Lexus plans to launch a next-generation EV with super-low drag, high range, and a gigacast vehicle structure, in the most significant electric vehicle announcement to come out of this year’s Japan Mobility Show.
While the LF-ZC may still be a concept, it’s one that the luxury mark owned by Toyota is committing to, with production set to begin in 2026. That’s two-plus years from now, and while it’s hard to say how the vehicle landscape will change during that period, it’s not that far off, all things considered. Given what Lexus is saying about the LF-ZC, this sounds like a legitimately next-gen vehicle, using prismatic batteries, steer-by-wire, and a gigacast modular vehicle structure (initially pioneered by Tesla, but now being pursued by many automakers).
Lexus says the LF-ZC will have a drag coefficient under 0.2, and based on the concept’s Prius-esque teardrop design, this does look like an aero-first EV. The front doors on the concept version of the car are even shaped to channel air from the wheels.
Lexus isn’t sharing any details on range, saying only that the LF-ZC will have twice the range of “conventional” battery electric vehicles. It’s impossible to know what Lexus considers conventional, but I’d suspect nothing in the Tesla lineup qualifies. Anything in excess of 400 miles would certainly be impressive, and if Lexus was working with a “conventional” figure of less than 200 miles, I think we’d all be pretty disappointed! But this is just speculation, and that’s all Lexus has really left us to do here: speculate. (Edit: Some outlets are saying Lexus considers 500 kilometers to be the “conventional” figure, putting the LF-ZC at 1000 kilometers or around 620 miles of range. If true, that could be a game-changer. It also sounds pretty optimistic.)
One thing that may not be apparent from the images is that this is a small sedan, not a mid-size crossover. The LF-ZC has a wheelbase just 15 mm longer than a Tesla Model 3’s, at 2,890 mm. It’s also 50 mm shorter (vertically) than the Model 3, coming in at 1,390 mm — I’d suspect rear headroom is not going to be especially great in this car. With Lexus’s aggressive aerodynamic goals, that does make sense, though. Overall vehicle length is around the same, with the LF-ZC slightly longer than the Tesla.
Using steer-by-wire, it’s possible Toyota will be able to lay out the cabin of the LF-ZC to be roomier than its diminutive wheelbase would suggest. That’s because steer-by-wire requires no steering column — or any other components connecting the steering wheel to the vehicle wheels. The steering wheel (or yoke) becomes, effectively, a digital joystick. Everything happens via electronic position sensors on the yoke, with control modules relaying those inputs to the electric power steering system, which then adjusts the wheel angle accordingly.
Steer-by-wire as a technology isn’t new, per se, but it’s rarely been seen outside concept cars. The momentum behind a steer-by-wire transition, though, is the greatest it’s ever been. (Tesla recently patented such a system.) Getting the feel and responsiveness of a steer-by-wire system right has long proven challenging, though. Such designs lack the direct and instantaneous connection to the rolling components of traditional hydraulic and electric-assist power systems. Initial driving impressions of Lexus’s prototypes for such systems have been mixed.
So why keep trying to make steer-by-wire happen, Gretchen? Cost and packaging: By eliminating big, stress-bearing connective components from the steering system, manufacturers can save money and dramatically reduce the overall footprint of that system. In short: The steering wheel (or yoke) becomes just a steering wheel — a computerized control interface, nothing more. That, in turn, frees up a lot of volume in the dash area, potentially opening up more of the cabin as usable passenger space. In vehicular design, centimeters count just as much as dollars and cents, and a steer-by-wire system theoretically optimizes for both. For vehicle manufacturers, it’s a win-win. But for consumers, if steer-by-wire doesn’t feel reassuringly safe and communicative during driving, it could end up being a huge turn-off. (Some people position steer by wire as a liability risk, but I think this is a red herring — all modern cars use throttle by wire, and many now use brake by wire, too. There’s nothing special about steering from a liability perspective for a carmaker.)
As for the rest of the LF-ZC, we just don’t have much to work with yet. Aesthetically, the car looks like a 4th Gen Prius someone ran through a Tron filter. The design isn’t brutal, exactly, but form closely follows function here, likely reflecting the price positioning of this car as an entry-level premium sedan.
The interior of the LF-ZC is so dark and vague that I’d take almost none of what you see inside as reflective of final production intent — though if steer-by-wire does happen, that yoke could end up being pretty close to reality. (Steer-by-wire systems don’t require hand-over-hand steering since they can infinitely adjust the steering ratio by vehicle speed. This makes a yoke more practical.) The interior concept looks pretty spartan overall, aside from that massive passenger infotainment display. The driver gets two smartphone-sized screens mounted at an angle, one to the left of the steering yoke, and one to the right, along with an instrumentation display above it at the top of the dash. The number of hard buttons and switches in the LF-ZC appears to be “as near to zero as humanly possible” — call it cost-cutting or Tesla copycatting; either shoe fits.
Electrek’s Take
This is as close as Toyota (well, Lexus) has ever come to offering a response to Tesla. The LF-ZC is very plainly positioned in the same small luxury sedan space the Model 3 is, and it’s a segment that a manufacturer as large as Toyota can’t ignore if it’s going to be a serious player in EVs. But without details on range, power, or pricing, it’s very difficult to say how competitive Lexus’s offering will be. If the alleged estimate of over 600 miles of range is even close to reality, though, that feels worth the wait on other details.
Assuming the LF-ZC does go on sale in 2026, that will likely put it smack in the middle of the lifecycle of the new Model 3 Highland refresh, but still potentially ahead of whatever Tesla’s “next-gen” mass market vehicle ends up being.
Given this car is badged as a Lexus, that also opens the door for a cheaper Toyota variant down the road. The Prius-like styling, in my view, is no accident here. Drop some of the more aspirational aero, add some plastic trim, and take away a few of those displays, and it’s not hard to imagine a more basic Toyota take on this concept. Launching on Lexus, a luxury brand, would also be a way to offset some of the high initial cost of a new electric model as it scales up.
Steer-by-wire is a technology Toyota and Lexus seem highly motivated to adopt, and the space and cost-saving implications clearly illustrate their reasoning. While I’ve never driven a steer-by-wire car, everything I’ve read and heard to date has been underwhelming. Let’s hope Lexus irons out the kinks before the LF-CZ comes to market. My most optimistic take on steer-by-wire is that it at least makes a yoke a defensible design decision, since the steering controls no longer need to rotate to the extreme multi-turn angles of a traditional wheel (Lexus’s most recent steer-by-wire concept has 200 degrees of total rotation — meaning a little over 90 degrees left and right).
Toyota has given a lot of lip service when it comes to BEVs and offered some wild concepts, but the LF-ZC seems like a pretty concrete promise to actually build something.
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U.S. President Donald Trump with Mohammed bin Salman, crown prince of Saudi Arabia, at the start of the Group of 20 summit on 28 June 2019.
Bernd von Jutrczenka | picture alliance | Getty Images
DUBAI, United Arab Emirates — The wealthy Arab Gulf states are in a better position than many other regions of the world to manage the economic impact of U.S. President Donald Trump’s tariffs, economists and regional investors say. But a shaky outlook for the price of oil could put some countries’ budgets and spending projects at risk.
Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, Oman, and Qatar make up the Gulf Cooperation Council. Together, they comprise around $3.2 trillion in sovereign financial assets, accounting for 33% of the total sovereign assets worldwide, according to GCC Secretary-General Jasem Mohamed Albudaiwi.
The GCC also holds approximately 32.6% of the world’s proven crude oil reserves, according to the Statistical Center of the Cooperation Council for the Arab States of the Gulf.
That makes it both an asset for the Trump administration as well as vulnerable to its policies, as Trump has long pushed for OPEC, the oil producer alliance led by Saudi Arabia, to pump more oil to help lower oil prices and offset inflation in the U.S.
A lower oil price, however, can significantly impact the budget deficits and spending plans for those countries, whose economies — despite diversification efforts — still rely heavily on hydrocarbon revenues.
Beneficial relations with Trump
Ben Powell, BlackRock’s chief investment strategist for Asia-Pacific and the Middle East, who is based in Abu Dhabi, said the region’s warm relations with Trump strengthens its hand when it comes to potential tariff negotiations. Some GCC countries have also expanded their role in global diplomacy. One example is Riyadh’s hosting of peace talks to end the Russia-Ukraine war, which has made it ever more important to Washington.
“I do think the Middle East, with the deep relationship with the U.S. that they have, should come out okay,” Powell told CNBC’s “Access Middle East” on Monday.
“I think we’re all going to be swept into the maelstrom over the next short period of time. That’s inevitable. But the Middle East, with the balance sheet strength that they have, with the energy support that they still have, providing funding on a near ongoing basis … for me, the Middle East — maybe not today, but over time — should be a relative winner within that mix” when it comes to emerging markets, Powell said.
In considering what the firsthand impact of tariffs might be, Monica Malik, chief economist at Abu Dhabi Commercial Bank, noted that the U.S. is not a major export market for the Gulf.
“The GCC should be in a relatively favourable position to withstand headwinds, especially the UAE,” she wrote in a report for the bank on Friday.
While the region faces the blanket 10% universal tariff as well as previously imposed tariffs on all foreign steel and aluminum — products that the UAE and Bahrain both export — “we expect the direct impact to be relatively contained, as the US is not a key destination for Gulf exports, averaging just c.3.7% of the GCC’s total exports in 2024,” she said.
Threat to spending plans
But the oil price outlook is critical for Gulf states’ budgets and future spending plans — particularly for Saudi Arabia, which has embarked on trillions of dollars worth of ambitious mega-projects as part of Vision 2030, Crown Prince Mohammed bin Salman’s sweeping initiative to diversify the kingdom’s economy away from oil. The success of the plan, perhaps ironically, relies heavily on oil revenues.
Global benchmark Brent crude was trading at $61.44 per barrel on Wednesday at 8:30 a.m. in London, down nearly 17% year-to-date. Additional pressure was put on the price after OPEC+, the oil producer alliance led by Saudi Arabia and Russia, made a surprise decision to accelerate planned crude production hikes, further bolstering global supply.
Saudi Arabia needs oil at more than $90 a barrel to balance its budget, the International Monetary Fund estimates. Goldman Sachs this week lowered its oil price forecast for 2026 to $58 for Brent and $55 for U.S. benchmark WTI crude. That’s a significant move lower from its forecast just last Friday of $62 for Brent and $59 for WTI in 2026.
“A weaker global demand and greater supply adds downside risk to our Brent forecast for 2025, though we wait for more market clarity before making any changes,” ADCB’s Malik told CNBC on Monday. OPEC+ is meant to increase oil production levels again in May, and she predicts the group will pause that plan if crude prices stay where they are or fall further.
“Our greatest concern would be a sharp and sustained oil price fall, which would require a reassessment of spending plans – government and off budget – including capex, while also potentially affecting banking sector liquidity and wider confidence,” Malik warned.
Aerial view of containers for export sitting stacked at Qingdao Qianwan Container Terminal on April 5, 2025 in Qingdao, Shandong Province of China.
Vcg | Visual China Group | Getty Images
The United Nations shipping agency is on the cusp of introducing binding regulations to phase out fossil fuel use in global shipping — with the world’s first-ever global emissions levy on the table.
The International Maritime Organization (IMO) will this week hold talks at its London headquarters to hammer out measures to reduce the climate impact of international shipping, which accounts for around 3% of global carbon emissions.
Some of the measures on the table include a global marine fuel standard and an economic element, such as a long-debated carbon levy or a carbon credit scheme.
If implemented, a robust pricing mechanism in the shipping sector would likely be considered one of the climate deals of the decade.
An ambitious carbon tax is far from a foregone conclusion, however, with observers citing concerns over sweeping U.S. tariffs, a brewing global trade war and reluctance from members firmly opposed to any kind of levy structure.
Sara Edmonson, head of global advocacy at Australian mining giant Fortescue, described the talks as “absolutely historic,” particularly given the potential for a landmark carbon levy.
“I think it would be an absolute game-changer. No other industry on a global level has made a commitment of this size and I would argue most countries haven’t made a commitment of this size,” Edmondson told CNBC via telephone.
She added, however, that “the jury is still very much out” when it comes to a global carbon price.
It’s not really a question of whether they get agreement, it’s just how ambitious it is, how effective it is and how many unhappy people there are.
John Maggs
President of the Clean Shipping Coalition
“There are also a lot of discussions around levy-like structures because obviously the word levy in very polarized countries like the U.S., like Australia and even in China, can be very challenging. But I think there are really good discussions around levy-like structures that would ultimately have an equivalent effect,” Edmondson said.
The IMO’s Marine Environment Protection Committee (MEPC) is scheduled to conclude talks on Friday.
‘A great opportunity’
Some of the biggest proponents of a global greenhouse gas emissions charge on the shipping industry include Pacific Island states, such as Fiji, the Marshall Islands and Vanuatu, and Caribbean Island states, including Barbados, Jamaica and Grenada.
Those opposed to a carbon levy, such as Brazil, China and Saudi Arabia, have raised concerns over economic competitiveness and increased inequalities.
“For countries like Vanuatu … we see the UNFCCC isn’t moving fast enough — and this is the great opportunity,” Vanuatu Minister Ralph Regenvanu said Monday.
Secretary-General of the International Maritime Organization (IMO) Arsenio Dominguez delivers a speech at the IMO Headquarters, in London, on January 14, 2025.
Benjamin Cremel | Afp | Getty Images
The UNFCCC refers to the United Nations Framework Convention on Climate Change, a multilateral treaty that has provided the basis for international climate negotiations.
If adopted, it would be “the first industry-wide measure adopted by a multilateral UN organisation with much more teeth than we could get in the UNFCCC process,” Regenvanu said.
Delegates at the IMO agreed in 2023 to target net-zero sector emissions “by or around” 2050 and set a provision to finalize a basket of mid-term carbon reduction measures in 2025.
Calls for a ‘decisive’ economic measure
“We’re going to get something,” John Maggs, president of the Clean Shipping Coalition, a group of NGOs with observer status at the IMO, told CNBC via telephone.
“The timetable is quite clear and they are working really, really hard to stick to it. So, I think it’s not really a question of whether they get agreement, it’s just how ambitious it is, how effective it is and how many unhappy people there are,” Maggs said.
Clean Shipping Coalition’s Maggs warned that a sizable gap still exists between progressive and more conservative forces at the IMO.
“My feeling from the progressive side is that people are optimistic and confident because the case they are making is a sound one and they’ve got the technical expertise to back them up,” Maggs said.
“But, at the end of the day, China and Brazil and others aren’t just going to go, ‘OK you can have your way.’ There is going to be payment exacted in some way or other,” he added.
PORTSMOUTH, UNITED KINGDOM – OCTOBER 28: The container ship Vung Tau Express sails loaded with shipping containers close to the English coast on October 28, 2024 in Portsmouth, England.
Matt Cardy | Getty Images News | Getty Images
The international shipping sector, which is responsible for the carriage of around 90% of global trade, is regarded as one of the hardest industries to decarbonize given the vast amounts of fossil fuels the ships burn each year.
Angie Farrag-Thibault, vice president of global transport at the Environmental Defense Fund, an environmental group, said a successful outcome at the IMO would be an ambitious global fuel standard and a “decisive” economic measure to ensure shipping pollution is significantly reduced.
“These measures, which should include a fair disbursement mechanism that uses existing climate finance structures, will encourage ship owners to cut fossil fuel use and adopt zero and near-zero fuels and technologies, while supporting climate-vulnerable regions at the speed and scale that is needed,” Farragh-Thibault said.
The US wind industry installed just 5.2 gigawatts (GW) in 2024 – the lowest level in a decade, according to Wood Mackenzie’s new US Wind Energy Monitor report. Installations are expected to rebound in 2025, but the real concern lies in US wind’s sharply downgraded 5-year outlook. As for the reason behind that bleak forecast, we’ll give you one guess as to why, and it starts with a T.
Wood Mac reports that 3.9 GW of onshore wind came online last year, along with 1.3 GW of onshore repowers and 101 megawatts (MW) of offshore wind.
Onshore wind
The US is expected to achieve more than 160 GW of installed onshore capacity by 2025, and onshore growth is projected to bounce back from 2024 and surpass 6.3 GW this year.
“The cliff in 2023 and 2024 created by the Production Tax Credit (PTC) push in 2022 will come to an end,” said Stephen Maldonado, research analyst at Wood Mackenzie. “Despite the uncertainty created by the new administration, the massive number of orders placed in 2023 culminating in projects now under construction support the short-term forecast.”
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The pipeline for onshore has 10.8 GW currently under construction through 2027, with another 3.9 GW announced.
GE Vernova led onshore wind installations in 2024 with 56% of the market and will continue to lead in connections for the next five years. It was followed by Vestas (40%) and Siemens Gamesa (4%).
Offshore wind
Offshore wind is projected to increase in 2025 as well, with 900 MW of installed capacity, up from a disappointing 101 MW in 2024. However, several projects have been shelved in the wake of Trump’s anti-wind executive orders, which downgraded the five-year outlook by 1.8 GW.
Electrek’s Take on US wind’s 5-year outlook
According to Wood Mac, 33 GW of new onshore wind capacity will be installed through 2029, along with 6.6 GW of new offshore capacity and 5.5 GW of repowers. However, due to Trump’s anti-wind policy and economic uncertainty, this five-year outlook is 40% less than a previous total of 75.8 GW. Growth will happen, but it’s going to be slower.
The main reason is Trump’s flourish of his Sharpie on executive orders that include “temporary” withdrawal of offshore wind leasing areas and putting a stop to onshore wind on federal lands. Plus, firing all those federal employees will likely make permitting wind farms a slower process. (Trump just wrote more executive orders today allowing coal projects on federal lands; he won’t have federal employees to issue permits for those, either.) He’s worked to throw up obstacles for wind projects in favor of fossil fuels. He won’t stop the wind industry, but he’s managed to get some projects canceled, and he’ll make things more of a slog over the next few years.
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