Aug 7, 2020

Axios Generate

By Ben Geman
Ben GemanAmy Harder

Welcome back! Today's Smart Brevity count: 1,213 words, 4.5 minutes.

🎵 And this week in 1983, Dire Straits' "Love Over Gold" was only at #41 on the U.K. album charts, but it was once #1 and provides today's intro tune...

1 big thing: GM's high-stakes electric move

The Cadillac Lyriq. Image courtesy of Cadillac

Check out that photo above! You're looking at an SUV that's spearheading General Motors' fraught, expensive push into electric vehicles.

Driving the news: Last night Cadillac unveiled the Lyriq, the luxury brand's first all-electric model and GM's first consumer EV unveil since the Chevy Bolt several years ago.

Why it matters: It's the first reveal by GM of an EV that will use the company's new modular platform and Ultium battery system — technologies meant to underpin the 20 EVs that GM plans to launch by 2023.

  • GM is pouring $20 billion over the next five years in electric and autonomous vehicles — a big bet that they will eventually become a profit segment.
  • That push also includes the upcoming unveiling of the electric GMC Hummer this fall, which will actually go into production before the Lyriq.

The intrigue: The auto industry is making a wider bet that EVs can break through in the huge, lucrative SUV market, but Cadillac will have lots of competition, and not only from Tesla.

  • It's also part of a reboot for the Cadillac brand, which is slated to unveil several EVs at a time it's long removed from being the top of the food chain in the U.S. luxury market.

What's next: It'll take a while to show up in U.S. dealerships. U.S. production is slated to start in late 2022, not long after launch of the vehicle in China, the world's largest auto market.

By the numbers: Cadillac said the Lyriq will have over 300 miles of range based on a single charge of the 100 kWh battery pack.

  • Its interior features include a 33-inch LED screen. The pricing isn't yet clear, but it will likely begin under $75,000, per several reports.

Threat level: The electric SUV market is looking like a brutally competitive space, with a bunch of automakers fighting for what's still a small pool of EV buyers.

  • "The Lyriq will go up against not only the Model X from Tesla but also Jaguar’s I-Pace and the e-tron from Audi, two models that have already been selling in the North American market," Kelley Blue Book analyst Eric Ibara notes.
  • He also points out that brands including Mercedes-Benz and BMW are bringing new electric SUVs to market.
  • And startups Rivian and Fisker are also bringing electric SUVs to market, with Rivian's launching next year.

What they're saying: "The stakes are high for GM as right now Tesla is the one to beat and no one — including the luxury players — have been able to replicate its success," Edmunds analyst Jessica Caldwell tells me.

  • She notes that multiple automakers have changed their strategies to emphasize premium models to better compete with Tesla.
  • "The introduction of the Cadillac Lyriq and the GMC Hummer will bring premium EVs to the GM lineup in an attempt to steal these desirable, affluent electric buyers away from Elon Musk," Caldwell says.

Go deeper: Cadillac Lyriq EV: Pictures, technology, range and details of GM's all-electric SUV (CNET)

Bonus chart: The rise of SUVs
Adapted from the International Energy Agency; Chart: Naema Ahmed/Axios

The growing competition in the electric SUV market is more than just a corporate story. It's a climate story too.

The big picture: SUVs are getting more popular worldwide, but right now these big vehicles are almost all petroleum-powered. So it's worth watching if electric models can move beyond niche status.

Go deeper: New warning about SUVs' climate toll

2. Pandemic shifts power bills to residents

A new Wall Street Journal story makes an important point: While overall energy use declined when lockdowns took effect, residential power costs rose for many people.

Why it matters: It shows how staying at home means moving energy costs from offices to homes, "a shift that, with the accompanying expense, could make things worse for those already suffering financially as a consequence of the pandemic," they report.

How it works: A Columbia University project, which has been monitoring hundreds of New York City apartments since 2018, found an average 23% rise in electricity use during business hours after stay-at-home orders took effect in March, per WSJ.

  • "The apartments, they said, roughly match the diversity of the city’s residential building stock, and the researchers anticipated that other areas of the country observing stay-at-home orders would have experienced similar changes in energy use."

Go deeper: Low-income households are struggling to pay energy bills during pandemic

3. The Amazon's latest climate threat

BR-319 Highway. Photo: Carolle Alarcon Eichmann/IDESAM

Axios' Eileen Drage O’Reilly reports: Paving a Brazilian highway that runs through the Amazon without environmental studies could lead to massive deforestation and large carbon dioxide releases, two scientists warn in a letter published in Science Thursday.

Where it stands: The BR-319, sometimes called "Brazil's worst highway," is a 800 km mostly dirt road from Porto Velho through the Amazon forest to the city of Manaus in the middle.

  • The highway was built by the military in 1973 but mostly abandoned in 1988 and is difficult to navigate as less than one-third is paved now.

Driving the news: While a judicial decision had previously ruled that environmental studies must be carried out before paving the highway, President Jair Bolsonero has started moving forward, according to co-author Lucas Ferrante, a post-graduate student at the National Institute for Research in Amazonia (INPA).

Why it matters: These moves will "likely accelerate anthropogenic climate change" and negatively impact Indigenous communities, per the letter co-authored by INPA professor Philip Martin Fearnside.

  • Planned reconstruction includes many secondary roads, including some the authors consider "illegal," which together are projected to lead to more than 138,000 square kilometers of deforestation by 2100.
  • That's an increase of cumulative deforestation of 1,291%, when compared with the area cleared by 2011, Ferrante says.
  • The analysis comes as estimates of soaring illegal deforestation have already led to a global backlash over Bolsonero's lack of Amazon protections.

What they're saying: John Miller, a carbon scientist at NOAA Global Monitoring Laboratory, says the situation is "concerning" and that the letter's overall point is true.

  • But he adds further data should be presented behind some of the "grand statements," such as the 1,291% increase from 2011.

Read more

4. Catch up fast: carbon capture, OPEC, Iran

Coal: "A $1 billion project to harness carbon dioxide emissions from a Texas coal plant suffered chronic mechanical problems and routinely missed its targets before it was shut down this year, according to a U.S. Department of Energy report." (Reuters)

Crude oil: "Iraq made its strongest commitment yet to implement deep cuts in crude production after the country’s oil minister and his Saudi counterpart held a phone call Thursday." (Bloomberg)

Personnel: "U.S. Special Representative for Iran Brian Hook is resigning from his role at the State Department, Secretary of State Mike Pompeo announced Thursday, and will be replaced by Special Representative for Venezuela Elliott Abrams." (Politico)

5. Following up: Biden's political path on climate

ICYMI: Yesterday I wrote about how the Senate filibuster's fate will influence the chances of moving a big energy and climate bill if Joe Biden wins and Democrats control Congress.

Yes, but: Not every story says everything! But I should have mentioned — again — that Senate rules already make some big bills immune from filibuster, which is one option if the filibuster remains intact.

Why it matters: "Budget reconciliation" offers a tricky, once-a-year path to make big policy changes. In 2017, the GOP used it to end the drilling ban in the Arctic National Wildlife Refuge without the 60-vote hurdle.

  • But reconciliation measures, which make spending- and revenue-related changes link to a separate budget blueprint, must stay within certain parameters.

The bottom line: It's an idea already in the bloodstream around climate legislation. But Carol Browner, former President Obama's top climate aide, recently summed it up in E&E News this way: "It's complicated."

Go deeper: Democratic hopes for climate policy may come down to this one weird Senate trick (Vox)

Editor’s note: Story 5 was corrected to show the GOP ended the Arctic National Wildlife Refuge drilling ban in 2017 (not 2018).

Ben GemanAmy Harder