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Good morning! Today's Smart Brevity count: 1,299 words, 5 minutes.

Situational awareness: "Two years into an ambitious growth plan to revive earnings at the largest U.S. oil company, Exxon Mobil said on [Thursday] it would stick to its spending plans even as its rivals trim costs." (Reuters)

And at this moment in 1969, Sly and the Family Stone were atop the Billboard singles charts with today's intro tune...

1 big thing: The end of the beginning on electric cars

Illustration: Sarah Grillo/Axios

General Motors dropped a ton of news about its electric vehicle plans yesterday that helps to underscore why the transition to EVs may be entering a new phase — even as sales remain tepid at best.

Driving the news: GM unveiled a broad lineup of electric vehicles powered by a new proprietary battery tech, representing a dramatic transformation of the 112-year-old automaker, Axios' Joann Muller reports from Detroit.

Why it matters: It's a $20 billion bet over the next five years that GM hopes both consumers and investors will endorse, she notes.

The company is walking a tightrope between maximizing sales of its profitable gas-powered trucks and SUVs and delivering on a long-term vision for a cleaner, less-congested world.

Quick take: There are reasons to think it's a bet GM has to make as what's now just a niche market grows in the coming decades. Here are a few things on my mind that signal why this will probably happen...

  • Tesla, by far the dominant player in the U.S. market, seems to have righted its ship after flirting with disaster at times in recent years.
  • Morgan Stanley, in a note Wednesday, forecasts that fully electric vehicles will hit 11% of global sales by 2025, 24% by 2030, 70% by 2040 and 82% by 2050.
  • Just yesterday the European Commission released its proposed law to make the EU "climate neutral" by 2050, and the Brussels-based group Transport & Environment promptly concluded it "means the transport sector finally needs to begin its journey to a zero emissions future."

The big question: That would be how GM, and any legacy automaker, can survive the slow transition as some competitors adopt a different approach.

  • "The current leaders at General Motors – and others in this business – are certainly spending money as if the future is all EV," Cox Automotive analysts said in a note.
  • "Others still are playing it safe, developing a range of powertrains, envisioning a showroom with a mix of EVs, hybrids, plug-in hybrids and super-efficient internal combustion engines."
  • They point out that in the U.S., total sales of fully electric cars were just 246,145. And Tesla accounted for 90% of them (!).

Where it stands: Via Joann, GM President Mark Reuss said the tipping point will come when carmakers solve all of the "pain points" currently keeping people from choosing an EV for their primary car — utility, driving range, charging infrastructure and value.

  • The 10 electric models it showed reporters and analysts Wednesday — mostly trucks and SUVs, including three Cadillacs, two Buicks, two Hummers and three Chevrolets — go on sale starting in 2021.
Bonus: More on GM's big EV move

Joann reports that GM announced its new Ultium battery line, jointly developed with South Korea's LG Chem.

How it works: It can be packaged in a variety of formats, enabling a modular EV platform that will underpin everything from urban taxis to luxury cars, work trucks and high-performance cars.

  • Importantly, GM says lower battery costs — below $100 per kWh — combined with lower engineering complexity means the first wave of EVs will be profitable from the start.
  • "What we have done is build a multi-brand, multi-segment EV strategy with economies of scale that rival our full-size truck business with much less complexity and even more flexibility," GM CEO Mary Barra said.

Details: The pouch-style battery cells can be stacked vertically or horizontally inside the battery pack, allowing engineers to optimize energy storage and layout for each vehicle design.

  • Battery options between 50 and 200 kWh could provide a driving range of 400 miles or more with 0 to 60 mph acceleration in as little as three seconds.
2. OPEC puts ball in Russia's court on coronavirus

OPEC ministers have agreed to push for deepening their joint production-cutting agreement with Russia and allied producers by 1.5 million barrels per day, per reports from Vienna.

Why it matters: The cartel is trying to grapple with how the novel coronavirus is sapping oil demand and depressing prices.

All eyes are now on Russia, which has yet to endorse the plan. Per Bloomberg, OPEC officials are "gambling that they can overcome Russian opposition that could block the move."

Where it stands: The latest sign of coronavirus' effect on the market came this morning.

  • The consultancy Wood Mackenzie estimated global oil demand this quarter will fall by 2.7 million barrels per day compared to a year earlier.
  • It's among several estimates that show the economic hit from the virus not only slowing oil demand but throwing it into reverse.
3. Coronavirus could dim solar projects

A pair of stories caught my eye that show how the novel coronavirus is affecting the energy supply chain.

Driving the news: "Coronavirus-induced supply-chain breakdowns in China have caused the developers of two large solar-power projects in Wisconsin to declare force majeure, threatening construction delays," the Star Tribune reports.

  • The piece adds that "some Minnesota solar companies are wary that manufacturing bottlenecks could soon hurt them, too."
  • And via the Financial Times, "India’s solar companies are banking on government support if a prolonged coronavirus shutdown of businesses in China, their top component supplier, makes it necessary to declare force majeure."

Go deeper: The coronavirus is infecting everything in the energy sector

4. Chart of the day: The changing face of offshore energy
Expand chart
Reproduced from Wood Mackenzie; Chart: Axios Visuals

A Wood Mackenzie analyst note shows that the gap in global investment between offshore wind and offshore oil-and-gas is expected to narrow as the 2020s progress.

The intrigue: The brief report explores why investors should be interested in a sector in which projects typically offer lower returns than oil-and-gas projects.

  • "[A]ny investment in the oil and gas sector is now subject to 'energy transition risk,' which encompasses falling demand for oil, the potential cost of the carbon intensity of assets, and more," the note states.
  • "There’s also a real possibility that both upstream project returns and renewables project returns will evolve, taking into account changing cost of capital, government subsidies and technology development," it adds.

The chart above shows the trends in wind compared to upstream offshore oil-and-gas, which refers to exploration and production projects.

Go deeper.

5. UBS adds new fossil lending restrictions

UBS is the latest in a string of banks to announce wider restrictions on fossil fuel finance as investor and activist pressure grows.

Driving the news: The Swiss banking giant said Thursday it will not finance new Arctic offshore oil projects; new coal mines or new oil sands projects.

  • The bank said it would apply enhanced environmental guidelines for ultra-deepwater drilling and liquefied natural gas projects.
  • For LNG, that means "considering relevant factors such as management of methane leaks, and the company's past and present environmental and social performance."

The big picture: A number of major banks have tightened finance criteria in recent months and years.

But climate activists say some of the policies, including JPMorgan Chase's new guidelines, have major gaps.

Go deeper:

6. Research corner: Wildfires and carbon sinks
Giphy

Via Axios' Rebecca Falconer...Human-caused climate change helped fuel the weather conditions of Australia's unprecedented bushfires, an international team of climate scientists at the World Weather Attribution group found in a newly published analysis.

Why it matters: The conditions increased the chances of Australia experiencing extreme fire danger by at least 30%, an estimate researchers told a news briefing was conservative.

This is the first time scientists have been able to quantify how climate change has affected the risk of fires, they said.

Driving the news: The Australian summer that ended Feb. 29 was the second-hottest on record, after the previous one, per the Australian Bureau of Meteorology. The prolonged drought continues in some parts of the country.

Go deeper in the Axios stream

* * *

Meanwhile, a new study in the journal Nature finds that trees in the Congo basin of Africa are losing their capacity to absorb CO2, the Washington Post reports.

"Increasing heat and drought is believed to be stifling the growth of the trees in the African rainforest, a phenomenon previously noted in the Amazon," it reports.

Why it matters: "The new data provides the first large-scale evidence that tropical rainforests around the world that have been untouched by logging or other human activity are losing their potency to fight climate change," the story states.