The battle for the EV future pits legacy automakers against swashbuckling (if cash-strapped) startups, but the new VW-Rivian tie-up suggests a third way forward.

Why it matters: As Axios' Nathan Bomey reports, VW's plan to invest up to $5 billion in Rivian is a major validation of Rivian's tech and an acknowledgment by VW that it's playing catchup in the global EV race.

• Rivian's stock is up nearly 39% in pre-market trading and had climbed around 55% late yesterday as the deal emerged.

Catch up quick: VW and Rivian said their joint venture unveiled yesterday would create EV architecture and software that both automakers will use.

• VW plans an initial investment of $1 billion in the startup that makes SUVs and pickups for the consumer market and supplies vans to Amazon.
• They said it would help lower costs for VW, but also Rivian, which posted a $5.7 billion operating loss in fiscal 2023.
• They see near-term benefits from VW use of Rivian's systems, and they both hope to launch vehicles using tech from the JV later this decade.

The big picture: Incumbents like VW have scale and balance sheets fortified by profitable petro-powered lines, while newcomers often bring impressive tech and buzz.

• And startups need help that deep pockets provide. Consider that Fisker and Lordstown Motors collapsed, and several other new market entrants are struggling.
• "The cost of continuing to go it alone is too high and investors are less keen on EV companies than when Rivian started," University of Michigan business professor Erik Gordon tells Bloomberg.

What they're saying: Edmunds analyst Jessica Caldwell said Rivian needs capital as it struggles with the slowdown in EV demand growth.

• "Volkswagen is jumping on the opportunity to diversify its portfolio as the automotive industry hurtles toward an uncertain electric and autonomous future," she said via email.

Zoom out: The pairing also arrives amid an uncertain EV policy and market landscape.

• Donald Trump has pledged to scuttle President Biden's EV policies, while the recent EU parliamentary elections could slow the bloc's climate efforts.
• Meanwhile, Chinese EV exports to Europe and some other markets have been soaring but have yet to make real inroads in the U.S.
• The White House wants to keep it that way, recently boosting tariffs to 100%, while EU officials also plan new trade penalties.

The bottom line: This probably isn't the last incumbent-startup pairing, especially as low-cost Chinese models put pressure on U.S. and European automakers.

👀 Boldface names are behind carbon removal startup Neustark's $69 million growth equity round, including the BlackRock-Temasek tie-up Decarbonization Partners.

• Why it matters: Investors are staking an array of approaches to see which removal technologies can scale and bring down costs.
• How it works: The Swiss company says it captures CO2 from biogas plants, then transports it to sites where it's injected into demolition concretes or mineral wastes. Customers include Microsoft.

🤝 Exxon has a multiyear, nonbinding agreement with SK On to supply lithium from Exxon's planned production in Arkansas.

• Why it matters: The battery heavyweight is the first customer Exxon has revealed in its recently launched Mobil Lithium unit.
• State of play: The agreement for up to 100,000 metric tons comes as SK On operates two U.S. battery plants and is building others, Exxon notes.
• The big picture: Exxon is expanding into low-carbon sectors and growing its core fossil fuel business at the same time.

🐣 The big climate tech incubator Greentown Labs is looking to VC firms to help shore up its finances, Axios Pro's Alan Neuhauser reports.

• What's next: Prithvi Ventures plans to donate a portion of its returns every quarter to Greentown, and the incubator is seeking agreements with other firms too.
• Go deeper: Unlock the whole story — and a steady diet of scoops and smart analysis — by subscribing to Axios Pro: Climate Deals.

Senior White House climate aide John Podesta is embracing record U.S. oil and gas production and LNG exports while pushing for transition from fossil fuels "over time."

Why it matters: His remarks to the Guardian capture the delicate White House posture as tomorrow's presidential debate looms.

The big picture: "The U.S. is now the number one producer of oil and gas in the world, the number one exporter of natural gas, and that's a good thing," Podesta said.

• "[That's] because following the illegal invasion of Ukraine, and the need that Europe had to rely on different sources rather than Russia fossils, it was important that the U.S. could step up and supply a good deal of that need."
• "But over time, the science is clear, we've got to transition away and begin to replace those resources with both zero carbon electricity and renewable resources."

What we're watching: TD Cowen Washington Research Group analysts said Biden's debate challenge is courting climate-focused voters and support in energy-producing swing states, notably Pennsylvania.

• "The pathway here is fraught, any details on how Biden would approach future fossil fuel production and exports (LNG 'pause') would be new and relevant," their note states.

The computer science term WYSIWYG, for "what you see is what you get," is an apt descriptor of extreme weather across the U.S. over the coming weeks.

Threat level: Areas experiencing a long-duration heat wave, like much of the South and parts of the Plains, are likely to continue to sweat under a strong, meandering heat dome.

• That heat may lap up against the Mid-Atlantic region from time to time through early July, including today, when the high temperature in Washington, D.C., is likely to top off just under 100°F.
• Climate change is making such heat waves far more likely and intense than they would have been without such high concentrations of greenhouse gases in the atmosphere.
• Weeks of extreme heat in some areas will pose human health risks, according to the National Weather Service.

Zoom in: At the same time, areas around the edges of the heat dome are forecast to receive yet more significant rainfall, including the flooded areas of the Midwest, where more severe thunderstorms are forecast into early July.

Zoom out: Globally, June is on track to set yet another record for the hottest month, making it 13 in a row.

In photos: Historic Midwest flooding

One more EV thing! A new digital mapping tool that highlights electric vehicle "charging deserts" found a surprise: Los Angeles is pocked with them.

Why it matters: If a monster EV market like L.A. can't get public charging right, the rest of America probably isn't doing much better.

Driving the news: CBRE, the giant real estate services company, created an advanced digital mapping tool to help clients assess EV charging needs in communities nationwide.

• The tool — shared first with Axios — is meant to help charging networks and property owners pick the best sites to install new chargers.
• By identifying underserved neighborhoods, CBRE essentially acts as a matchmaker.

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"In absolute terms, the growth in electricity demand from these two segments, EVs and data centers, is equivalent to the total electricity demand of a country, such as Turkey, that the U.S. has to take on. This growth is a race against time to expand power generation without overwhelming electricity systems to the point of stress."