An employee of the Tesla Gigafactory Berlin-Brandenburg works on a production line of a Model Y electric vehicle.
Patrick Pleul | Picture Alliance | Getty Images
Shares of Tesla closed down more than 3% Friday as the stock faced pressure from supply chain delays due to a crisis in the Red Sea, and after offering more price cuts on its vehicles in China. In the U.S., rising labor costs and a decision by rental car company Hertz to sell off a large portion of its electric vehicle fleet also added to Tesla’s woes.
Reuters reported late Thursday that Tesla plans to suspend most production at its factory outside Berlin in Grunheide, Germany, from around Jan. 29 to Feb. 11 due to conflict in the Red Sea that has disrupted global trade.
The Iranian-backed Houthi militia group has been attacking cargo ships and merchant vessels in the Red Sea in response to the ongoing war in the Gaza Strip. These attacks have drawn condemnation from leaders around the globe.
“The considerably longer transportation times are creating a gap in supply chains,” Tesla told Reuters in a statement.
Analysts at Baird estimate Tesla produces between 5,000 vehicles and 7,000 vehicles per week at its German vehicle assembly plant, which would imply “a 10k-14K hit” to deliveries in its first quarter, according to a Thursday note.
The Baird analysts wrote that they are “wary” of further effects to Tesla’s supply chain, and they are “closely monitoring” any effect on the company’s shipping routes from China. “No delays have been cited, however, we speculate that disruptions in the Red Sea may lead to longer wait times as supply chains are rerouted,” they wrote.
Analysts were also focused on Tesla’s continuing price cuts including new discounts in China. Morgan Stanley analysts noted Model 3 and Model Y vehicles have been freshly discounted, though the cuts were “more moderate than the market had expected,” according to a note Friday.
Price cuts over the past year have affected Tesla’s ability to keep selling its fully electric vehicles in high volumes to rental car companies including Sixt and Hertz.
Hertz CEO Stephen Scherr said on CNBC’s “Squawk on the Street” on Thursday that his company is taking 20,000 EVs out of its fleet, which was comprised mostly of Tesla vehicles.
Hertz is trying to “bring supply in line with demand” Scherr said, and “addressing a cost issue related to the EVs in the context of damage and damage costs” as well as depreciation in the value of the EVs.
Meanwhile, Tesla’s business and reputation remains under pressure in Europe due to ongoing labor strikes in Sweden and throughout Scandinavia.
At its factories in the U.S., the EV maker is implementing pay rate increases for workers that kick in this month, a move seen as a tactic to stave off workers’ wishes to unionize. The pay bumps follow historic wins by the United Auto Workers in 2023 with Tesla competitors in Detroit, and an announcement by UAW that it would aim to organize beyond the Big Three including at Tesla, Toyota and others.
Firefighters extinguish a fire in Nanao, Ishikawa Prefecture, Japan, early on Tuesday, Jan. 2, 2024.
Soichiro Koriyama | Bloomberg | Getty Images
At least 30 people were killed after a powerful earthquake hit Japan on New Year’s Day, with rescue teams on Tuesday struggling to reach isolated areas where buildings had been toppled, roads wrecked and power cut to tens of thousands of homes.
The quake with a preliminary magnitude of 7.6 struck in the middle of the afternoon on Monday, prompting residents in some coastal areas to flee to higher ground as tsunami waves hit Japan’s west coast, sweeping some cars and houses into the sea.
Thousands of army personnel, firefighters and police officers from across the country have been dispatched to the worst-hit area in the Noto peninsula in Ishikawa prefecture.
However, rescue efforts have been hindered by badly damaged and blocked roads and authorities say they are finding it difficult to assess the full extent of the fallout.
Many rail services, ferries and flights into the area have been suspended. Noto airport has closed due to damage to its runway, terminal and access roads, with 500 people stranded inside cars in its parking lot, according to public broadcaster NHK.
“The search and rescue of those impacted by the quake is a battle against time,” Prime Minister Fumio Kishida said during an emergency disaster meeting on Tuesday.
Kishida said rescuers were finding it very difficult to reach the northern tip of the Noto peninsula due to wrecked roads, and that helicopter surveys had discovered many fires and widespread damage to buildings and infrastructure.
Authorities in Ishikawa said they had confirmed 30 deaths from the earthquake so far, with half of those fatalities in hard-hit Wajima city near the quake’s epicentre.
Firefighters have been battling blazes in several cities and trying to free more people trapped in collapsed buildings, Japan’s fire and disaster management agency said.
More than 140 tremors have been detected since the quake first hit on Monday, according to the Japan Meteorological Agency. The agency has warned more strong shocks could hit in the coming days.
Nobuko Sugimori, a 74-year-old resident of Nanao city in Ishikawa, told Reuters she had never experienced such a quake before.
“I tried to hold the TV set to keep it from toppling over, but I could not even keep myself from swaying violently from side to side,” Sugimori said from her home which had a large crack down its front wall and furniture scattered around the inside.
Across the street, a car was crushed under a collapsed building where residents had another close call.
Fujiko Ueno, 73, said nearly 20 people were in her house for a New Year celebration when the quake struck but miraculously all emerged uninjured.
“It all happened in the blink of an eye” she said, standing in the street among debris from the wreckage and mud that oozed out of the road’s cracked surface.
Several world leaders sent condolence messages with President Joe Biden saying in statement the United States was ready to provide any necessary help to Japan.
“Our thoughts are with the Japanese people during this difficult time,” he said.
The Japanese government ordered around 100,000 people to evacuate their homes on Monday night, sending them to sports halls and school gymnasiums, commonly used as evacuation centres in emergencies.
Many returned to their homes on Tuesday as authorities lifted tsunami warnings.
But around 33,000 households remained without power in Ishikawa prefecture early on Tuesday morning after a night where temperatures dropped below freezing, according to Hokuriku Electric Power’s 9505.T website. Most areas in the northern Noto peninsula also have no water supply, NHK reported.
The Imperial Household Agency said it would cancel Emperor Naruhito and Empress Masako’s slated New Year appearance on Tuesday following the disaster. Kishida postponed his New Year visit to Ise Shrine scheduled for Thursday.
Japan’s defence minister told reporters on Tuesday that 1,000 army personnel are currently involved in rescue efforts and that 10,000 could eventually be deployed.
The quake comes at a sensitive time for Japan’s nuclear industry, which has faced fierce opposition from some locals since the 2011 earthquake and tsunami that triggered nuclear meltdowns in Fukushima. Whole towns were devastated in that disaster.
Japan last week lifted an operational ban imposed on the world’s biggest nuclear plant, Kashiwazaki-Kariwa, which has been offline since the 2011 tsunami.
The Nuclear Regulation Authority said no irregularities were found at nuclear plants along the Sea of Japan, including five active reactors at Kansai Electric Power’s Ohi and Takahama plants in Fukui Prefecture.
Hokuriku Electric’s Shika plant, the closest to the epicentre, has also been idled since 2011. The company said there had been some power outages and oil leaks following Monday’s jolt but no radiation leakage.
The company had previously said it hoped to restart the reactor in 2026.
Chip equipment maker Kokusai Electric said it is investigating further after finding some damage at its factory in Toyama ahead of the planned resumption of operations on Thursday.
Companies including Sharp, Komatsu and Toshiba have been checking whether their factories in the area have been damaged. damage at its factory in Toyama ahead of the planned resumption of operations on Thursday.
One breakthrough for environmental progress was made recently by young climate activists in deep-red, rural Montana.
“OK, boomer.” That’s a snarky phrase currently some use to mock 60- and-70-year-olds they consider to be cluelessly out of touch.
Recently, however, teenagers and 20-somethings have turned that snide sentiment into a positive challenge directed at doomsayers of all ages who claim nothing can be done to stop runaway global warming: “OK, doomer,” these young climate activists respond. It’s their shorthand way of saying to do-nothing fatalists: Give up if you want, but please step aside while we organize and mobilize for climate sanity and environmental progress.
Our globe’s fast-warming, catastrophe-creating climate is more than just another issue: It has become a generational cause for young people. Indeed, 62% of young voters support totally phasing out fossil fuels, and they’re channeling their anger about official inaction toward both political parties. Such feisty grassroots groups as Gen-Z for Change, Zero Hour, Black Girl Environmentalist and Our Children’s Trust are on the front lines — in the face of power, and on the move.
As in all progressive struggles — from civil rights to labor to environmental justice — progress comes from sticking with principle, building incrementally on local victories and persevering against moneyed reactionaries.
Already, one breakthrough by these young climate activists was made this year in deep-red, rural Montana. In a case filed by Our Children’s Trust, 16 children, ages 2-18, charged that a state law took away their right to challenge energy projects that increase global warming. Noting that Montana’s constitution establishes a right to “a clean and healthful environment,” state Judge Kathy Seeley ruled for the children… and for a clean, healthy climate future.
Progress is not made by spectators and cynics, but by activists. And those who say that activism can’t produce change should not interrupt those who’re doing it.
The Rattiest Right-Wing Congress Critter
Vangunu, one of the Solomon Islands, is home to a giant species of rodent called the vika. Astonishingly, this rare and very large rat has jaws so powerful it can bite through a coconut shell!
That made me think of Rep. Jim Jordan, the GOP’s rattiest far-right-wing Congress critter. There is no documented proof that this extremist partisan was raised on Vangunu, but he sure keeps gnawing on Joe and Hunter Biden, desperately trying to crack open a scandal that simply doesn’t exit. Vikas are powerful, but they’ve not been accused of being smart.
Jordan, the former coach of a boy’s wrestling team, now has his team of House Republicans in a choke hold, draining national media attention to his goofy obsession with impeaching Joe. Impeach him for what? Well, says Jordan, we’re looking for a reason.
He has it bass-ackwards — real impeachment proceedings start with specific charges of an official’s “high crimes and misdemeanors.” But Coach Jordan is perverting that constitutional requirement by first accusing Biden of high crimes, then holding hearings in hopes of finding one. But poor Jim — it turns out to be easier for him to bite through a coconut than to fabricate a Biden crime.
But Jordan keeps gnawing, wasting Congress’ time, staff and credibility (plus millions of taxpayer dollars) scuttling down trails that go nowhere. Meanwhile, as he and the GOP House prioritize their clownish political agenda, they can’t perform the basics of government, which is simply to keep essential public services funded and functioning.
Unable to govern, Republican leaders abruptly stopped working in the House in early December, saying they’ll get serious next year. But, uh-oh, the vika congressman has just announced he’ll hold more impeachment hearings next year so he can keep gnawing at the Biden coconut.
National radio commentator, writer, public speaker, and author of the book, “Swim Against The Current: Even A Dead Fish Can Go With The Flow,” Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be – consumers, working families, environmentalists, small businesses, and just-plain-folks.
Twice elected Texas Agriculture Commissioner, Hightower is a modern-day Johnny Appleseed, spreading the message of progressive populism all across the American grassroots.
He broadcasts daily radio commentaries that are carried in more than 150 commercial and public stations and on the web.
18 housing trends that defined the year, including record mortgage rates, depleted inventory, and dwindling home sales
2023 was a difficult year for the housing market. It started with a continuation of negative trends from the end of 2022 and turned into the least affordable year for home buying on record.
The market was so difficult that more than half of recent homebuyers believed buying a home was more stressful than dating, and nearly 40% of homebuyers under 30 received money from their family to afford a down payment.
So what happened? In short: Record mortgage rates, high inflation, and persistently high housing and rental prices. But there was a lot more to it as well.
Below are trends, data points, and visuals that defined the 2023 housing market.
All data is aggregated from January through November 2023, and does not include December unless otherwise stated. December data is through the 15th of the month. All data is from Redfin, FRED, NAR, and/or public records. For questions about metrics, read our metrics definitions page.
1. Home prices rose to near-record highs
The U.S. median sale price peaked at $425,000 in June, just below last year’s record high of $433,000. However, when averaging over the entire year, 2023’s average median sale price was higher than any previous year in history, rising from $407,000 in 2022 to $409,000.
“The unusual combination of low supply and low demand caused home prices to remain elevated throughout the year, which was bad news for pretty much everyone,” laments Daryl Fairweather, Redfin Senior Chief Economist. “The market was extraordinary; it felt hot, even though very few homes changed hands.”
2. San Francisco was the most expensive metro area for homebuyers in 2023
The top six most expensive metros were all in California.
Milwaukee saw the largest year-over-year price increase in the country, rising 8.8%.
Three Florida metros were among the ten metros with the largest year-over-year increases: Miami (8.4%), West Palm Beach (7.6%), and Fort Lauderdale (7.2%).
The top ten most expensive metros to buy a home in 2023
Data includes the yearly median sale prices out of all homes sold in each of the 50 largest metropolitan areas. Data does not take into account local median incomes and home affordability.
3. Detroit was the least expensive metro area for homebuyers in 2023
The median sale price for a home in Detroit was $173,450 in 2023, down 2.7% year over year. Even though prices fell in 2023, homes in Detroit are more expensive than they were before the pandemic, as an influx of people searching for affordability have pushed up prices.
“Home prices remained fairly stable in Detroit and even rose in some areas,” says Anne Loehr, a Detroit Redfin agent. “However, across the city, recently updated homes went for the most money.”
Eight of the most affordable U.S. metros saw prices rise as homebuyers pounced on less expensive housing.
Nine of the ten least expensive metros were all located in the Rust Belt, a geographic region near the Great Lakes and Appalachians.
Three pandemic homebuying boomtowns saw the largest year-over-year price drops: Austin (-9.7%), Oakland (-4.8%), and Phoenix (-3.9%).
The top ten least expensive metros to buy a home in 2023
Data includes the yearly median sale prices out of all homes sold in each of the 50 largest metropolitan areas. Data does not take into account local median incomes and home affordability.
4. Rent prices remained historically high but stopped short of new record
The median U.S. rent price hit $2,050 in August 2023, matching the record price of $2,050 set in August 2022. Year-over-year price changes were flat until November when they dropped significantly, as an increase in inventory and vacancies forced landlords to hold rents steady or drop them. Other contributors to the quieter rental market: Strong new construction in the apartment industry, and fewer new households forming (two or more people living together).
“November provided the most relief for renters,” says Maggie McCombs, managing editor of Rent., a Redfin company. “Prices dropped by 2.1%, marking the first time in more than three and half years that prices fell by more than a single percent. We expect decreases to continue into 2024.”
This was in stark contrast to the past two years, which went from sudden growth during the pandemic to a free-fall in the second half of 2022.
“One of the biggest changes compared to 2022 was the slowdown in the rental market,” adds Fairweather. “Last year, rent prices skyrocketed in the first half of the year due to low supply and high demand. However, in 2023, supply began to catch up, causing many landlords to keep prices flat amid higher vacancy rates.”
Even though growth slowed, the average rent price for all months through November in 2023 rose $10 to $1,992, the highest in history. This only worsened the affordability crisis across the country, especially for lower income families. Rent growth has outpaced wages for decades, but the most recent data states that the average renter now spends 30% of their income or more on rent.
The U.S. currently has a shortage of 7.3 million affordable housing units for those who need them, and no state has an adequate supply.
Data includes the 2023 average aggregated median rent prices for each of the 50 largest core-based statistical areas (CBSAs) compared to 2022 data from the same period.
5. Inflation remained stubbornly high before finally falling
The prices of goods and services rose 6.6% year over year in February, just below 2022’s high and the second-highest inflation level since August 1982. Inflation then fell steadily throughout the year, albeit still above healthy levels.
As interest rates hovered around 0.5% for the entirety of the pandemic, inflation took off due to supply crunches and increased consumer demand. The Fed raised its benchmark rate in 2022 to combat inflation and cool the economy – that began working this year, but higher interest rates led to higher mortgage rates, which slowed the housing market. Interest remains high as we end 2023, but economists expect them to start coming down next year.
Since the Fed began raising the target rates in March 2022, they have increased it 11 times to the current range of 5.25-5.5%.
Inflation remained highest in pandemic boomtowns due partly to the sudden jump in house prices, which is a key contributor to inflation.
Data courtesy of FRED. Data measures CPI (less food and energy) through November 2023.
6. Mortgage rates ballooned beyond 8% for the first time in over 20 years
“Mortgage rates were the name of the game this year as record inflation helped push daily average 30-year fixed rates past 8% for the first time since 2000, pricing many buyers and sellers out of the market,” says Fairweather. “Home buyers didn’t want to pay twice as much for a home than they would have three to four years ago, and home sellers didn’t want to give up their pre-pandemic rates.”
Higher mortgage rates impacted affordability across the market, straining already sapped budgets. In July, the average monthly mortgage payment reached $2,637 and grew more than twice as fast as wages (12.6% compared to 5.2%). Both were record highs. Affordability (or lack thereof) also directly affects housing inequality, which is wider now than it was in the 1960s.
Importantly, mortgage rates fell noticeably before the end of the year due to inflation easing up, the Fed holding rates steady, and the labor market growing slower than expected. While interest rates aren’t predicted to fall until midway through next year (three rate drops are predicted in 2024), mortgage rates could continue to fall sooner.
“Looking ahead, whether interest rates will fall depends on two things: the strength and resiliency of the economy, and consumer behavior,” notes Matt Birdseye, Executive Vice President at Bay Equity, a Redfin company. “Until unemployment rises and the economy slows, rates are unlikely to fall.”
Just 16% of homes were affordable for the typical household in 2023, likely the lowest for the foreseeable future.
Graph shows aggregated average mortgage rates, not daily rates, which is why the graph does not depict the 8% high. Daily rates are more variable.
7. Homebuyers looking to relocate favored sun and affordability
“Generally speaking, the proportion of buyers looking to relocate was higher in 2023 than in 2022,” notes Chen Zhao, Redfin Senior Economist. “Despite buyer demand falling overall, those who looked to buy sought more affordable locations to get more for their money.”
Surprisingly, the risk of natural disasters didn’t push home prices down in many at-risk metros. “We expect this to change in the near future, though,” continues Zhao.
Many of the top migration hotspots were sunny, more affordable metros which grapple with severe climate risks such as heat, drought, and flooding. This is not new; in fact, from 2021-2022, migration into the most flood-prone areas doubled compared to the prior two years. This comes as 2023 set a new record for billion-dollar weather disasters.
“It’s human nature to focus on current benefits over costs that could rack up in the long run,” admits Daryl Fairweather. “In short, the consequences of climate change haven’t fully sunk in. This is partly because most homeowners don’t foot the bill when disaster strikes. But as insurers continue to pull out of disaster-prone areas, people may feel a greater sense of urgency to mitigate climate dangers – especially if their home’s value is at risk of falling.”
The top five most popular metros people looked to move to in 2023
Data is the percent of Redfin.com users searching for homes outside their metro. Data is the annual median aggregate of multiple three-month rolling aggregates. Keep up with the latest migration news here.
8. Housing inventory remained well below average
There was an average of 1.015 million homes listed for sale every month in 2023, down 0.1% from last year. Monthly inventory peaked at 1.1 million homes, below 2022’s 1.26 million and far below historical normals.
Cincinnati (-41.9%), Newark (-24.3%), and New Brunswick (-21.9%) saw the biggest inventory declines, with Chicago coming in fourth.
Mortgage rates were the primary reason why inventory was so sluggish. Nearly a quarter of all homeowners had an interest rate below 3%, and around 90% of homeowners had rates below 6%, leading many would-be sellers to stay put to avoid taking on a higher rate.
Inventory is calculated in rolling 90-day periods, e.g., January 2023 data is the three-month period from November 1, 2022, through January 31, 2023. Redfin inventory records date back to 2012.
9. New listings dropped to their lowest level on record
There were just 5.4 million new listings in 2023, the lowest level on record and a massive 16.4% drop from 2022. Average monthly new listings also posted sharp declines, falling from 585,000 in 2022 to 520,000 this year.
New listings are one factor that make up total housing inventory. The dramatic drop in new listings was primarily due to skyrocketing mortgage rates, keeping buyers and sellers on the sidelines.
Year over year, new listings fell every month in 2023 until November, when they began to rise for just the second time since July 2022. That same month, they also posted their biggest increase since 2021 as mortgage rates fell to under 7.4%, well below the high of 8%. Listings continued to rise into December.
This year, new listings were also a major factor in determining local market trends. For example, new listings dropped a massive 24% across New York State in 2023, causing a ripple effect. “The drop in new listings created a surge in competition among buyers looking for affordable homes,” says Kimberly Hogue, a Rochester Redfin agent. “Sellers were able to benefit massively in many Upstate markets as buyers competed over the few homes left, leading to a spike in prices.”
Joey Keeler, a Redfin Premier agent in Seattle, agrees, but says that favorability depends on the property. “Generally, our market favors sellers, but it depends on the listing,” he says. “Some well-priced homes can see multiple bidding wars, while others may sit on the market for weeks.”
New listings posted year-over-year gains to close out the year, providing hope for 2024.
New listings are calculated in rolling 90-day periods, e.g., January 2023 data is the three-month period from November 1, 2022, through January 31, 2023. Redfin listings records date back to 2012.
10. Months of supply reached 3.4 months, its highest level since 2019
While inventory measures the number of homes currently available for sale, months of supply measures the amount of time it would take those homes to sell. Six months of housing supply is considered a healthy benchmark, with fewer than six indicating a seller’s market and more than six indicating a buyer’s market.
The average stock of housing supply across every month in 2023 was 2.4 months, up from 2.1 months in 2022.
Even though months of supply rose in 2023, it was still a very tight market; through the first six months of the year, just 1.4% (14 out of 1000) of the nation’s homes changed hands, the lowest share in at least a decade. The pandemic homebuying boom depleted supply, which has only barely started to recover.
“Months of supply gained some ground this year compared to last, reaching above 3 months in January, but still remained far below a balanced market,” adds Fairweather. “However, local market trends determined whether or not buyers or sellers had an advantage.”
Months of supply grew at its fastest rate year over year in history in January before falling until April.
Even though months of supply began increasing to close out the year, it still remained below a balanced market.
Supply is calculated in rolling 90-day periods, e.g., January 2023 data is the three-month period from November 1, 2022, through January 31, 2023. Redfin supply records date back to 2012.
11. New construction fell as builders were left stuck with inflated inventory
There were 1.41 million privately-owned new homes built in the U.S. through November 2023, down from 1.55 million in 2022.
Many home builders who snatched up land during the pandemic to capitalize on the supply crunch were left stuck with homes they couldn’t sell this year. This is a stark difference from 2022, when new construction blossomed following the pandemic supply crunch.
“If you’re a buyer, consider new construction homes,” advises Kim Stearns, a Northern Idaho Redfin agent. “Because of an inventory buildup, many builders have one to four homes they would love to close on and will often offer incentives.”
New construction slowed before rising later in the year, as inflation cooled and more homebuyers entered the market. Experts predict new construction will continue rising into next year.
Over 73% of new builds were single-family homes, up 8% year over year.
12. Home sales fell more than 18%, hitting record lows
Just 4.59 million U.S. homes sold through November, an incredible 18.3% drop from the 5.62 million sold in 2022 during the same period.
Year-over-year home sales were negative every month in 2023. However, the declines shrunk from a low of -37.5% in January to just -4.8% in November, showing a promising upward trend leading into 2024.
Unfortunately, existing home sales, a measure of how many homes that have sold at least once are expected to sell in a year, have fared much worse. In general, between four and seven million existing homes sell per year, with the historical average sitting at just over 5 million. In 2023, experts predict just 3.82 million existing home sales, a 7.3% drop from 2022 and the lowest annualized amount since August 2010.
Just 278,000 homes sold in January, the lowest amount since 2012.
In May, the number of active listings dropped to 1.4 million, its lowest level on record. Fewer listings helps boost bidding wars and further deter buyers, impacting sales.
While pending sales rose in November, closed sales fell through at a record rate to close out the year.
13. Median days on market soared beyond one month as the market cooled
In 2023, homes spent an average of 37 days on the market,a full ten days more than 2022.
Supply started dropping dramatically during the pandemic due to supply chain issues, rising demand, and a chronic lack of homebuilding. However, supply began inching upwards part way through 2022, as mortgage rates rose and fewer people entered the market.
In 2023, slowly rising supply paired with high home prices and mortgage rates led to an increase in time on market in most metros. However, more affordable areas saw the opposite effect; midway through 2023, houses in Buffalo and Rochester sold over six times faster than homes in Austin.
“Inventory for Austin is currently sitting at an 8-year high, which corresponds with an increase in time on market,” observes Chris Daniels, a Redfin Sales Manager in Austin. “Inventory has climbed gradually throughout 2023, but many indicators are pointing towards this being the peak due to lower mortgage rates luring people back to the market.”
June and July were the busiest months of the year, with homes spending 29 days on the market.
By far, the slowest month was January, with homes spending an average of 52 days on the market.
14. 15% of active listings experienced price drops
15.3% of listings experienced price drops in 2023, up from 13.9% in 2022.
As affordability worsened and fewer buyers entered the market, more sellers were forced to lower prices. In some markets, sellers also had to offer additional concessions due to very limited demand. In fact, by November, more than one-third of all home sellers gave concessions – down from the record 45.6% in February but up from 27.6% two years prior.
“A great way buyers can lower the cost of a home is through seller concessions and buydowns,” advises Mike S. Rafii, a Regional Sales Manager at Bay Equity. “A common way to do this is by negotiating seller concessions to include money toward the buyer’s closing costs. The buyer can then use this money to buy down their interest rate – either permanently (for the entire mortgage term), or temporarily (for up to 3 years).”
In many markets, sellers need to do everything they can to secure a buyer. “To make a property more appealing, sellers need to have their homes in pristine condition to attract buyers,” suggests the Redfin Premier agents in Las Vegas. “In Las Vegas, sellers had to do everything under the sun, from paying closing costs to offering repairs, to get a luxury buyer this year.”
On average, price drops remained more common than any year on record, as limited affordability hampered buyers’ budgets.
Of all sellers who dropped their original listing prices in 2023, the average seller dropped prices by 4.5%.
The top five metros with the highest share of price drops in 2023
Data includes the aggregated average percentage of price drops out of all active listings in each of the 50 largest metropolitan areas.
15. Nearly 33% of homes were purchased with cash in 2023
32.7% of homes were purchased with all cash in 2023, up from 30.7% last year and the highest share in a decade. However, while the share of all-cash purchases continued rising, the number of cash sales fell year over year alongside all other sales metrics.
Affluent home buyers who can afford to pay cash are more apt to buy when mortgage rates are high. By paying all cash, they avoid interest rates altogether and secure a better deal. While these are helpful benefits, they also exacerbate inequality between people who own homes and people who don’t.
Cash purchases were especially common at higher price points. “The luxury market experienced a large influx of cash buyers this year, due to higher mortgage rates,” notes Jonathan Huffer, a Redfin Premier agent in Palm Beach.
In September, 1 in 3 homebuyers were paying all-cash, the highest share since 2014.
Inexpensive metros and top migration destinations saw the highest share of cash purchases.
Many of the most expensive metros saw the fewest all-cash purchases, including Oakland (17.3%), San Jose (19.1%), and Seattle (20.4%).
The top five metros with the highest share of all-cash purchases in 2023
Data is from a Redfin analysis of county records across 39 of the most populous U.S. metropolitan areas, dating back through 2011.
16. Luxury home sales experienced their largest year-over-year decline on record
In 2023, there were 549,750 luxury homes sold, down 23.8% year over year.
In January, luxury home sales fell a record 45% to their second-lowest level ever, continuing a rapid decline from 2022. Year-over-year sales remained negative every month, but slowly rose as the year went on. An average of 53,200 luxury homes sold per month in 2023, down 10.5% year over year.
Even as sales fell, luxury house prices continued to grow this year, topping $1.15 million in September, a new record and higher than any point in 2022. Nationwide, luxury home prices grew nearly three times faster than non-luxury prices but dropped in expensive metros as people migrated to more affordable areas.
Higher prices also meant less competition. “Higher prices weeded out many buyers in the luxury market and dropped competition nationwide,” notes Sam Chute, a Redfin Premier agent in Miami. “However, homes that did sell often sold quickly.”
Luxury homes are defined as the top 5% of listings by price in a given market. Values are three-month rolling aggregates ending on the date shown, e.g. November 2023 spans September, October, and November 2023. Data does not include the three months ending December 31.
17. Bidding wars fell in 2023
51.6% of homes had a bidding war in 2023, down from 54% in 2022. In general, bidding wars have been dropping as mortgage rates have increased. This has been especially pronounced in pandemic boomtowns.
In many markets, bidding wars were virtually nonexistent. “Due to high mortgage rates and low competition, buyers didn’t feel as much pressure to compete,” notes Desiree Bourgeois, a Detroit Redfin agent. “Sellers need to know that buyers are less tolerant of an overpriced home.”
Fort Worth (-23%), Austin (-17%), and San Antonio (-15.6%) saw the largest decreases in bidding wars year over year.
The top five metros with the highest percentage of bidding wars in 2023
Redfin defines a bidding war as when a home faces at least one competing bid.
18. Investors purchases dropped at a record rate
Investor purchases plummeted by a record 48.6% year over year in the first three months of 2023, which followed a 46.2% fall at the end of 2022. Both drops exceeded the previous 45.1% record fall during the 2008 subprime mortgage crisis. (Investor purchase records date back to 2000.) However, investor market share remained relatively stable throughout the year, hovering around 17%, below last year’s 19%.
The drop in purchases continued until the last quarter of 2023 but eased slightly as mortgage rates began to stabilize. Investor activity isn’t expected to rebound in the near future.
These sharp drops came just months after the record surge in investor activity that happened in the aftermath of the pandemic. In fact, all of the most dramatic falls occurred in the Sun Belt, where investor activity jumped the most post-pandemic.
Atlanta, one of the top metros for investors last year, saw a 60% decrease in investor purchases, the largest fall in the country – but things are starting to look up. “Following a decline for most of these past two years, investor activity has ticked up in Atlanta,” says Angie Lawson, a Redfin agent in Atlanta. “They’re now focusing more on buying land, flipping homes, and acquiring properties for rental income.”
Investors generally buy homes either to sell or lease and capitalize on low construction costs and high demand. However, when costs are high and demand is low, investors usually slow down purchases. That’s what happened this year; high mortgage rates, a lackluster rental market, and rising home prices left many investors with homes they couldn’t sell or rent.
Multi-family homes continued to be the most popular among investors, with single-family homes coming in second.
A record 40.5% of all investor purchases were starter homes (less than 1,400 square feet).
The top five metros with the largest investor market shares in 2023
Data is analyzed on a quarterly basis and includes all property types unless otherwise stated. Data is through September (Q3).
Looking forward
The 2023 housing market was hard for many homeowners and renters, but what does Redfin predict for 2024? Read our 2024 Housing Market Predictions to learn more.
A mammoth rally in 2023 for El Niño-exposed raw materials will likely hit consumers’ pockets over the coming months, according to one specialist food and agribusiness bank.
Soft commodities have posted huge gains year-to-date.
Futures contracts on orange juice, cocoa, coffee and sugar have soared in part because of extreme weather and supply concerns related to El Niño.
“You can say El Niño has a sweet tooth because it sort of eats or takes away much of the sugar in the world,” Carlos Mera, head of agri commodities market research at Netherlands-based Rabobank, told CNBC.
“Sugar prices have probably already been passed on [to consumers] but certainly for chocolate we should expect a big increase at retail level — and El Niño is certainly something to watch.”
The El Niño phenomenon, which returned earlier this year, is a naturally occurring climate pattern that takes place when sea temperatures in the eastern Pacific rise 0.5 degrees Celsius above the long-term average. It can pave the way to more storms and droughts.
Orange juice on display in a grocery store on Jan. 19, 2023, in Miami, Florida.
Joe Raedle | Getty Images News | Getty Images
The effects of El Niño tend to peak during December, but the impact typically takes time to spread across the globe. This lagged effect is why forecasters believe 2024 could be the first year that humanity surpasses a critical warming threshold.
El Niño-related dryness in much of Southeast Asia, India, Australia and parts of Africa has supported a price rally for soft commodities such as sugar, coffee and cocoa this year, Rabobank said in its annual outlook for 2024.
The Dutch bank broadly expects global food price inflation to fall sharply after years of soaring prices.
It also warned that several crops could be adversely affected by El Niño early next year, while acknowledging there is the potential for some crops to benefit, citing those in the United States, southern Brazil and Argentina.
Orange juice futures climbed a whopping 80% in 2023, hitting an all-time high in late November after hurricanes and disease devastated citrus crops in Florida.
“Occasionally, these markets exceed our wildest expectations. Did anyone predict $4.00 orange juice? The profit potential from this trade is staggering,” trader Dave Reiter of Reiter Capital Investments LLC said on Oct. 30 via X, formerly known as Twitter.
Reiter has since warned that the eventual crash in the price of orange juice “will be one for the record books.”
The price of cocoa, a vital ingredient for chocolate, jumped 64% this year to notch 46-year highs as West African supplies were hit hard by heavy rains and amid issues such as fungal disease.
The robusta coffee variety on Dec. 15 hit its highest level in 15 years, while sugar prices have risen 13% in 2023 even after paring gains since registering a 12-year peak in September.
Workers collect dry cocoa beans in front of the store of a cocoa cooperative in the village of Hermankono on Nov. 14, 2023.
Sia Kambou | Afp | Getty Images
Rabobank’s Mera said there is a “very clear” relationship between El Niño and higher sugar prices because the weather pattern tends to make conditions in major sugar exporting countries such as Thailand, India and Australia drier than normal.
For cocoa, Mera said the impact of El Niño is likely to be “much weaker.” He added that the mechanics of the cocoa market means higher chocolate prices are not likely to immediately weaken demand or even incentivize production.
“The cocoa industry is characterized by a lot of forward selling in part because of how cocoa is traded [in the Ivory Coast and Ghana],” Mera said, referring to the world’s two largest cocoa producers.
“For example, they tend to sell the crop a year in advance. That means that the chocolate that you buy in the supermarket has probably been bought at a much lower price a year ago,” he added.
“I’m surprised that cocoa is so much higher and that is not felt by the consumers just yet,” Mera said. “It will be — that cost will be passed to consumers at some point in 2024.”
Cities across the eastern U.S. are preparing for a major storm system that will damper weekend plans when it brings torrential rain, high winds and severe thunderstorms to the East Coast.
The system will develop in the Gulf of Mexico Saturday and become a prolific rain and wind maker as it travels toward the eastern seaboard, with impacts expected to last through Monday.
There are already flood and wind alerts for portions of Florida. The severe weather could bring a few possible tornadoes, The Weather Channel said Saturday morning in a post on X.
Florida Power & Light Company, the largest power utility in the state, said it was responding to outages caused by the storm.
“We are safely and quickly responding to outages caused by severe weather impacting parts of Florida, including heavy rain and wind gusts near tropical-storm-force strength,” the company said in a post on X, telling people to stay away from downed power lines and damaged electrical equipment.
Just over 7,000 customers were without electricity as of late Saturday morning, according to PowerOutage.us.
On Sunday, torrential rain is expected for nearly the entire state of Florida. Severe thunderstorms that could bring isolated nocturnal tornadoes in parts of the state, including Tampa and Orlando, are also possible.
Throughout Sunday, the storm will move up the East Coast as it intensifies. Heavy rain and strong winds are expected on the Mid-Atlanta coast.
In New York, rain will begin late Sunday morning and last through Monday night. The National Weather Service issued a high wind watch Saturday for Brooklyn, Queens, Long Island, coastal Connecticut and New London County, the NWS said in a post on X.
Wind advisories were issued for Manhattan, the Bronx, Staten Island, southern Westchester and most of interior southern Connecticut, the NWS said.
The New York State Division of Homeland Security & Emergency Services urged everyone to be prepared “for a weather system this weekend that could produce up to three inches of rain & cause flooding in parts of the Mid-Hudson Valley, including the eastern Catskills, southern Capital Region & potentially parts of Long Island.”
Gov. Kathy Hochul said her office will be “closely monitoring conditions” and will be ready to assist local governments should flooding occur.
Over in Boston, it was a sunny but cloudy day on Saturday, the National Weather Service for Boston said in a post on X. The NWS warned, however, that conditions will begin to deteriorate late Sunday into Monday when the storm “brings drenching precipitation and gusty winds to southern New England.”
U.S. President Joe Biden meets with Cyril Ramaphosa, South Africa’s president, not pictured, in the Oval Office of the White House in Washington, D.C., US, on Friday, Sept. 16, 2022.
Bloomberg | Bloomberg | Getty Images
A landmark agreement to shift away from fossil fuels thrusts U.S. policy into the global spotlight, with campaigners demanding that President Joe Biden’s administration should lead the charge toward cleaner energy technologies.
For the first time in nearly three decades, government ministers from nearly 200 countries on Wednesday approved a deal that calls on countries to move away from using fossil fuels — the chief driver of the climate crisis.
The agreement, known as the global stock take, was hailed as “historic” by COP28 President Sultan al-Jaber during his closing speech. The European Union welcomed what it described as “the beginning of the end” of the fossil fuel era.
But civil society groups and scientists were left disappointed by the absence of an explicit call to phase out or phase down fossil fuels, while a bloc of small island nations criticized what they characterized as a “litany of loopholes.”
A “phase-out” commitment would likely have required a shift away from fossil fuels until their use is eliminated, while a “phase down” agreement would have indicated a reduction in their use — but not an absolute end.
U.S. climate envoy John Kerry said Wednesday that the COP28 agreement “sends very strong messages to the world.”
“Today, I would join with … the Chinese delegation in announcing that the United States and China … based on the many initiatives set out in the global stocktake decisions, we will again update our long term strategies, and we invite other parties to join us in doing so,” Kerry added, without disclosing the details of these strategy adjustments.
His comments come at a time when the U.S. position as the world’s leading oil and gas juggernaut has strengthened in recent months, and the nation is track to extract more oil and gas than ever before in 2023.
The fight to end oil, gas and coal must now be taken up at the country level with the United States leading the way.
Jean Su
Acting co-executive director at the Center for Biological Diversity
The U.S. Energy Information Administration said recently that American oil output hit a fresh all-time high of 13.2 million barrels per day in September, more than heavyweight producers such as OPEC kingpin Saudi Arabia and non-OPEC leader Russia.
Jean Su, acting co-executive director at the Center for Biological Diversity, a non-profit, said Wednesday that the COP28 deal must now be taken up at the national level — and singled out the need for the U.S. to lead the charge.
“The fight to end oil, gas and coal must now be taken up at the country level with the United States leading the way by halting new fossil fuel project approvals and setting a strong nationally determined contribution for next year’s COP29,” Su said.
Nikki Reisch, director of the Climate & Energy Program at the Center for International Environmental Law, echoed this view.
“So long as the biggest polluters, the United States chief among them, continue recklessly expanding oil and gas and staunchly refusing to provide climate finance on anything approaching the scale needed, the world will remain on a death course,” Reisch said.
“Ultimately, lives depend not on what countries profess in these halls, but what they do outside of them,” she added.
A White House spokesperson was not immediately available to comment.
The Biden administration has sought to ramp up oil production even as the country seeks to accelerate its transition toward renewable energy sources, in an attempt to keep a lid on prices at the pump — historically, a hot-button issue for U.S. voters.
Shortly after Russia launched its full-scale invasion of Ukraine in Feb. 2022, for instance, U.S. Energy Secretary Jennifer Granholm called on energy executives to raise output to help stabilize the market and “minimize harm” to American families.
Under Biden, the U.S. passed the most aggressive climate investment ever taken by Congress, a bill known as the Inflation Reduction Act. The deal is expected to funnel billions of dollars into programs designed to accelerate the country’s energy transition and slash the country’s planet-warming emissions by about 40% this decade.
Biden has previously warned that anyone willing to deny the impact of climate change “is condemning the American people to a very dangerous future,” adding that natural disasters in America caused $178 billion in damages last year alone.
“The impacts we’re seeing are only going to get worse, more frequent, more ferocious, and more costly,” Biden said on Nov. 14.
Nonetheless, the White House has frequently received sharp criticism over its plans to expand oil and gas production.
An oil pump jack in Midland, Texas, US, on Thursday, March 2, 2023. Thousands of miles away from the turmoil on Wall Street, Midland, Texas that ranked No.1 in the US for inflation just over a year ago has since ceded that title only to lay claim to a different one: the countrys pay-raise capital. Photographer: Sergio Flores/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images
Speaking to The Financial Times at the COP28 summit earlier this month, Kerry defended the country’s surge in its production and maintained the U.S. was a global climate leader.
“As the world puts these collective goals into action, richer nations like the United States have a responsibility to take the lead in quickly moving away from fossil fuels and providing scaled-up climate finance for developing countries,” said Rachel Cleetus, policy director and a lead economist at the climate and energy program at Union for Concerned Scientists, a non-profit group.
“Without that, we will not be able to succeed in phasing out fossil fuels — which remains essential — nor will we deliver justice for people on the frontlines of the climate crisis,” Cleetus said Wednesday.
— CNBC’s Ruxandra Iordache contributed to this report.
Australians are used to seeing messages with advice on preparing for bushfires and other extreme weather at this time of year.
“Amid the Christmas promotions, [we’re] seeing increased warnings about extreme heat and fires and how to cope and stay safe,” Belinda Noble, the founder of climate advocacy organisation Comms Declare, told Al Jazeera.
While there is nothing new about these kinds of public service announcements, the messages have taken on added meaning as the weather becomes more unpredictable and memories of severe bushfires three years ago linger.
“Australia desperately needs national public information campaigns to keep people safe,” Noble told Al Jazeera, stressing that similar campaigns were also needed on how to “reduce emissions and to combat lies about fossil fuels, renewables and climate science”.
Australia passed breakthrough climate laws in March this year, 10 months after a new centre-left Labor government under Prime Minister Anthony Albanese took office.
“In contrast to our last government,” the new government now “acknowledges that climate change is very real, is with us now and is worsening extreme weather and disasters,” Greg Mullins, the former commissioner of fire and rescue for the state of New South Wales told Al Jazeera.
But, Mullins added, it is “inexplicable that as they strive to reduce emissions, they undo all of their good work by continuing to approve new fossil fuel projects.”
Even as the Albanese government passed its new legislation in March, its annual Resource & Energy Major Project list included 116 new fossil fuel projects, “two more than at the end of 2021”, according to Canberra-based think tank the Australia Institute.
Combined, Australia’s oil and gas expansion plans are the eighth largest of any country, the advocacy organisation Oil Change International said recently.
Many of the planned fuel projects – on land and sea – are facing opposition from Indigenous people, who are seeing the effects of fossil fuel extraction and climate change first-hand.
“My community is facing not just fracking, but mining [and] overgrazing” said Rikki Dank, the director of Gudanji For Country, an Indigenous charity. “On top of that, we are feeling the effects of climate change. The weather patterns are all over the place,” she said.
“There’s not as much rain as there used to be and the heat is becoming almost unbearable,” said Dank, who spoke to Al Jazeera from COP28 in Dubai where she was bringing attention to Australia’s plans to frack her traditional lands.
Fracking or hydraulic fracturing involves the high-pressure injection of liquid into shale rock to release gas.
“We’re seeing a lot of people in Australia lose their homes because it’s becoming too hot or because we can’t live there any more because of the mining or fracking,” she added.
But at a special COP28 meeting where leaders were encouraged to speak off-script on Sunday, Australia’s Climate Minister Chris Bowen backed calls for the global phasing out of fossil fuels.
The comments sparked confusion given Australia’s fossil fuel expansion at home.
“We don’t think of ourselves as a petrostate, but Australia is a bigger fossil fuel exporter than the United Arab Emirates, by far,” Ebony Bennett, the deputy director of the Australia Institute wrote last week, comparing Australia with the host of COP28.
Australia is “the third-largest exporter of fossil fuels in the world,” Bennett added. The country is one of the world’s top exporters of coal with Russia and Indonesia.
‘Your whole world’
While Australia’s messages on the world stage may seem mixed, at home, the messages, at least on the dangers of fire, are much clearer.
A Queensland Fire and Emergency Services advertisement shows images like a warped dog’s bowl and a children’s bike in a burned landscape while a narrator says “your best friend” and “your whole world”.
A fire preparation sign at the Rural Fire Service (RFS) station in Shannons Flat, Australia says, ‘Sorry guys, you are all too late now!’ in January 2020 [Tracey Nearmy/Reuters]
While more disaster preparedness is welcome, Mullins says recently-announced funding is “still just a drop in the bucket and climate change is causing that bucket to leak.”
The former fire chief who is also the founder of Emergency Leaders for Climate Action says greater efforts are needed to address the growing climate crisis.
“It doesn’t matter how many helicopters, how many planes, or many trucks you have,” Mullins told Al Jazeera. “We cannot just deal with the damage once it has been done, we need to tackle it at its root cause – which is the continued extraction and burning of coal, oil and gas.
“We must take urgent action now to get emissions plummeting during this crucial decade”, he added, “to give some hope to future generations”.
For Dank, the solutions include drawing on the experience of Indigenous people in caring for their land as a nature-based solution.
“Unfortunately”, there is a “current culture” of “band-aid solutions for how we can fix something that’s making us uncomfortable now as opposed to actually looking at and addressing the problem,” she said.
Meanwhile, Noble says public awareness campaigns are also needed to dispel the fossil fuel industry’s influence.
“Communities need more consistent, accurate and reliable climate information to manage the massive challenges ahead,” said Noble, whose organisation is also campaigning to see misleading fossil fuel advertising banned in Australia.
“There’s no doubt people are anxious,” she added, but it is possible to turn “anxiety into action against the fossil fuel companies causing the extreme heat, fires and storms”.
C.E.O. of Tesla, Chief Engineer of SpaceX and C.T.O. of X Elon Musk takes the stage during the New York Times annual DealBook summit on November 29, 2023 in New York City.
The postal service’s workers blocked Tesla license plate deliveries late last month in a show of solidarity with mechanics striking over the company’s refusal to sign a collective bargaining agreement with employees, which is customary in Sweden.
Tesla took legal action while CEO Elon Musk branded the move “insane,” but a Swedish court ruled Thursday that PostNord will not be forced to deliver license plates for now.
Possibly more concerning for Musk, however, will be the sympathy strikes spreading throughout Scandinavia as fellow unions coalesce their support behind the region’s deeply entrenched principle of collective bargaining as a lynchpin of labor relations.
Union members across a host of Swedish industries have joined the secondary strike action with members of trade union IF Metall, who have been embroiled in an ongoing battle with Tesla for around six weeks.
Norway’s largest private sector union then on Wednesday announced its intention to begin blocking vehicle shipments destined for Sweden from Dec. 20.
The strikes then spread further across the Nordic region, as Finnish transport workers’ union AKT on Thursday confirmed that a blockade on Tesla vehicles earmarked for Sweden would also come into force across all Finnish ports from Dec. 20.
AKT Chairman Ismo Kokko said collective agreements for workers were “an essential part of the Nordic labor market system,” according to Finnish newspaper Helsingin Sanomat.
Meanwhile, one of Denmark’s largest pension funds on Wednesday announced it would sell its holdings of Tesla stock over the U.S. company’s refusal to enter into agreements with labor unions. PensionDanmark sold the shares at a market value of 476 million Danish kroner ($68.8 million), according to Reuters.
PensionDanmark told CNBC on Friday that its approach to responsible investments is “based on international conventions and agreements, including the ILO conventions regarding labor rights.”
“If a company does not live up to our policies, we initially try to influence the company through active ownership – both directly and in coordination with other shareholders. This has also been the case in relation to Tesla,” the pension fund said in an emailed statement.
Should the fund assess that it is not able to exert sufficient influence on a company, as has transpired with Tesla, it may decide to exclude that business’ shares from its holdings.
“Seen in the light of the fact that the conflict is now spreading to Denmark as well as Tesla’s recent very categorical refusal to sign an agreement in any country, we have come to the conclusion that we as investors currently hardly have the opportunity to influence the company. And that is why we are now putting Tesla on our exclusion list,” PensionDanmark added.
Tesla’s policy of not pursuing collective bargaining is meeting a broad ideological stalemate — such agreements between employers and workers serve as a lynchpin for Scandinavian economic models, which guarantee workers the right to negotiate wages, vacation, overtime pay and other conditions.
Tesla did not immediately respond to a CNBC request for comment.
DETROIT — As sales of all-electric vehicles grow more slowly than expected, major automakers are increasingly meeting their customers in the middle.
More and more companies are reconsidering the viability of hybrid cars and trucks to appease consumer demand and avoid costly penalties related to federal fuel economy and emissions standards.
The shifting strategies run counterintuitively to industrywide EV messaging of recent years. Many auto companies have begun to invest billions of dollars in all-electric vehicles, and the Biden administration has made a push to get more EVs on U.S. roadways as quickly as possible.
But hybrid vehicles — those with traditional internal combustion engines combined with EV battery technologies — could help the automotive industry lower fuel consumption and emissions in the short-term, while easing consumers into vehicle electrification.
Sales of traditional hybrid electric vehicles, or HEVs, such as the Toyota Prius, are outpacing those of all-electric vehicles in 2023, according to Edmunds. HEVs accounted for 8.3% of U.S. car sales, about 1.2 million vehicles sold, through November of this year. That share is up 2.8 percentage points compared with total sales last year.
EVs made up 6.9% of sales heading into December, or roughly 976,560 units, up 1.7 percentage points compared with total sales last year. Sales of plug-in hybrid electric vehicles, or PHEVs, accounted for only 1% of U.S. sales through November.
“There’s been so much talk over the past few years about the move toward electrification and sort of forgoing hybrids, but … hybrids are not dead,” said Jessica Caldwell, Edmunds executive director of insights. “There’s a lot of consumers out there that are interested in electrification, maybe not ready to go fully electric.”
Hybrids can also cost less and relieve many concerns typically associated with EVs such as range anxiety and lack of charging infrastructure. The average hybrid this year cost $42,381, according to Edmunds. That’s below the roughly $59,400 average for an EV; $60,700 for a PHEV; and $44,800 for a traditional vehicle.
Morgan Stanley earlier this month said Toyota Motor, Honda Motor and Hyundai Motor, including Kia, account for 9 out of 10 hybrid sales in the U.S. Representatives for those automakers said they are actively attempting to increase production and sales of hybrid vehicles in the U.S.
“While the transition to full battery electric transportation will take time, hybrids and plug-in hybrids will play an equally important role in Kia America’s near and mid-term goals,” Eric Watson, vice president of Kia America sales, said in a statement to CNBC.
And other companies, such as the Detroit automakers, are following suit.
The Detroit automakers have varying strategies for hybrid vehicles.
Ford Motor offers PHEVs but is leaning into HEVs, announcing plans in September to double sales of the V-6 hybrid model during the 2024 model year to roughly 20% in the U.S. It’s part of Ford CEO Jim Farley’s plans to quadruple the company’s production of gas-electric hybrids.
Ford’s hybrid sales through November of this year are up 23% over the same period in 2022 to more than 121,000 units, or 6.8% of its total sales through that point. In comparison, Ford’s EV sales are up 16.2% to roughly 62,500 units, accounting for 3.5% of its total sales.
Battery breakdown
Both hybrids and plug-in hybrids have a traditional engine combined with EV technologies. A traditional hybrid such as the Toyota Prius has electrified parts, including a small battery, to provide better fuel economy to assist the engine. PHEVs typically have a larger battery to provide for all-electric driving for a certain number of miles until an engine is needed to power the vehicle or electric motors.
Chrysler parent Stellantis, for its part, is leaning on PHEVs for its electrification strategy, before introducing a host of EVs starting next year. The company is the top seller of plug-in hybrid electric vehicles in the U.S., and the vehicles accounted for about 10% of the company’s third-quarter sales, led by Jeep Wrangler and Grand Cherokee SUVs.
But General Motors isn’t ready just yet to alter its EV plans, which include a goal to exclusively offer all-electric vehicles by 2035.
GM led the way for plug-in electric vehicles with the Chevrolet Volt during the 2010s. The company discontinued the vehicle in early 2019, citing demand and cost concerns.
Since then, the automaker has not offered another hybrid vehicle in the U.S. other than the recently launched Chevrolet Corvette E-Ray, a hybrid version of the famed sports car. GM does offer hybrids, including PHEVs, in China.
2024 Chevrolet Corvette E-Ray hybrid sports car
GM
“We still have a plan in place that allows us to be all light-duty vehicles EV by 2035,” GM CEO Mary Barra said Monday during an Automotive Press Association meeting in Detroit. “We’ll adjust based on where the customer is and where demand is. It’s not going to be ‘if we build it they will come.’ We’re going to be led by the customer.”
Her comments come after GM President Mark Reuss told CNBC in August that he was “flexible” regarding hybrids as a way of meeting federal regulations.
“If it means we have to do that by law, then we have to do that by law,” he said. “If there’s regulations that get dealt on us, then we’re going to look at everything in our toolbox to meet them.”
Major auto companies, including the Detroit automakers, were counting on EVs to assist in offsetting the emissions and low fuel economies of larger SUVs and trucks that can cost them hundreds of millions of dollars in fines by the federal government.
GM and Stellantis were forced to pay a combined $363.8 million in penalties for failing to meet federal fuel-economy standards for cars and trucks they produced in previous years, according to information published by the National Highway Traffic Safety Administration in June.
Such fines would significantly increase under current proposals by the Biden administration to improve fuel efficiency of vehicles and move toward EVs, according to automaker lobbying groups.
The American Automotive Policy Council, a group representing the Detroit Three, earlier this year said the automakers would face more than $14 billion in noncompliance penalties between 2027 and 2032 barring significant changes to their fleets’ overall fuel efficiency. U.S. automakers have separately warned the fines would cost $6.5 billion for GM, $3 billion at Stellantis and $1 billion at Ford, according to Reuters.
NHTSA in July proposed boosting fuel efficiency requirements by 2% per year for passenger cars and 4% per year for pickup trucks and SUVs from 2027 through 2032, resulting in a fleetwide average fuel efficiency of 58 mpg.
With EVs playing a lesser role than anticipated to boost those fleetwide averages, hybrids could save automakers millions.
“Even without electric vehicles, there’s an expectation that electrification of an internal combustion engine is going to be necessary to meet regulations anyway,” said Stephanie Brinley, principal automotive analyst at S&P Global Mobility.
The resurgence of hybrids is especially important for Toyota. The world’s largest automaker is considered the pioneer of traditional hybrids, with the Prius.
The company ironically became a target of environmental groups last year for its strategy to move forward with a mix of hybrids, PHEVs and EVs, which critics viewed as a lack of commitment to an all-electric future.
Toyota’s argument at the time, and still, is that it’s meeting consumer needs and planning for a more gradual global adoption that will naturally include some markets shifting to EVs sooner than others.
The company further says it takes into account the entire environmental impact of producing EVs compared with hybrid electrified vehicles, arguing it can produce eight 40-mile plug-in hybrids for every one 320-mile battery electric vehicle and save up to eight times the carbon emitted into the atmosphere.
“People are finally seeing reality,” Toyota Chairman and former CEO Akio Toyoda, who has been heavily criticized for the slower approach on EVs, said in Octoberregarding EVs, according to The Wall Street Journal.
Toyota CEO Akio Toyoda speaks during a small media roundtable on Sept. 29, 2022 in Las Vegas.
Kristalina Georgieva, managing director of the International Monetary Fund, speaks during the Singapore FinTech Festival in Singapore, on Wednesday, Nov. 15, 2023.
Bloomberg | Bloomberg | Getty Images
Dubai, UNITED ARAB EMIRATES — The head of the International Monetary Fund on Sunday underlined the case for carbon pricing at the COP28 climate summit, saying that the oil and gas industry recognizes “the writing on the wall.”
A long-time proponent of carbon pricing, IMF Managing Director Kristalina Georgieva said this approach creates an incentive for polluters to rapidly decarbonize.
Carbon pricing ascertains the cost that a company needs to pay for its planet-warming emissions and is widely regarded as the most cost-effective and flexible way to cut such pollution.
The IMF recently raised its average price forecast to $85 a ton by the end of the decade, up from a previous forecast of $75. Underlining the scale of the challenge, Georgieva said the current average price is around $20 per ton.
“For those that have adopted a carbon price, how do we get big emitters to accept that we need to accelerate decarbonization?” Georgieva told CNBC’s Dan Murphy at the COP28 conference.
“Well, two things. One, without a carbon price, it won’t happen fast enough. So, we have to move to that incentive,” she said.
“Two, Mother Nature is helping us because countries rich and poor are already experiencing the devastating force of climate change.”
I want to tell everybody who is willing to listen that a carbon price has proven to work.
Kristalina Georgieva
IMF Managing Director
Her comments come as policymakers and business leaders convene in Dubai for the U.N.’s two-week long climate summit, which is scheduled to end on Dec. 12.
For the IMF chief, COP28 marks an important opportunity for countries to reassess policies that incentivize the use of fossil fuels. She stressed that government subsidies for coal, oil and gas hit $1.3 trillion last year.
“Now we have to pull this gradually and substitute with the other part of the incentive, which is pricing. I want to tell everybody who is willing to listen that a carbon price has [been] proven to work,” Georgieva said, adding that existing schemes — such as the EU’s Emissions Trading System — have registered a rapid reduction of emissions.
“Two, it generates revenues. The same European Union got 175 billion euros ($191 billion) collected from [a] carbon price,” she said.
“Three, it can be fair. It is fair first, because the more you pollute, the more you pay, and the less you pollute, the less you pay. But also, many countries [can] take some of this money and give it back, especially to the vulnerable people.”
Asked about the role of the oil and gas industry at COP28 and how to get Big Oil on side with carbon pricing, Georgieva said, “One of the good news that comes from research is that we are going to see the peak of oil and gas in this decade. Consumption is then going to gradually going down.”
“One of the great news from COP is a commitment to triple renewables in energy within the next years. Where the power of COP has come is by mobilizing the voices of people and that is already happening. I cannot think of any industry that is willing to be the enemy of the people,” she continued.
“I think that oil and gas is seeing the writing on the wall. We see many of the oil-producing countries diversifying quite rapidly and we also see an investment coming from money generated from oil into renewables [at] scale.”
Dubai, UNITED ARAB EMIRATES — Exxon Mobil CEO Darren Woods on Saturday said the “problem statement” that countries need to focus on at the COP28 climate summit is reducing emissions, in contrast to calls for a collective commitment to phase out all fossil fuels.
For many at the summit, which is being held in the United Arab Emirates, COP28 can only be recognized as a success if it results in a deal to “phase out” all fossil fuels, whose burning is the chief driver of the climate crisis.
The language of the final agreement, expected by or around the Dec. 12 end of the conference, will be closely monitored. A “phase out” commitment would likely require a shift away from fossil fuels until their use is eliminated, while a “phase down” could indicate a reduction in their use — but not an absolute end.
There’s also an ongoing debate about whether an agreement should center on “abated” fossil fuels, which are trapped and stocked with carbon capture and storage technologies, or “unabated” fossil fuels, which are largely understood to be produced and used without substantial reductions in the amount of emitted greenhouse gases.
Asked by CNBC’s Steve Sedgwick at COP28 whether it would be the wrong scenario for countries to agree to the phase out of abated fossil fuels, Woods replied, “I think what society ought to focus on is the true problem here, which is emissions.”
“The challenge here is eliminating emissions,” he continued. “How we do that will be a function of where the technology goes, and what the circumstances are, and where those emissions are being emitted.”
In a speech delivered to world leaders on Friday, U.N. Secretary-General António Guterres was unequivocal in his call for the burning of fossil fuels to be stopped outright, in order to prevent the worst effects of the climate crisis.
“We cannot save a burning planet with a firehose of fossil fuels,” Guterres said. “The 1.5-degree limit is only possible if we ultimately stop burning all fossil fuels. Not reduce. Not abate. Phaseout — with a clear timeframe aligned with 1.5 degrees.”
Not everyone is on board with calls to phase out fossil fuels, however. Russia has previously said it would oppose this language being used in the final agreement, while COP28 host the United Arab Emirates has instead signaled its preference for a “phase down.”
Darren Woods, chairman and chief executive officer of Exxon Mobil Corp, during the Asia-Pacific Economic Cooperation (APEC) CEO Summit in San Francisco, California, US, on Wednesday, Nov. 15, 2023. Executives from large multinationals are converging on the sidelines of APEC in San Francisco this week for an audience with the Chinese president and other Asian leaders as long-frosty US-China relations show only tentative signs of warming. Photographer: David Paul Morris/Bloomberg via Getty Images
Bloomberg | Bloomberg | Getty Images
“I don’t think there is a one-size fits all. I actually think that part of the thing that has slowed us down is this focus on making a step change and getting out of our existing energy system and starting something brand new. That is going to be a long, costly process that is going to be very, very expensive,” Exxon Mobil’s Woods said.
“Instead, what we ought to be looking at is how do we get from where we’re at today to a future with lower emissions, and that involves step changes in some areas. It certainly involves wind, solar and [electric vehicles], but it also involves decarbonizing what we currently have.”
Woods said that there are currently options to start reducing the carbon intensity of existing technologies “at a much lower cost.”
“So, stay focused on the problem statement of emissions. Keep your mind open to a variety of different solutions and make sure that the work that everybody is putting into this is focused on the areas of strength that we can make the most reduction the quickest,” he added.
Big Oil executives have previously sought to defend their core business model from climate criticism, saying it is not possible to keep everyone happy during the transition away from fossil fuels. Officials of large oil producing nations, including of the UAE, have likewise advocated for the energy security and affordability of using fossil fuels while transitioning toward the exclusive use of green energy.
Tengku Muhammad Taufik, president and group CEO of Malaysia’s state energy firm Petronas, said in early October, “So, the debate has always been posed here, I’m reminded of an old saying: ‘If you want to keep everyone happy, sell ice cream.’ We are not in the business of ice cream — and, I’m reminded, there are people who are lactose intolerant.”
Exxon announced in mid-October that it had agreed to buy shale rival Pioneer Natural Resources for a whopping $59.5 billion in an all-stock deal. The agreement was Exxon’s largest buyout since acquiring Mobil nearly 25 years ago and was seen to leave no doubt about its future support for fossil fuels.
Asked about criticism the U.S. oil giant has received from climate campaigners over the Pioneer deal, Woods said, “Well, the way we’re looking at this is, there is a demand for oil and gas today, and there will be demand for oil and gas going forward in the future.”
An Exxon Mobil gas station in Washington, DC, US, on Tuesday, Nov. 28, 203.
Bloomberg | Bloomberg | Getty Images
“What exactly that level is, we all have our different views on, but as long as there is demand out there, I think what society wants are the most responsible operators meeting that demand. And what we’re committing to do is [to] be the most responsible operator,” he added.
“We will basically produce more oil at a lower cost, more efficiently with less environmental footprint. That’s a win-win-win. And we’re improving U.S. energy security so there’s a lot to like about that deal,” Woods said.
In this aerial view water vapour and exhaust rise from the steel mill of Salzgitter AG, one Europe’s largest steel producers, on November 22, 2023 in Salzgitter, Germany.
Sean Gallup | Getty Images News | Getty Images
Policymakers and business leaders from across the globe are set to arrive in Dubai in the United Arab Emirates for the world’s biggest and most important annual climate conference.
The COP28 summit, which starts on Thursday and is scheduled to run through to Dec. 12, will provide a critical forum for government officials, business leaders and campaign groups to accelerate action to tackle the climate crisis.
The pressure to deliver is immense. Global temperatures and greenhouse gas emissions continue to break records, with no continent left untouched by more frequent and intense extreme weather events.
Climate finance is always a hotly debated talking point at the U.N. summit and COP28 promises to be no different. It refers to the financing needed to support efforts to both significantly reduce emissions and adjust to the effects of climate change.
Talks in Bonn, Germany earlier in the year became gridlocked over this issue of finance and support, with some low-income countries refusing to talk about slashing emissions unless there was an equal focus on how wealthy nations would provide cash to them.
It laid the groundwork for what one environmental group expects to be a “huge fight” between high-income and low-income nations at COP28.
Climate activists hold a banner outside the InterContinental London Park Lane during the “Oily Money Out” demonstration organised by Fossil Free London on the sidelines of the opening day of the Energy Intelligence Forum 2023 in London on October 17, 2023. (Photo by HENRY NICHOLLS / AFP) (Photo by HENRY NICHOLLS/AFP via Getty Images)
Henry Nicholls | Afp | Getty Images
Data published by the Organization for Economic Cooperation and Development in mid-November, however, showed that rich countries had finally fulfilled their promise to provide $100 billion a year to low-income countries — albeit two years after the deadline. It is hoped that this could go some way to fostering goodwill at the summit.
“COP28 has a massive role to play in setting the political direction for a transformational shift in climate ambition. But without finance and economic confidence, countries won’t be able to act at the pace and scale needed,” said Alex Scott, program lead at E3G, an independent climate think tank.
Another major financial issue will be to operationalize the so-called “loss and damage” fund, arguably the main legacy of last year’s COP27 summit in Egypt.
Rich countries, despite accounting for the bulk of historical greenhouse gas emissions, have long opposed the creation of a fund to compensate low-income countries for the loss and damage they’ve caused.
Advocates argue, however, that it is required to account for climate impacts — including hurricanes, floods and wildfires or slow-onset impacts such as rising sea levels — that countries cannot defend against because the risks are unavoidable, or the countries cannot afford it.
The establishment of the loss and damage fund at COP27 was seen as a historic breakthrough and potential turning point in the climate crisis, although many key details were left unresolved — such as who should pay into the fund, how large should it be and who should administer the money.
Countries reached a consensus on how to approach loss and damage payments during tense discissions that ran into overtime earlier this month. Yet it remains to be seen whether this fragile agreement can hold for countries to successfully operationalize the fund in the UAE.
“Billions of people, lives and livelihoods who are vulnerable to the effects of climate change depend upon the adoption of this recommended approach at COP28,” Sultan al-Jaber, president-designate of COP28, said in a statement on Nov. 5.
People carry their belongings while crossing the section of a road collapsing due to flash floods at the Mwingi-Garissa Road near Garissa on November 22, 2023. The Horn of Africa is experiencing torrential rainfall and floods linked to El Nino climate pattern. Several communities are isolated as thousands of homes have been destroyed or damaged by floods that struck at least 33 of Kenya’s 47 counties, killing more than 70 people and displacing many across the East African nation. (Photo by LUIS TATO / AFP) (Photo by LUIS TATO/AFP via Getty Images)
Luis Tato | Afp | Getty Images
Al-Jaber was seen as a controversial choice to lead COP28 discussions in Dubai given that he also works as the head of the state-run Abu Dhabi National Oil Company.
Climate activists criticized his appointment saying his position as an oil executive reflects a clear conflict of interest — akin to “putting the fox in charge of the henhouse.” His office has said he will play a pivotal role in the intergovernmental discussions to build consensus at the event.
Melanie Robinson, global climate program director at the World Resources Institute, said COP28 will be the biggest accountability moment for climate action in history — and fossil fuels will be at the heart of the talks.
She anticipated three main debates around the use of oil, gas and coal — the burning of which is the chief driver of the climate crisis.
“So, one is this ‘phase out’ or ‘phase down’ [of fossil fuels]. Actually, for us at WRI, since neither of those has got a timeline, the most important thing for us is that whatever language they agree to, it needs to send a really strong signal that the world is rapidly shifting away from fossil fuels and it will do so equitably,” Robinson told CNBC via telephone.
“The second, but perhaps slightly linked, issue is whether it is ‘abated’ or ‘unabated.’ There’s a whole debate about the role of carbon capture technology abating emissions and there are certainly some oil companies and producer countries who would try to have us believe that with CCS [carbon capture and storage] we can continue to burn fossil fuels and still achieve our climate goals,” she continued.
“We think the science suggests that is simply not true. There is no credible scenario where CCS will allow continued use of fossil fuels, let alone expanding oil and gas. So, for us, it is important that COP28 acknowledges the limited role CCS will play.”
Sultan Al Jaber, chief executive of the UAE’s Abu Dhabi National Oil Company (ADNOC) and president of this year’s COP28 climate summit gestures during an interview as part of the 7th Ministerial on Climate Action (MoCA) in Brussels on July 13, 2023.
Francois Walschaerts | Afp | Getty Images
Abated fossil fuels refer to the process in which emissions are captured and stored with carbon capture and storage technologies. The definition of unabated fossil fuels lacks clarity, despite the term cropping up in several climate commitments, but it is said to refer to fossil fuels produced and used without interventions to substantially reduce the amount of emitted greenhouse gases.
Robinson said the third talking point on fossil fuels was that there is a risk Dubai “could become a platform celebrating pledges from the oil and gas industry that fail to curb the emissions of their products.”
She warned that any net zero pledge from the oil and gas industry that doesn’t involve so-called Scope 3 emissions would not be significant. Scope 3 emissions refer to the emissions produced from across a company’s entire value chain, and often account for the lion’s share of a firm’s carbon footprint.
“For us, it’s a bit like a cigarette company saying that whatever happens to cigarettes after they leave the factory gate has got nothing to do with them. So, that I think we have to watch,” Robinson said.
One unique component of the Dubai climate talks is the conclusion of the first global stocktake since the landmark Paris Agreement — the 2015 accord that aims to limit global heating to 1.5 degrees Celsius (2.7 degrees Fahrenheit) above pre-industrial levels.
The world has already warmed by around 1.1 degrees Celsius, scientists say, after over a century of burning fossil fuels as well as unequal and unsustainable energy and land use. Indeed, it is this temperature increase that is fueling a series of extreme weather events around the world.
The stocktake is the main tool through which progress under the Paris Agreement is assessed. According to the U.N. global stocktake synthesis report released in early September, only transformational change will be enough to get the world back on track to meeting its climate goals.
Cooling towers at a nuclear power plant in Slovakia. Nuclear power is likely to be discussed in great detail at the COP28 climate change summit in Dubai, United Arab Emirates.
Janos Kummer | Getty Images News | Getty Images
The role that nuclear power should play in creating a more sustainable future has long provoked strong feelings — among advocates and critics alike.
It’s set to be a hot topic at the COP28 summit in Dubai, which begins this week. There are reports that there will be a concerted effort to get behind a big increase in nuclear capacity from now to 2050.
Of particular interest to observers will be a ministerial event called “Atoms4NetZero” on Dec. 5. Co-hosted by the International Atomic Energy Agency and the COP28 presidency, the event will “announce the IAEA Statement on Nuclear Power,” according to the COP28 website.
That, it adds, reflects the “critical role of nuclear in the net zero transition.”
Atoms4NetZero was namechecked by the World Nuclear Association in September when it announced the launch of an initiative called "Net Zero Nuclear," which aims to triple the planet's nuclear capacity by the middle of the century.
In a statement issued alongside that announcement, Rafael Mariano Grossi, the IAEA's director general, stressed the importance of the coming climate summit.
"Building on the efforts made during COP 26 and COP 27, nuclear energy will feature even more prominently at COP28," he said.
"As more nations understand the role nuclear can play in achieving energy security and decarbonisation targets, global support for nuclear energy is growing," he added.
The IAEA, for its part, will also have its own "Atoms4Climate" pavilion at COP28, where it says it will "showcase how nuclear technology and science are addressing the twin challenge of climate change mitigation and adaptation."
In a sign of how polarizing the debate around the subject can be, this month, the leader of Germany's center-right Christian Democratic Union lamented his country's move away from nuclear power after the closure of its last three plants in April 2023.
"The German government took a decision which was in our view absolutely wrong, a strategic mistake to get out of nuclear," Friedrich Merz told CNBC's Annette Weisbach.
Merz — whose party is not in the coalition government led by Chancellor Olaf Scholz — said rather than focusing only on wind and solar, "all energy sources" need to be utilized.
"The energy supply — for this country, for our industry — is decisive for our competitiveness," he went on to state.
High-profile figures in the German government do not share Merz's viewpoint.
"The phase-out of nuclear power makes our country safer; ultimately, the risks of nuclear power are uncontrollable," Steffi Lemke, Germany's federal minister for the environment and nuclear safety, said in April.
"We now face decades full of challenges before we can safely and responsibly dispose of our nuclear legacy," she later added.
"But switching off the final three nuclear power plants will usher in a new era in energy production."
This kind of analysis — that nuclear is not the answer — is shared by environmental organizations like Greenpeace.
"Nuclear power is touted as a solution to our energy problems, but in reality it's complex and hugely expensive to build," its website says. "It also creates huge amounts of hazardous waste."
"Renewable energy is cheaper and can be installed quickly," it added. "Together with battery storage, it can generate the power we need and slash our emissions."
While Germany — Europe's largest economy — has moved away from nuclear, other countries are looking to expand their capacity.
France, a major player in nuclear power, is also planning to increase its number of reactors.
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Energy markets are still affected by the shocks from Russia's full-scale invasion of Ukraine in February 2022, and discussions about nuclear power are not going away anytime soon.
"Amid today's global energy crisis, reducing reliance on imported fossil fuels has become the top energy security priority," noted the International Energy Agency, viewed by many as a leading authority on the energy transition.
"No less important is the climate crisis: reaching net zero emissions of greenhouse gases by mid-century requires a rapid and complete decarbonisation of electricity generation and heat production," it added.
"Nuclear energy, with around 413 gigawatts (GW) of capacity operating in 32 countries, contributes to both goals by avoiding 1.5 gigatonnes (Gt) of global emissions and 180 billion cubic metres (bcm) of global gas demand a year."
This satellite image provided by NASA, Aqua MODIS 12 on March 2022 shows the main piece of C-37 close to Bowman Island. Scientists are concerned because an ice shelf the size of New York City collapsed in East Antarctica, an area that had long been thought to be stable.
NASA | AP
The world’s largest iceberg is on the move for the first time in more than three decades, scientists said on Friday.
At almost 4,000 square km (1,500 square miles), the Antarctic iceberg called A23a is roughly three times the size of New York City.
Since calving off West Antarctica’s Filchner-Ronne Ice Shelf in 1986, the iceberg — which once hosted a Soviet research station — has largely been stranded after its base became stuck on the floor of the Weddell Sea.
Not anymore. Recent satellite images reveal that the berg, weighing nearly a trillion metric tonnes, is now drifting quickly past the northern tip of the Antarctic Peninsula, aided by strong winds and currents.
It’s rare to see an iceberg of this size on the move, said British Antarctic Survey glaciologist Oliver Marsh, so scientists will be watching its trajectory closely.
As it gains steam, the colossal berg will likely be launched into the Antarctic Circumpolar Current. This will funnel it toward the Southern Ocean on a path known as “iceberg alley” where others of its kind can be found bobbing in dark waters.
Why the berg is making a run for it now remains to be seen.
“Over time it’s probably just thinned slightly and got that little bit of extra buoyancy that’s allowed it to lift off the ocean floor and get pushed by ocean currents,” said Marsh. A23a is also among the world’s oldest icebergs.
It’s possible A23a could again become grounded at South Georgia island. That would pose a problem for Antarctica’s wildlife. Millions of seals, penguins, and seabirds breed on the island and forage in the surrounding waters. Behemoth A23a could cut off such access.
In 2020, another giant iceberg, A68, stirred fears that it would collide with South Georgia, crushing marine life on the sea floor and cutting off food access. Such a catastrophe was ultimately averted when the iceberg broke up into smaller chunks — a possible end game for A23a as well.
But “an iceberg of this scale has the potential to survive for quite a long time in the Southern Ocean, even though it’s much warmer, and it could make its way farther north up toward South Africa where it can disrupt shipping,” said Marsh.
The country’s leaders have been optimistic about its path to net zero, making bold claims that 50% of its power generation will come from renewables by 2030, and 100% by 2070.
However, coal production continues to soar and reliance on the fossil fuel won’t end any time soon as India struggles to find other ways to cool homes down and keep the lights on.
“India will not be able to survive completely without coal and there is no alternative for India in the coming 10 to 20 years,” said Anil Kumar Jha, former chairman and managing director of Coal India — the world’s largest coal producer.
“If you are hungry and don’t have cake to eat, will you eat bread or die hungry? That is presently what India is doing,” Jha told CNBC. “We don’t have an alternative to generate that amount of electricity, and will have to depend on coal.”
Fossil fuels, mainly coal, continue to make up 75% of India’s power supply, making it “the only fuel that India has in relative abundance,” said Neshwin Rodrigues, electricity policy analyst at Ember, a global energy think tank.
A man rides a motorcycle along a road past the National Thermal Power Corporation plant in Dadri on April 6, 2022.
Prakash Singh | Afp | Getty Images
Effects from climate change have triggered more than 700 heat waves in India over the past five decades,driving up electricity demand as more households purchase air conditioners.
“India is presently witnessing a rapid surge in electricity demand, driven by the electrification of numerous households, the burgeoning economy, and the increasing adoption of electric vehicles, infrastructure development, and cooling systems,” said Sooraj Narayan, Wood Mackenzie’s senior research analyst of power and renewables in Asia Pacific.
“This heightened power demand necessitates a reliable, cost-effective, and consistent power generation source, which coal currently fulfills,” he highlighted.
Whether we like it or not, coal will continue to have a role to play in India.
Sooraj Narayan
Wood Mackenzie
Data from the International Energy Agency showed that electricity consumption in India from air conditioners increased by 21% between 2019 and 2022.
Nearly 10% of the country’s electricity demand comes from space cooling and this will increase ninefold by 2050, the IEA said.
Simultaneously, India’s coal consumption has rapidly increased.
The country’s coal production rose to 893 million tons in 2022 to 2023, a 14% growth from 778 million tons in 2021 to 2022, according to data from the Ministry of Coal.
Jha estimated coal production could reach 1,335 million tons in 2031 to 2032.
This raises the question about whether India will be able to reach its 2030 target of achieving 50% of its energy requirements from non-fossil fuel sources. As of now, energy analysts don’t think it’s achievable.
“Coal remains a reliable fallback option for India to ensure consistent and dependable power generation, especially as it strives to meet the demands of a rapidly growing population and economy,” Narayan pointed out.
This could be the norm for India until after 2030 — when coal demand is expected to peak, according to Sumant Sinha, founder of Indian renewable energy firm ReNew Power.
“What we cannot afford as a country is essentially to shortchange our growth on account of a lack of power capabilities. Whether we like it or not, coal will continue to have a role to play in India,” Sinha told CNBC’s “Squawk Box Asia” on last week.
All the analysts who spoke to CNBC agreed the country’s solar, wind and hydro energy capabilities are still unreliable as they are dependent on weather conditions and the climate.
“Renewable sources like solar and wind are inherently variable, relying on natural factors such as sunlight, wind and water availability. This variability makes them less dependable for meeting the nation’s burgeoning power demand,” Wood Mackenzie’s Narayan said.
A worker walks through the Tapovan Vishnugad hydropower plant project construction site in Uttarakhand, India, on Feb. 9, 2022.
Bloomberg | Bloomberg | Getty Images
The South Asian nation currently has around 180 gigawatts of installed renewable energy, and hydropower makes up half of that mix. However, more advanced infrastructure is needed to ensure it serves as a reliable alternative to coal in the future.
“While India seeks to leverage hydropower to balance its grid, this source of renewable energy is not without its complexities,” Narayan said, explaining that projects are often delayed.
“The construction of dams and run-of-river projects for hydropower often encounters prolonged delays, extensive gestation periods, and is contingent on variable rainfall patterns.”
Solar and wind energy face the same hurdles as underdeveloped power grids curtail progress in the sector.
“India’s existing grid infrastructure is not fully equipped to handle the integration of variable renewable energy sources like solar and wind,” according to Narayan.
Ramping up investments — particularly in battery storage — may bethe most significant way for India to meet its net-zero transition goals.
India currently has around 180 gigawatts of installed renewable energy and aims to reach 500 gigawatts by 2030, according to government agency Invest India.
“Grid-scale battery storage is costly, with supply chain disruptions further driving up prices due to events like the Covid-19 pandemic and geopolitical conflicts. These complexities render it challenging to rely solely on renewables for consistent and dependable power generation,” Narayan said.
Water being released from the Madupetty dam and hydro power station in Kerala, India.
Nurphoto | Nurphoto | Getty Images
Another issue is that renewables are a frontloaded investment where “all your investments happen on the day of installation. You pay for everything upfront,” said Rodrigues from Ember.
“The problem with that is that you require a lot of financing capacity, and there is limited financing capacity in India,” he added, warning that India’s net-zero goals cannot be met without foreign investments.
“Going forward, we need to find ways to first phase down coal, then we can talk about completely phasing it out.”
Ford workers produce the electric F-150 Lightning pickup on Dec. 13, 2022 at the automaker’s Ford Rouge Electric Vehicle Center (REVC).
Michael Wayland | CNBC
As a result, it’s postponing about $12 billion in planned spending on new EV manufacturing capacity.
Customers’ reluctance to pay extra for EVs has complicated Ford’s ambitious and expensive plans to sharply increase production of those vehicles. While Ford’s – and the industry’s – sales of EVs are growing, they aren’t growing at the pace Ford had expected.
Ford executives emphasized that the company isn’t cutting back its spending on future electric vehicle models. But it now plans to ramp up its EV manufacturing capacity, and its spending on that capacity, more gradually than previously planned.
“We’re not moving away from our second generation [EV] products,” CFO John Lawler said in a media briefing Thursday. “We are, though, looking at the pace of capacity that we’re putting in place. We are going to push out some of that investment.”
Ford Motor said Thursday that many customers in North America are no longer willing to pay a premium for an electric vehicle over an internal-combustion or hybrid alternative.
Lawler said that Ford will postpone about $12 billion in planned spending on manufacturing capacity for EVs, including a planned second battery plant at a new campus in Kentucky. But, he noted, construction of Blue Oval City – Ford’s new EV manufacturing campus in Tennessee – will continue as originally planned.
“The customer is going to decide what the volumes are,” Lawler said. “Ford is able to balance production of gas, hybrid and electric vehicles to match the speed of EV adoption in a way that others can’t.”
As part of its third-quarter earnings report, Ford said on Thursday that its electric-vehicle business unit, called Ford Model e, lost $1.3 billion on an operating basis in the period. That’s roughly double its year-ago loss, despite a 26% increase in revenue.
Through the first three quarters of 2023, Model e posted an operating loss of about $3.1 billion, on track with Ford’s previous guidance calling for a full-year operating loss of $4.5 billion for the Model e business unit.
Ford withdrew all of its 2023 guidance Thursday in light of its tentative deal with the United Auto Workers labor union.
Gianluca Grimalda, a climate researcher and environmental campaigner, intends to “slow travel” back to Europe from Bougainville off the coast of Papua New Guinea.
Gianluca Grimalda
Gianluca Grimalda was faced with a dilemma.
His employer, the Kiel Institute for the World Economy, a think tank based in Germany, ordered him at short notice to wrap up his fieldwork in Bougainville off the coast of Papua New Guinea in the southwestern Pacific and return to his desk — or lose his job.
The ultimatum effectively required Grimalda, a climate researcher and self-styled “slow traveler,” to promptly board a flight back to Europe.
He refused and was fired — but says he would make the same decision again in a heartbeat.
Speaking to CNBC from the remote province of East New Britain in Papua New Guinea, Grimalda said he started “slow traveling” about 13 years ago as part of an attempt to be at peace with himself during the deepening climate crisis.
In practice, that meant flying as little as possible when attending international conferences and instead prioritizing more sustainable methods of transport to reduce his environmental footprint.
In the current situation, I think the really insane thing is to get on with business as usual because it is really an abnormal situation.
Gianluca Grimalda
Climate researcher
Emissions from air travel are a significant contributor to climate change and aviation is known to be one of the most challenging sectors to decarbonize. Indeed, researchers have estimated that air travel accounts for about 4% of human-induced global warming.
“Even when coming here seven months ago I managed to slow travel only until Singapore, then I caught a plane because it was just impossible — as I know now — to find some kind of different mode of transport from airplanes,” Grimalda said.
“I was really determined to come back entirely ‘no fly,’ partly for my own moral commitment … but I also wanted to send a strong signal that in the current situation of progressive climate breakdown, it is very important that what we consider extraordinary actions become more and more normal.”
Grimalda said on Tuesday that he’d been stuck on a cargo ship in a compound in East New Britain for the past 10 days.
However, he hoped to be able to resume his epic journey of 15,000 miles (24,140 kilometers) via overland routes from Friday. He plans to finally make it back to Europe around the second week of December.
Grimalda spent several months conducting fieldwork into the social impact of climate change on the island of Bougainville.
Gianluca Grimalda
On returning to Germany later this year, Grimalda said, he intends to file a lawsuit against his former employer for unlawful dismissal.
A spokesperson for the Kiel Institute for the World Economy told CNBC that the institute does not comment on internal personnel matters in public.
“What is public and obvious: Dr. Grimalda planned his trip to Papua with our support. We supported an earlier ‘slow travel’ trip to Papua by him before,” the spokesperson said, adding that the institute always supports its employees traveling in a climate-friendly way during business trips.
“We are committed to do without air travel in Germany and in other EU countries as far as we can. If air travel is necessary, we provide CO₂ compensation. We pay to Atmosfair to offset emissions through climate protection projects,” they added.
Grimalda’s slow journey home comes after several months conducting fieldwork into the social impact of climate change on the island of Bougainville. He said the completion of his research project had been delayed by a series of unforeseeable incidents, from “major security threats” to a volcanic eruption.
When asked how he felt about losing his job because of his refusal to fly, Grimalda said, “I think it was a price worth paying and it is something I would do again for at least three reasons.”
“First of all, I perceived this request by my institute as a kind of moral and psychological blackmail and I thought that if I had given in to such a blackmail I would have lost of my dignity. So, I really didn’t want to give in on that.”
“The second was that I had made a promise to all 1,800 participants in my research that I would have made everything possible to alleviate their suffering. These are people that experience climate change on a daily basis,” he added, noting that the coastal communities he’d interacted with had been forced to relocate inland in light of the rising sea level.
“And finally, I thought that in the end this was an opportunity that maybe I had to take because as a concerned climate scientist and concerned citizen for the climate breakdown, I really am trying everything possible.”
Grimalda said losing his job wasn’t the end of the world and suggested it may instead be a “sign of fate” to do something else.
“So, I said, I’m going to take this gamble. Maybe this is the chance that I can really persuade the largest number of people that I could ever speak with that we really need to change the course of our action as urgently as possible,” he said.
“In the current situation, I think the really insane thing is to get on with business as usual because it is really an abnormal situation. I must do what I can to really sound this alarm as strongly as possible, so this is why I have made this decision. I think it was the right decision.”
Wind turbines and a lignite-fired power plant photographed in in Germany.
Jan Woitas | Picture Alliance | Getty Images
Demand for oil, coal and natural gas is set to peak before the end of this decade, with fossil fuels’ share in the world’s energy supply dropping to 73% by the year 2030 after being “stuck for decades at around 80%,” the International Energy Agency said Tuesday.
A transformative shift in how the planet is powered is also underway, with the “phenomenal rise of clean energy technologies” like wind, solar, heat pumps and electric cars playing a crucial role, according to a statement accompanying the IEA’s World Energy Outlook 2023 report.
Energy related carbon dioxide emissions are also on course to peak by the year 2025.
Despite these seismic shifts, the IEA says more effort is required to limit global warming to 1.5 degrees Celsius, a key goal of the Paris Agreement on climate change.
The IEA’s analysis of governments’ “current policy settings” shows the world’s energy system is on course to look very different in the next few years.
In its statement, the Paris-based organization said it sees “almost 10 times as many electric cars on the road worldwide” in 2030, with “renewables’ share of the global electricity mix nearing 50%,” higher than the roughly 30% today.
Among other things, heat pumps — as well as other electric heating systems — are on course to outsell boilers that use fossil fuels.
“If countries deliver on their national energy and climate pledges on time and in full, clean energy progress would move even faster,” the IEA’s statement said.
“However, even stronger measures would still be needed to keep alive the goal of limiting global warming to 1.5 °C,” it added.
“As things stand, demand for fossil fuels is set to remain far too high to keep within reach the Paris Agreement goal of limiting the rise in average global temperatures to 1.5 °C,” the statement went on to say.
In a sign of how high the stakes are, the IEA’s report said its Stated Policies Scenario was now “associated with a temperature rise of 2.4 °C in 2100 (with a 50% probability).”
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Tuesday’s report reaffirms the content of an op-ed published in September 2023 that was authored by the IEA’s executive director, Fatih Birol, and published in the Financial Times.
In remarks published Tuesday, Birol sought to emphasize the huge potential for change while also highlighting the massive amount of work that still needs to be done.
“The transition to clean energy is happening worldwide and it’s unstoppable,” he said. “It’s not a question of ‘if’, it’s just a matter of ‘how soon’ — and the sooner the better for all of us,” he added.
“Governments, companies and investors need to get behind clean energy transitions rather than hindering them,” Birol said.
“There are immense benefits on offer, including new industrial opportunities and jobs, greater energy security, cleaner air, universal energy access and a safer climate for everyone.”
“Taking into account the ongoing strains and volatility in traditional energy markets today, claims that oil and gas represent safe or secure choices for the world’s energy and climate future look weaker than ever,” Birol said.
The IEA’s report comes just weeks ahead of the U.N.’s COP28 climate change summit in the United Arab Emirates.
The shadow of the Paris Agreement, reached at COP21 in late 2015, looms large over the IEA’s report.
The landmark accord aims to “limit global warming to well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.”
The challenge is huge, and the United Nations has previously noted that 1.5 degrees Celsius is viewed as being “the upper limit” when it comes to avoiding the worst consequences of climate change.
In this photo taken on Oct. 10, 2023, a man looks at a forest fire as it approaches houses in Ogan Ilir, South Sumatra in Indonesia.
Al Zulkifli | AFP | Getty Images
Damage from the global climate crisis has amounted to $391 million per day over the past two decades, a report showed.
Wildfires, heatwaves, droughts and other extreme events attributable to climate change have incurred costs averaging over a hundred billion per year from 2000 to 2019, a recent study published in the journal Nature Communications showed.
“We find that US$143 billion per year of the costs of extreme events is attributable to climatic change. The majority (63%) of this is due to human loss of life,” scientists wrote in the report. The remainder stems from the destruction of property and other assets.
The years with the highest amount of losses were 2008, followed by 2003 and then 2010 — all of which were driven by high mortality events, the research said.
The estimates of the losses were calculated by combining the economic data of these losses, along with how much global heating has exacerbated weather events.
The research, however, notes that there is an underestimation of the true costs of climate change due to the difficulty of measuring indirect losses. Examples cited include productivity losses arising from a heatwave, mental health impacts borne by people, or the loss of access to education and jobs if a place of employment is damaged.
Locals watch fire approach the village of Pournari, in the area of Magoula, some 25km southwest of the Greek capital Athens on July 18, 2023.
Spyros Bakalis | AFP | Getty Images
Lack of data from lower-income countries could also add to the underestimation of true costs, the study noted.
“While the limitations of this approach are significant, this research demonstrates how a more global approximation of the human induced extreme weather event economic costs could be constructed,” the researchers noted.
They called for an increase in adaptation policies to minimize these climate-change attributed costs, such as the building of flood protection or improving early warning signal systems heralding extreme weather events.
Other organizations have also tried to quantify losses incurred by climate disasters.
The World Meteorological Organization estimated that between 1970 and 2021, there were nearly 12,000 reported climate disasters that resulted in 2 million deaths and economic losses amounting to $4.3 trillion, largely from developing countries.
“The planet is far off track from meeting its climate goals,” the WMO said in a September report, adding that rising global temperatures have been accompanied by more extreme weather.
Search and recovery team members check charred buildings and cars in the aftermath of the Maui wildfires in Lahaina, Hawaii, on August 18, 2023.
Yuki Iwamura | Afp | Getty Images
Governments agreed in the 2015 Paris climate accord to limit global heating to well below 2 degrees Celsius, compared to pre-industrial levels, and pursue efforts to limit the temperature rise to 1.5 degrees Celsius.
But that seems to be a slipping target.
“The chance of the annual mean global near-surface temperature temporarily exceeding 1.5 °C above pre-industrial levels for at least one of the next five years is 66% and is increasing with time,” WMO forecasts.
