Batteries: Still boomin'

Hey folks,

We’ve got a Tuesday evening send this week because yesterday was my birthday and I didn’t feel like working too much. Has been a busy period for news and updates, though, so we’re back on the horse today. Hope your week is off to a good start.

ONE STORY IN A SENTENCE AND A CHART

• Crude oil shipments through the Straight of Hormuz remain close to zero-bound (as do LNG and fertilizer shipments) since the beginning of the month. Link.

NEWS, DATA, AND HEADLINES

• The 11-year span between 2015 and 2025 was the hottest 11 year-span on record since 1850, according to the World Meteorological Organization. The agency also warned the problem may worsen in 2026, with meteorologists predicting an El Niño event later this year that will push already-warm temperatures even higher. Link.

Energy market x Iran war updates

• U.S. President Trump announced a five-day halt to strikes on Iran following what he described as productive conversations with Iranian authorities, roughly one day after threatening to obliterate the country's power plants, including the Bushehr nuclear plant, if Iran didn't fully reopen the Strait of Hormuz. That said, after oil prices fell by ~10% yesterday, they’re back on the rise today, as much remains unclear about the near- and medium-term trajectory of conflicts in the region and the ensuing energy market disruptions. Link.

• Iranian attacks have knocked out 17% of Qatar's LNG export capacity, sidelining 12.8 million tons per year of LNG for three to five years and causing an estimated $20 billion in lost annual revenue. European gas prices are roughly double their pre-war levels. Link.

• The closure of the Strait of Hormuz has removed roughly a fifth of the global LNG supply from the market, posing perhaps the largest threat to energy networks across Asia, where countries like Japan, Singapore, Thailand, Taiwan, Pakistan, and Bangladesh generate a third or more of their electricity from natural gas. Asian utilities across the region have scrambled to buy remaining cargoes at record spot market prices, with many turning back to coal-fired power plants. South Korea, for one, is lifting its cap on coal-fired power generation to offset LNG losses. Link. Link.

• Sri Lanka declared every Wednesday a holiday for public institutions to conserve fuel, the latest in a series of belt-tightening measures by Asian countries; ~90% of all oil and gas flowing through the Hormuz last year was bound for Asia. This week, Slovenia also became the first EU country to start rationing fuel. Link. Link.

• Brazil could face fertilizer supply problems if the Middle East conflict does not ease soon, the nation's farm minister said, noting that urea prices spiked within days of the war starting, with some sellers suspending sales despite holding pre-conflict inventories. Link.

• Scandinavian airline SAS said it would cancel 1,000 flights in April because of high oil and jet fuel prices. Link.

Transportation

• Chinese EV startups Nio, Li Auto, and XPeng are all now profitable in stark contrast to many legacy automakers globally. Link.

• Rivian announced an over $1.2 billion investment from Uber through 2031, along with a deal for Uber to purchase between 10,000 and 50,000 autonomous R2 robotaxis. The fleet is slated to come online in San Francisco and Miami in 2028 and scale to 25 cities by 2031. Link.

• KKR-backed Zenobe Energy acquired San Francisco-based Revolv, which operates 13 fleet-charging facilities in California, as it looks to build a national electric-truck charging network. Link.

• Honda said it would cancel plans for three electric models it had planned to produce in the U.S. and that it would record its first annual loss, joining Stellantis, Ford, and GM in taking major hits to their profits, due in part to EV underperformance. Link.

• Global EV adoption helped avoid 2.3 million barrels of oil consumption per day last year, according to BloombergNEF. That figure is projected to more than double to 5.25 million barrels per day by 2030. EV sales as a share of total new car sales are still increasing globally, most rapidly in developing countries. Link.

Batteries and renewables

• The U.S. has achieved self-sufficiency in grid battery manufacturing for the first time, according to the US Energy Storage Coalition. By the end of this year, US factories are expected to produce 145 gigawatt-hours of finished grid storage systems annually, which is more than double the ~60 GWh of projected domestic installations. The country is also on pace to hit 96 GWh of dedicated battery cell manufacturing capacity by year-end, up from effectively zero at the close of 2024. Link.

• Tesla inked a $4.3 billion deal to buy lithium iron phosphate batteries from LG Energy Solution. The three-year agreement will see LG produce LFP prismatic cells at its Lansing, Michigan, factory starting in 2027, feeding into Tesla's next-generation Megapack 3 energy storage systems assembled at its Houston Megafactory. Link.

• Tesla is also looking to buy $2.9 billion of solar manufacturing equipment from Chinese suppliers, including Suzhou Maxwell Technologies; Musk recently promised to deploy 100 gigawatts of solar manufacturing on American soil by 2028. As of the start of this year, the U.S. had about 65.5 GW of solar manufacturing capacity. Link.

• The market capitalization of China's top battery manufacturers (BYD, CATL, and Sungrow) has soared by $70 billion since the start of the Iran war and resultant oil market instability. BYD recently upgraded its fastest chargers to provide 600 miles of range in nine minutes, four times the speed of a typical US charger, with thousands already installed in China and Europe. Link.

• China also announced that in January and February, production of wind turbines and lithium batteries for energy storage rose 28.7% and 84%, respectively. Link.

• Form Energy agreed to sell 12 gigawatt-hours of its iron-air (rust-based) long-duration batteries to data center developer Crusoe, with deliveries starting next year. Link.

• The Trump administration signed a $1 billion agreement with TotalEnergies for the French energy giant to abandon two offshore wind projects and redirect those funds toward fossil fuel infrastructure. Link.

Policy

• An alliance of 24 states and dozens of cities and counties filed a lawsuit against the EPA's repeal of the Endangerment Finding, the legal doctrine underpinning most federal limits on greenhouse gas emissions. The case may well reach the Supreme Court. Link.

• New York Governor Kathy Hochul proposed rewriting the state's climate law, requesting new emissions targets and more time to meet them. If successful, New York would be the first state to renege on its climate goals. More than half the state Senate has rebuked her plan, with 29 Democrats penning a letter saying they categorically oppose rolling back the law. Link.

• Senator Sheldon Whitehouse of Rhode Island announced an investigation into methane emissions from oil and gas facilities in the Permian Basin after satellite data revealed actual emissions were four times higher than EPA estimates. Link.

• Australia's second-biggest coal-producing state will ban new mine applications and impose rules to reduce methane emissions from existing projects. Link.

Fission

• X-Energy, a 17-year-old small modular nuclear reactor developer based out of Rockville, Maryland, filed for an IPO to capitalize on the positive tailwinds for SMRs given AI-related energy demand. The company has raised over $1.8 billion from investors, including Jane Street, Ares Management, Amazon, ARK Invest, and Emerson Collective. Link.

• The Natural Resources Defense Council came out in support of nuclear power for the first time in its history, filing comments supporting the restart of Iowa's defunct Duane Arnold nuclear plant. Link.

Other fundraising and financing activity

• Partech Impact Fund, based out of Paris, held a final close of $346 million (€300 million) for its inaugural Article 9 impact fund. It will invest in European B2B technology companies focused on decarbonization and cleaner mobility, among other objectives. Link.

• 360 Capital, based out of Paris and Milan, completed a first close of €85 million (~$99 million) out of a planned €100 million fund to invest in early-stage deeptech companies and climate tech companies. Link.

• UVC Partners, based out of Munich, held a first close of ~$89 million toward a $173 million growth extension fund to invest in European deeptech and climate tech companies. Link.

• GVC Gaesco Resilient Infratech Ventures Fund, based out of Barcelona, launched an $81 million fund targeting capital-intensive technology companies across energy storage, industrial electrification, automation, and data infrastructure in Europe. Link.

• Montis VC, based out of Warsaw, Poland, held a €50 million (~$58 million) first close for a new fund to invest in early-stage startups focused on energy and industrial systems. Link.

• Halcyon, based out of San Francisco, raised $21 million in Series A funding for its AI-powered energy information platform addressing the US electricity sector. Energize Ventures led. Link.

• Cocoon Carbon, based out of London, raised ~$15 million in Series A funding to convert steel mill byproducts into a low-carbon cement substitute. 2150 and Brick & Mortar Ventures co-led. Link.

• Ormat Technologies, based out of Nevada, raised a total of $1 billion in convertible debt to expand its geothermal business; the round was originally announced as a $750 million transaction. Link.

• Fervo Energy, based out of Houston, closed $421 million in non-recourse debt financing for the first phase of its Cape Station geothermal power plant in Utah, marking another successful step towards the company’s upcoming IPO. Link.

• Frore Systems, based out of San Jose, raised a $143 million Series D round at a $1.64 billion post-money valuation for its liquid-cooling systems for data centers. MVP Ventures led the round. Link.

• Utility Global, based out of Houston, raised $100 million in Series D funding for its industrial decarbonization platform. Ara Partners and APG Asset Management invested. Link.

• Solugen, based out of Houston, raised $50 million for its low-carbon nitrogen fertilizers derived from organic waste for agriculture. Idealist Capital and Canada Growth Fund invested. Link.

• Maersk Growth, the logistics giant's corporate venture capital arm, announced it will wind down operations and stop making new investments as Maersk refocuses on its core business. Link.

Adios,

— Nick