Current Climate: China’s EV Edge Accelerates As U.S. Goes Into Reverse

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The Trump Administration’s rapid reversal on U.S. clean energy and climate policies is creating headaches for many domestic manufacturers. The changes are especially disruptive for automakers that have spent the past few years–and billions of dollars–to develop cheaper, better electric vehicles.

Ending federal tax credits for EV buyers of up to $7,500 and cutting off federal support, things Trump has lumped into the “green new scam” category, won’t kill U.S. sales but is expected to slow them down this year. Meanwhile, in China, the world’s largest EV market, things continue to heat up.

Homegrown Chinese giants, including EV and battery maker BYD, are keen to expand globally. In fact, BYD just raised $5.6 billion to do exactly that. The company wants to raise sales from overseas markets to half of its total revenue, up from 30% in the first half of 2024. Given the cost advantage it enjoys over U.S. and European carmakers, including Tesla, that’s probably attainable.

Meanwhile, the extent to which China’s push to convert its auto industry to making EVs is also allowing newcomers to flourish. Nowhere is this clearer than how quickly Xiaomi, a maker of smartphones and consumer electronics, capitalized on China’s EV production infrastructure, including cheaper batteries, electronics, processed materials and labor, to sell a remarkable 135,000 units in its first year. As the New York Times pointed out, Apple spent $10 billion and about a decade to develop an electric car that it ultimately decided not to make.

The Trump Administration may not care about EVs, but increasingly the world does. And China is only too happy to dominate that market.

The Big Read

This Startup Has A Way To Make Cheap, Clean Hydrogen–Without Federal Subsidies

Clean hydrogen has the potential to power a number of industrial activities. Interest in its production amped up under President Joe Biden, whose administration earmarked billions of dollars in federal subsidies to help companies make it from things like water and renewable power. Some of those projects are at risk as the Trump Administration reverses course on clean power and climate policy, but Bay Area-startup Graphitic Energy says it has a method of generating hydrogen that’s not only affordable and clean–it simultaneously produces valuable graphite. Best of all, it doesn’t need federal funding.

Graphitic, which has raised $65 million from backers including Bill Gates’s Breakthrough Energy Ventures, Energy Capital Ventures and Trafigura, extracts hydrogen and carbon molecules from natural gas with a method that uses a relatively small amount of electricity, CEO and cofounder Zach Jones told Forbes. Rather than releasing climate-warming carbon, which happens with traditional hydrogen production, or pumping it underground, which some big energy companies are doing, Graphitic turns it into graphite that it intends to sell to industrial customers. The mineral, which can sell for more than $2,500 a metric ton, and is predominantly produced in China right now.

To validate its technique, the company is opening a pilot plant this week at the Southwest Research Institute in San Antonio, it says can make 400 kilograms of hydrogen a day and 1,000 kilograms of synthetic graphite. The plant was built without government assistance. Relative to traditional forms of industrial hydrogen production, Graphitic estimates its process reduces CO2 pollution by 90%. If all goes well, it plans to open its first large-scale facility in 2027.

“In the places where we think there are markets for [hydrogen] you might not have access to renewable electricity,” he said. “So you really need to figure out how to power the whole thing with natural gas.”

Read more here

Hot Topic

Tom Ellison, The Center for Climate & Security’s deputy director, on the Pentagon’s shift on climate policies

Defense Secretary Pete Hegseth indicated plans to eliminate the department’s programs related to climate change. Why is this something it has focused on?

The Defense Department is, among many other things, a really huge logistical organization that has to manage a lot of people and places to get things from point A to point B. They’ve taken interest in this for a long time. A lot of the early work on this came out of broader environmental security conversations within the Pentagon around how to conduct training while also adhering to environmental protection regulations, things like that.

Also around the early mid-2000s, you had studies by folks with the Center for Naval Analysis and senior military officials, where they talked about that threat multiplier concept. So it’s really been pretty consistent over time in the military community, for those sorts of practical reasons.

The beginnings of this would have been in the Clinton administration, but the more climate-specific focus has come in the last 20 years.

What are the potential risks to the military from ignoring climate change?

There’s the physical resilience part. For example, with aircraft there’s an effect on carrying capacity. Runways melt in the heat. Climate change affects aerial activity.

There’s also a foresight and planning piece, both planning and acquiring long-life infrastructure and equipment. And there’s also just the idea that a lot of these climate hazards and vulnerabilities–water insecurity, food insecurity, price spikes, contests over natural resources–all these things can eventually contribute to or lead to conflict. That certainly affects the military.

The military also isn’t just in the U.S., but operates around the world, like a sort of first responder by default to disasters. So if you’re not sufficiently prepared, even if you’re unwilling or unable to meet that increased demand, there are serious implications for your citizenry, for your other missions, all these other things.

What Else We’re Reading

U.S. State Department shuts down pollution monitoring abroad. Since 2008, embassies and other diplomatic posts had been publishing data about local air quality. In many countries, it was the only reliable source of such information. (New York Times)

Cutting AI down to size. Many artificial intelligence models are power hungry and expensive. Researchers in the Global South are increasingly embracing low-cost, low-power alternatives (Science)

The growing threat of catastrophic flooding in rural America. Climate change is driving more intense and frequent extreme precipitation events, increasing the likelihood of catastrophic flooding across the U.S. (Pacific Institute)

Efforts to plant trees in neighborhoods that badly need them will be set back by the U.S. Forest Service’s decision to terminate a $75 million grant to the Arbor Day Foundation. It’s another victim of President Donald Trump’s push to overturn environmental justice initiatives. (Associated Press)

The Trump administration plans to drop a federal lawsuit against a synthetic rubber manufacturer accused of worsening cancer risks for residents in a majority-Black community in Louisiana. The move would undo one of former President Joe Biden’s highest-profile targets for improving conditions in places harmed by industrial pollution. (Associated Press)

Renewables will beat fossil fuels over time despite Trump’s efforts. Fossil fuels are much more expensive than renewable sources when considering health and environmental costs—a key reason to keep the endangerment finding intact. (Forbes)

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