Good morning and welcome back to a rather transportation-heavy edition of the newsletter.
Generate is taking next week off, including Amy Harder's column, but keep your eyes on the Axios stream for energy news.
And 25 years ago, Cypress Hill was about to snag the top slot on Billboard's album charts with "Black Sunday," so they'll take us into the weekend...
Tesla's fate will have an outsized influence on something far more important than any one company: the future growth of electric vehicles.
Driving the news: Tesla's stock is up this week after its decent second quarter financials and a renewed pledge to be profitable later this year. But Tesla's long-term health is a question mark as it ramps up production of the Model 3 sedan.
Why it matters: The future of EV adoption, in the U.S. but elsewhere too, remains bound up with Tesla even as other automakers bring more models to market and overall sales rise.
Where it stands: Right now, Tesla represents a third of the U.S. market for plug-in vehicles (including full electrics like Tesla's line and plug-in hybrids), as the chart above shows.
On the other side: Paul Ruiz, policy analyst with Securing America's Future Energy, says:
“Losing Tesla would have a big impact on the EV market, especially in the short term."
“On the other hand, in the medium and long-term, a lot of these automakers have made sizable investments in EVs, and the EV infrastructure nationwide is continuing to grow."
Meanwhile: Looking at China, where officials are strongly pushing EV deployment in the world's biggest auto market, Tesla wouldn't have as much impact as other manufacturers play a greater role. However, many parts of Europe would be affected by Tesla's fate.
Go deeper: Read the full story in the Axios stream.
There's plenty of fallout from the Trump administration proposal to weaken Obama-era auto mileage and carbon emissions rules. Here are a few angles...
Oil lobbying: Bloomberg reports that oil producers "quietly lobbied" for the measure that freezes standards in place at 2020.
California's war: The Los Angeles Times' coverage delves into how California plans to fight the plan, which would strip the state's power to set tougher emissions rules and mandate EV sales.
Climate impact: This analysis by the Rhodium Group consultancy explores how the plan could affect future U.S. CO2 emissions. There are all kinds of variables and uncertainties, but it states...
A new report from the consultancy Verisk Maplecroft explores how rising heat stress could hinder exports in nations where hydrocarbons and mining are major industries.
Why it matters: The analysis adds to research on the economic risks posed by global warming in the decades ahead, focusing on regions where high heat and humidity will increasingly create very dangerous conditions for strenuous outdoor activity.
Where it matters: Central Africa, West Africa, the Middle East and North Africa face risks to extractive industries.
Electricity warning: Elsewhere, the report examines how the convergence of rising heat, rising urbanization and booming demand for cooling will put massive strains on electricity grids.
Let's revisit something we explored last month: modeling that shows carbon taxes high enough to slash electricity emissions would have little effect on CO2 from transportation.
Taking exception: A new commentary from Columbia University economist Noah Kaufman says transportation emissions probably aren't as resistant to carbon pricing as some studies predict. Kaufman, who's with Columbia's Center on Global Energy Policy, writes...
"[T]he effect of a carbon tax on vehicle emissions may be more substantial than conventional wisdom suggests."
Why it matters: Transportation has overtaken power as the largest source of U.S. carbon emissions, and the commentary arrives as the Trump administration moves to weaken Obama-era aut0 mileage and emissions rules.
The big picture: Kaufman argues that while, yes, Americans change driving habits much in response to gasoline price fluctuations, "they are not immune to larger responses when the price changes are due to policy shifts."
"Policy changes are more permanent than typical price fluctuations. Drivers may not pay attention to small changes in prices at the pump, but new policies create price changes that are more noticeable because they are often well publicized and involve 'shocks' rather than gradual price changes," he writes.
Kaufman also says evidence is beginning to emerge about the interplay between driving and CO2 taxes, including a detailed study about British Columbia which showed that reactions to their tax have been at least three times greater than responses to equivalent pump price changes.
The bottom line: "For sure, a carbon price by itself will not rapidly decarbonize the transportation sector, but it is an important component of a cost-effective strategy for addressing vehicle emissions."
Around the world, national and municipal governments are experimenting with ways to cope with growing transportation demands in the face of economic and environmental pressures — some more successfully than others, Axios' Zach Basu reports.
Read more of Zach's story in the Axios stream.