Good day, Protocol Climate friends and family. Today we’re looking at the new EV tax credit conundrum and how an entrepreneur decided to leave behind a dream job at Alphabet’s X lab to start a geothermal energy company — and find happiness. It’s enough to make your Protocol Climate team want to pivot to blueberry tart making full time. (Don’t worry, we’ll be right back here next week.) Read on!
The IRA has an EV tax credit problem The Inflation Reduction Act is bringing mo' money to the electric vehicle industry — but it’s also creating mo' problems, thus proving Biggie right. A handful of automakers are salty about how the EV tax credits in the bill are structured, for a variety of reasons, and claiming they’ll slow the EV adoption rollout. The incentive structure could be so detrimental, they argue, that automakers’ and the Biden administration’s EV targets for 2030 could be thrown into jeopardy. The IRA is tearing down some roadblocks … Before we go into the IRA’s EV challenges, let’s reflect on the fact that it does some good for the industry.Most importantly, it no longer phases out the $7,500 tax credit once automakers sell 200,000 EVs. That means automakers from Chevy to Tesla are suddenly back in the tax credit game.It also includes a new $4,000 tax credit for used EVs for households with an annual income below $150,000 and individuals who make below $75,000.There’s also a new tax credit for commercial fleets. Sara Baldwin, the director of electrification policy at Energy Innovation, said they’re “expected to spur the adoption [of] more commercial EVs and electrified fleets.” … but it’s throwing up a lot more new ones. EV tax credits have been a sore subject for Sen. Joe Manchin ever since Democrats introduced the Build Back Better Act. And with the IRA, some of his gripes have helped shape the bill.While the EV cap is gone for the tax credit, there’s now a price cap in place. EVs that come in under $55,000 for cars and $80,000 for SUVs and trucks are eligible under the IRA. For a company like Tesla, the prices of most of its current models mean they’re ineligible for the tax credit despite the EV sales cap lifting.The bill also includes provisions that kick in by 2024 that put further pressure on automakers. Half the credit would be tied to EV makers sourcing at least 40% of battery materials from mines or processors in the U.S. or countries where the country has free trade agreements. Batteries made with materials recycled in North America would qualify as well.The other half of the tax credit would be tied to manufacturing battery components in the U.S.Oh, and vehicles with any minerals from a “foreign entity of concern” would also fail to qualify for any of the tax credit. That includes China, which currently has a stranglehold on the world’s critical mineral supply.In short, it’s all about the minerals, baby. (OK, we will stop it with the ’90s hip-hop references, sorry.) All this has automakers and trade partners up in arms. The supply chain is already a mess, and tracking where minerals come from is among the most challenging aspects to decode. Like everything else, prices for EVs have been on the rise all year (with one notable exception). Heck, Ford just jacked the price of the F-150 Lightning up by as much as $8,500 this week.These challenges have led the Alliance for Automotive Innovation, a group that includes GM, Volkswagen and Toyota among its ranks, to decry the bill’s requirements.John Bozzella, the group’s president, wrote in a blog post that 70% of current EV models “would immediately become ineligible when the bill passes and none would qualify for the full credit when additional sourcing requirements go into effect.”Many automakers have set EV sales goals of around 50% by 2030, a target the Biden administration has also set. But, Bozzella said, the new tax credit structure will make meeting those targets an uphill slog.The EU is also ticked about the mined-in-America provisions, claiming it could be in violation of World Trade Organization rules. Still, Baldwin said there are other policies in the bill that “could have a transformative impact on the U.S. economy and position the U.S. as a global competitor in EVs and other clean tech” in the mid to long term. The climate would also like a word. The atmosphere does not have a trade group or political body to chime in, but I can’t imagine it’s overly happy about the way the new EV tax credits are structured either. Electric vehicles don’t emit carbon pollution (or other air pollution, for that matter). It stands to reason that getting more people out of gas-powered cars and into EVs, regardless of income, would be a net benefit for the climate.Robbie Orvis, Energy Innovation’s senior director of energy policy design, said the group’s model shows the transportation sector accounts for a “comparatively small share” of the IRA’s emissions cuts, partly due to the weaker tax credits and partly due to the sheer number of internal combustion vehicles on the road. Even as it stands, the legislation — assuming it passes the House this week — could lower U.S. greenhouse gas emissions roughly 40% below 2005 levels by 2030. Still, it’s hard not to think about how a set of more robust EV tax credits could’ve cut emissions even further. — Brian Kahn How I made the most of a ‘rare’ opportunity Kathy Hannun was working at Alphabet’s X innovation lab — which is devoted to researching and cultivating moon shot ideas — when she came across a relatively untapped opportunity in the U.S.: drilling into the Earth’s crust to access thermal energy for home use. What followed was the decision that made her career. Because the idea didn’t quite fit the definition of moon shot (geothermal technology already existed and was widely used in countries like Sweden), she could either let it go and stay in a job she loved or say farewell and start her own company. She went with the latter option and hasn’t looked back, co-founding Dandelion Energy with James Quazi in 2017. Five years later, Hannun said, the company is growing as fast as can be, but it wasn’t initially clear that it would be the success it has become. Hannun’s story, as told to Protocol, has been edited for clarity and brevity. We did an analysis of how much money people could save if they hypothetically switched from these expensive fossil heating fuels to geothermal heat pumps, and it was just astronomical. So it seemed like this great opportunity where the financial interests of homeowners were very well aligned with the most environmentally friendly solution. I started to think that a spin-out might be a good option when it became clear that we actually had to start installing thermal heat pumps. The work we had done on the market analysis had made it clear that New York was the best state to start this business in. Alphabet is a very famous and very strong brand, and we recognized that we needed to be very careful doing things like drilling 500-foot holes in customers’ yards under the then-Google brand. There's just a lot of risk there. It became increasingly clear that the reality of Alphabet as an amazing company was not necessarily compatible with the need to prove out our idea on the ground. While we didn’t need that much money to get started, I had a lot of personal trepidation. I did not feel like I knew how to start a business; I had only really ever professionally worked at Google, so it was a very daunting idea. I remember the day that it dawned on me that this had to be a spin-out to work. I was so stressed that day — literally shaking with anxiety — because I knew I was going to spin it out, even though a very large part of myself really didn’t want to because I knew it would be way outside of my comfort zone. But it was so rare to find an opportunity like that: where it will be so meaningful to me and will help so much on these issues that I care about if it works. I wanted to be the type of person that would seize that type of opportunity. Get the full scoop behind how Hannun made her decision and what she learned here.— Lisa Martine Jenkins SPONSORED CONTENT FROM CISCO How cybercrime is going small time: Cybercrime is often thought of on a relatively large scale. Massive breaches lead to painful financial losses, bankrupting companies and causing untold embarrassment, splashed across the front pages of news websites worldwide. Read more from Cisco Make it rain The electric vehicle charging game continues to add new players. The startup WiTricity secured $63 million in its latest funding round; Siemens AG led with a $25 million investment. Australian hydrogen electrolyzer company Hysata has raised $29.5 million in its Series A round led by Virescent Ventures on behalf of the Clean Energy Finance Corporation. The company claims its high-efficiency electrolyzer reduces costs for green hydrogen. Project Solar is a solar installer without pushy sales reps, which it claims creates a “frictionless sales and installation funnel.” This week, it raised $23 million in Series A funding led by Left Lane Capital. Berlin-based satellite analytics startup LiveEO raised $19.5 million, one of the largest investments in Earth observation tech in Europe, according to the company. Backers include MMC Ventures, the European Commission and Investitionsbank Berlin. The British QLM Technology developed a positively futuristic camera to detect and quantify greenhouse gas emissions, and raised roughly $14.7 million in its Series A funding round, led by the oil field services company Schlumberger. The two companies also signed an agreement to collaborate as a part of Schlumberger’s existing methane-reduction business. Vespene Energy is also focused on emissions and specifically methane mitigation, but from the waste rather than the energy sector. The startup developed a technology to use methane from landfills to mine bitcoin, and this week closed a $4.3 million financing round led by Polychain Capital.Beacon Power Services, a Nigerian startup offering tools to manage the grid and distribute power more efficiently, closed a seed funding round of $2.7 million, led by Seedstars Africa Ventures. The company’s focus is on sub-Saharan Africa. Hot links Another hurdle for the solar industry: Panels have been seized at the border in the weeks since the U.S. began enforcing a law requiring companies to prove imports have not been made with forced labor in China’s Xinjiang region. Buying Twitter isn’t Elon’s biggest mistake. It’s selling the dream that tunnels could solve urban transit woes and the climate crisis. Ford ❤️ solar. In what the automaker describes as the biggest-ever renewables purchase from a U.S. utility, the Michigan power company DTE will add 650 megawatts of solar to the grid specifically to keep the lights on at Ford’s facilities. Energy storage is getting a leg up. The Inflation Reduction Act would offer tax incentives for stand-alone energy storage for the very first time, offering the sector a glide path to the mainstream. Investors are pouring billions into compostable or even biodegradable alternatives to plastics. Now if only they were pouring money into facilities that could recycle bioplastic (or stopping forking over money for single-use items in the first place).EV subscriptions are about to become an even bigger thing. The startup Autonomy will allow users to subscribe to use an EV from its fleet of 23,000 battery-powered cars, many of which are by Tesla or GM. SPONSORED CONTENT FROM CISCO How cybercrime is going small time: People have been swindled since before man created monetary systems. These aren’t new crimes; just new ways to commit them. But as cybercrime increasingly goes small-time, those on the front lines will need new and more effective ways to fight it. Read more from Cisco
The Inflation Reduction Act is bringing mo' money to the electric vehicle industry — but it’s also creating mo' problems, thus proving Biggie right.
A handful of automakers are salty about how the EV tax credits in the bill are structured, for a variety of reasons, and claiming they’ll slow the EV adoption rollout. The incentive structure could be so detrimental, they argue, that automakers’ and the Biden administration’s EV targets for 2030 could be thrown into jeopardy.
The IRA is tearing down some roadblocks … Before we go into the IRA’s EV challenges, let’s reflect on the fact that it does some good for the industry.
… but it’s throwing up a lot more new ones. EV tax credits have been a sore subject for Sen. Joe Manchin ever since Democrats introduced the Build Back Better Act. And with the IRA, some of his gripes have helped shape the bill.
All this has automakers and trade partners up in arms. The supply chain is already a mess, and tracking where minerals come from is among the most challenging aspects to decode. Like everything else, prices for EVs have been on the rise all year (with one notable exception). Heck, Ford just jacked the price of the F-150 Lightning up by as much as $8,500 this week.
The climate would also like a word. The atmosphere does not have a trade group or political body to chime in, but I can’t imagine it’s overly happy about the way the new EV tax credits are structured either.
Even as it stands, the legislation — assuming it passes the House this week — could lower U.S. greenhouse gas emissions roughly 40% below 2005 levels by 2030. Still, it’s hard not to think about how a set of more robust EV tax credits could’ve cut emissions even further.
Kathy Hannun was working at Alphabet’s X innovation lab — which is devoted to researching and cultivating moon shot ideas — when she came across a relatively untapped opportunity in the U.S.: drilling into the Earth’s crust to access thermal energy for home use.
What followed was the decision that made her career. Because the idea didn’t quite fit the definition of moon shot (geothermal technology already existed and was widely used in countries like Sweden), she could either let it go and stay in a job she loved or say farewell and start her own company.
She went with the latter option and hasn’t looked back, co-founding Dandelion Energy with James Quazi in 2017. Five years later, Hannun said, the company is growing as fast as can be, but it wasn’t initially clear that it would be the success it has become.
Hannun’s story, as told to Protocol, has been edited for clarity and brevity.
We did an analysis of how much money people could save if they hypothetically switched from these expensive fossil heating fuels to geothermal heat pumps, and it was just astronomical. So it seemed like this great opportunity where the financial interests of homeowners were very well aligned with the most environmentally friendly solution.
I started to think that a spin-out might be a good option when it became clear that we actually had to start installing thermal heat pumps. The work we had done on the market analysis had made it clear that New York was the best state to start this business in.
Alphabet is a very famous and very strong brand, and we recognized that we needed to be very careful doing things like drilling 500-foot holes in customers’ yards under the then-Google brand. There's just a lot of risk there. It became increasingly clear that the reality of Alphabet as an amazing company was not necessarily compatible with the need to prove out our idea on the ground.
While we didn’t need that much money to get started, I had a lot of personal trepidation. I did not feel like I knew how to start a business; I had only really ever professionally worked at Google, so it was a very daunting idea. I remember the day that it dawned on me that this had to be a spin-out to work.
I was so stressed that day — literally shaking with anxiety — because I knew I was going to spin it out, even though a very large part of myself really didn’t want to because I knew it would be way outside of my comfort zone. But it was so rare to find an opportunity like that: where it will be so meaningful to me and will help so much on these issues that I care about if it works. I wanted to be the type of person that would seize that type of opportunity.
Get the full scoop behind how Hannun made her decision and what she learned here.
How cybercrime is going small time: Cybercrime is often thought of on a relatively large scale. Massive breaches lead to painful financial losses, bankrupting companies and causing untold embarrassment, splashed across the front pages of news websites worldwide.
The electric vehicle charging game continues to add new players. The startup WiTricity secured $63 million in its latest funding round; Siemens AG led with a $25 million investment.
Australian hydrogen electrolyzer company Hysata has raised $29.5 million in its Series A round led by Virescent Ventures on behalf of the Clean Energy Finance Corporation. The company claims its high-efficiency electrolyzer reduces costs for green hydrogen.
Project Solar is a solar installer without pushy sales reps, which it claims creates a “frictionless sales and installation funnel.” This week, it raised $23 million in Series A funding led by Left Lane Capital.
Berlin-based satellite analytics startup LiveEO raised $19.5 million, one of the largest investments in Earth observation tech in Europe, according to the company. Backers include MMC Ventures, the European Commission and Investitionsbank Berlin.
The British QLM Technology developed a positively futuristic camera to detect and quantify greenhouse gas emissions, and raised roughly $14.7 million in its Series A funding round, led by the oil field services company Schlumberger. The two companies also signed an agreement to collaborate as a part of Schlumberger’s existing methane-reduction business.
Vespene Energy is also focused on emissions and specifically methane mitigation, but from the waste rather than the energy sector. The startup developed a technology to use methane from landfills to mine bitcoin, and this week closed a $4.3 million financing round led by Polychain Capital.
Another hurdle for the solar industry: Panels have been seized at the border in the weeks since the U.S. began enforcing a law requiring companies to prove imports have not been made with forced labor in China’s Xinjiang region.
Buying Twitter isn’t Elon’s biggest mistake. It’s selling the dream that tunnels could solve urban transit woes and the climate crisis.
Ford ❤️ solar. In what the automaker describes as the biggest-ever renewables purchase from a U.S. utility, the Michigan power company DTE will add 650 megawatts of solar to the grid specifically to keep the lights on at Ford’s facilities.
Energy storage is getting a leg up. The Inflation Reduction Act would offer tax incentives for stand-alone energy storage for the very first time, offering the sector a glide path to the mainstream.
Investors are pouring billions into compostable or even biodegradable alternatives to plastics. Now if only they were pouring money into facilities that could recycle bioplastic (or stopping forking over money for single-use items in the first place).
How cybercrime is going small time: People have been swindled since before man created monetary systems. These aren’t new crimes; just new ways to commit them. But as cybercrime increasingly goes small-time, those on the front lines will need new and more effective ways to fight it.
Thanks for reading! As ever, you can send any and all feedback to climate@protocol.com. See you next week!
To give you the best possible experience, this site uses cookies. If you continue browsing. you accept our use of cookies. You can review our privacy policy to find out more about the cookies we use.