A Dutch military intelligence agency tipped off the CIA last June about Ukraine’s alleged plan to attack the Nord Stream natural gas pipeline linking Russia to Germany, prompting the U.S. to warn Kyiv not to move forward with its plans, according to new reports from Dutch and German broadcasters.
Ukraine agreed to cancel its plans in June following the CIA’s warning. But just three months later, both the Nord Stream 1 and 2 pipelines were hit by a series of explosions that closely resembled Kyiv’s plans… Read the latest from Breanne here.
GERMANY SECOND MOST ATTRACTIVE FOR RENEWABLES INVESTMENT: Germany has overtaken China as the second most attractive country in the world for renewable energy investment, according to a new report from global consultancy EY, falling just behind the U.S. as leaders in Berlin looks to speed up their transition away from fossil fuels and embrace more renewable power.
The EY annual Renewable Energy Country Attractiveness Index (RECAI) praised Germany’s ambitious target of reaching 80% renewable energy on its grid by 2030.
Currently, renewables account for 46% of Berlin’s energy mix—a 5% increase since the start of 2022 and prior to Russia’s war in Ukraine, which throttled Russian energy supplies to the EU.
“While this is a major milestone in its progress to accelerated energy transition targets, there is likely to be an increase in the use of coal in the short term, to reduce the effects of intermittency in the power supply,” the report said.
The U.S. continued to rank first on the list, bolstered by last year’s passage of the Inflation Reduction Act and its earmarking of $369 billion for energy security and clean energy. Read the report here.
TOYOTA OUTLINES PATH TO SELLING 1.5 MILLION EVS BY 2026: A top Toyota executive said the company is confident about its goal of manufacturing and selling 1.5 million EVs by 2026, an ambitious target that comes after it sold just 38,000 battery EVs during the last fiscal year.
Speaking in Tokyo, Hiroki Nakajima, Toyota’s chief technology officer, said the vehicles will be ready for consumers in three years, amid rising consumer demand.
“Development and production will be ready when there’s demand for 1.5 million units,” Nakajima said at an event. The confident projection breaks with the years of caution espoused by the automaker as it has sought to align its production with what it views as consumer demand for purely electric battery vehicles.
Nakajima stopped short of offering specifics when asked about sales goals for 2030, however, citing unknowns about markets, potential regulatory requirements, and other concerns. “There’s a reasonable basis for the target of 3.5 million units in 2030, but it is also quite far in the future,” Nakajima said. “It is true that we are still trying to assess whether that’s going to happen, for sure.”
FORMER BIDEN AND CLINTON OFFICIALS PUSH FOR HARMONY ON CBAMS: A new proposal from the Progressive Policy Institute recommends the U.S., EU, and broader G-7 establish an “Alliance for Clean Trade” to get on the same page as they develop and implement carbon border adjustment mechanisms.
Ed Gresser, a former assistant U.S. trade representative, and Paul Bledsoe, a former Clinton White House climate aide, suggest crafting a low-emissions trade deal between closely allied nations so they’re not working on different planes and pricing carbon differently, or targeting different industrial sectors.
That’s how things are trending now: The EU’s CBAM, which takes effect in 2026, imposes a roughly $90 per ton fee on imported products, such as steel, aluminum, and cement.
Sen. Sheldon Whitehouse’s Clean Competition Act, which is one of the CBAMs to be written and proposed in legislation last year, would have levied a $55 per ton fee beginning in 2024.
“The core idea is for the U.S. and EU, joined by other G7 countries and eventually OECD nations, to set emissions standards for high-carbon industries, and impose a fee applying to both local production and imported goods with emissions rates above an agreed emissions intensity standard,” the report said.
PRO-NUCLEAR AD BLITZ CAMPAIGNS FOR REORIENTATION OF THE NRC: The Breakthrough Institute is launching a six-figure ad campaign to promote faster licensing and deployment of advanced nuclear reactors by changing the Nuclear Regulatory Commission’s mandate and making it into a body that helps develop nuclear technologies rather than being primarily a nuclear safety watchdog.
“Build Nuclear Now” will run in several Atlantic states, including Delaware, New Jersey, and Maryland, as well as Hawaii and Arizona, with the intention of ginning up support for advanced nuclear and NRC reform.
“It is critical that the NRC take a more balanced regulatory approach that considers the positive impact of advanced nuclear technology deployment on improving public health, improving overall safety of the U.S. energy system, and decarbonization,” said Ted Nordhaus, BTI’s executive director.
A bipartisan bill in the Senate would go about making some changes to the NRC’s workload to give it a larger role in U.S. nuclear energy diplomacy. Members on the left, including Sens. Ed Markey, Jeff Merkley, and Bernie Sanders, oppose the legislation precisely because lawmakers want to expand NRC’s mandate which, they fear, poses a danger to the public.
NEW ENGLAND UTILITY TO PILOT GEOTHERMAL IN MASSACHUSETTS: Eversource, a utility operating in the Northeast, broke ground yesterday on a pilot project to test the viability of geothermal energy as a supplement to its gas and electric service.
Eversource is building the project in Framingham and has already drilled successful test wells. Its planned distribution route consists of 37 buildings, including 32 residential homes, and the company is targeting completion in September.
If successful, Eversource said it may expand use of geothermal in its service area, which includes Massachusetts, Connecticut, and New Hampshire.
Read more about the pilot here.
GM-SAMSUNG BATTERY PLANT COMING TO INDIANA: The $3 billion EV battery cell plant General Motors is building with Samsung will be constructed in St. Joseph County, Indiana, Gov. Eric Holcomb’s office announced this morning.
The two companies announced the plant in April, estimating that it will employ 1,700 workers. Production is expected to begin in 2026.
The Rundown
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