IRA Ripples Across Pond, Tesla Price Parity, More (Energy Transitions | Week in Review)

A weekly five-point roundup of critical events in the energy transition and the implications of climate change for business and finance. 

Tesla Achieves a Long-Sought Goal: Price Parity

What happened: Buyers of electric vehicles have always been asked to pay more upfront in exchange for value down the road, whether in tax credits or reduced maintenance costs. Now a series of price cuts has meant a new Tesla costs about the same as any other new car.

Why it matters: The price cuts that began earlier this year have divided normally unified Tesla investors. Yet the company’s broader goal — to speed up the transition to renewable power — has always had as a major component the ability to make affordable cars more readily available to all consumers. This achievement means life gets that much harder for traditional automakers who, even prior to the drastic price cuts, were selling their own EVs at a major loss.

What’s next: Everything about Tesla timelines is fungible. But the goal of building and selling tens of millions of cars has always remained the same. Expect the prices to continue to drop. (By Tom Randall, Bloomberg)

The UK Doesn’t Really Want to Reshape Its Electricity Market After All

What happened: A long-discussed plan to move Britain from a national electricity market to something more fragmented and local is being reconsidered, in large part because the IRA has made America a much more desirable place to be for renewables investments. 

Why it matters: It’s a huge, complex undertaking. Doing so might result in energy prices that spike in places where a lot of people live but where energy is produced, i.e. it might be very bad for politicians if half of London is suddenly spending 50% more on their electricity bills just because of a benefit that may not come for years, if not decades. 

What’s next: Even the plan’s defenders are starting to have doubts. High risk, high reward plans usually get scrapped by people who have to be re-elected every few years. (By Prashant Rao, Semafor)

Now It’s Gone Too Far: Climate Change to Make Beer Worse, More Expensive

What happened: “A new study in Nature Communications has sounded a sour note for drinkers of European beer, predicting that increasing heat will affect the yield and quality of hops in Germany, Slovenia, and the Czech Republic — potentially making much of the continent’s beer taste worse and cost more.”

Why it matters: Because it’s beer! But also, because agriculture of every kind in every part of the world is now in full adaptation mode. Hop growers are already starting to change practices to keep quality high and cost low, but it’s unclear if it’ll happen in time to make a difference.

What’s next: If Germans detect a noticeable difference in the quality of their pilsners and lagers, everyone will hear about it. (By Jacob Lambert, Heatmap)

Just Kidding, EVs Require Just As Many Auto Workers

What happened: From Trump stump speeches to company projections, it’s a common assumption that because of reduced complexity electric vehicles are easier to manufacture than traditional combustion cars. A new tally, however, suggests the opposite is true.

Why it matters: It’s part of the central conflict of the ongoing UAW fight against America’s three largest automakers. There’s a sense that unions have to lock in gains now in anticipation of coming layoffs. Yet electric vehicles also need battery cells. And when you add in the manufacturing jobs at battery plants, it may take more workers to build a single EV than a traditional ICE vehicle.

What’s next: Seeing if this subversion of the narrative actually catches on or not. (By Emily Pontecorvo, Heatmap)

What Happens When You Elect a Climate Scientist for President?

What happened: One of the top contenders to be Mexico’s next president is 61-year-old Claudia Sheinbaum, the former mayor of Mexico City who also happens to be a climate scientist with her name on some of the world’s most important papers.

Why it matters: “Mexico is the world’s 15th-biggest greenhouse gas emitter, and its emissions are expected to keep rising through 2030, according to Climate Action Tracker. If Sheinbaum were able to reverse that trend, it would be significant in the global fight to rein in climate change…[it’s also] the world’s 11th-biggest oil producer, the only Group of 20 country with no net-zero emissions target, and climate policy experts say it’s gone backward in recent years.”

What’s next: Watch in real time as principles meet political reality. (By Maya Averbuch, Bloomberg)