Carrier, the century-old inventor of the air conditioner, is moving on to the home heat pump
Heat pumps are becoming more popular for residential housing with energy prices increasing and the need to reduce use of fossil fuel heating systems.
Andrew Aitchison | In Pictures | Getty Images
In case you haven’t noticed, heat pumps are hot. Although these devices, which use electricity to generate both air conditioning and heat, have been around for decades, the latest models are much more efficient and cost-effective alternatives to conventional fossil-fuel furnaces and air conditioners.
But there are other reasons why heat pumps are fast becoming popular with homeowners. The federal government, as well as an increasing number of states, are offering consumers attractive tax credits and rebates for buying and installing heat pump systems as a way to reduce climate-warming greenhouse gas emissions and propel the transition to renewable energy.
All of this is transforming Carrier Global, the nearly 100-year-old manufacturer whose founder, Willis Carrier, invented air conditioning. Over the past year, the Palm Beach Gardens, Florida-based company has been repositioning itself to capitalize on the fast-growing market for heat pumps and other sustainable heating, ventilating and air conditioning (HVAC) technologies.
“We all know that sustainability is a megatrend,” Carrier Global Chairman and CEO David Gitlin told a group of investors in February. “HVAC has to have a critical seat at the table.”
After being spun off from United Technologies — its parent since 1979 — in 2020, and then divesting several non-HVAC businesses, Carrier made its biggest bet yet on the heat pump boom when it acquired Germany’s Viessmann Climate Solutions for roughly $13 billion last April. In addition to proprietary heat pump technology, Viessmann offers renewable energy capabilities and home battery storage, as well as smart home system controls and applications that can be integrated to drive energy efficiency.
“HVAC is at an inflection point right now, with a tremendous shift toward electrification, going from fossil fuel-burning boilers and furnaces to heat pumps,” said Hakan Yilmaz, Carrier’s chief technology and sustainability officer. “In addition, the cooling side of HVAC is expected to triple by 2050, because 2.8 billion people live in hot climate zones and only about 8% have access to HVAC today,” he said. The massive scale and massive consumption of the energy resiliency issue, Yilmaz says, puts the HVAC industry in a position to capitalize.
Heat pumps have a history dating back to 1850s
The thermodynamic science behind heat pumps was developed in the 1850s, when the first ones were invented, and they’ve been used in homes since the 1960s. Heat pumps use electricity to transfer heat from a cool space to a warm space, making the cool space cooler and the warm space warmer. Many of today’s models are three to five times more efficient than fossil-fuel furnaces, and work well even in extremely cold and hot weather.
The most common type is the air-source heat pump system, comprising an outdoor unit — which resembles a conventional central AC device — and an indoor unit that hooks up to either a blower that circulates warm or cool air through ducts and vents or to one or more ductless mini-splits installed in rooms throughout a house.
14 February 2024, Saxony, Leipzig: Michael Kretschmer (r, CDU), Minister President of Saxony, talks to Viessmann employee Sebastian Kowalski about a heat pump at the Haus-Garten-Freizeit trade fair. Kretschmer takes part in the East Trade Policy Forum.
Picture Alliance | Picture Alliance | Getty Images
Compared to a gas boiler, heat pumps reduce GHG emissions by 20% when operating on fossil fuel-generated electricity and as much as 80% when operating on cleaner electricity, according to the International Energy Agency. Residential and commercial buildings account for 30% of global energy consumption and produce 26% of energy-related GHG emissions, per the IEA.
In 2023, air-source heat pumps outsold fossil-fuel furnaces for the second year in a row, according to AHRI, the trade association representing HVAC manufacturers. Rewiring America, a nonprofit advocate for mass-scale electrification, estimates that currently, 16% of U.S. homes use heat pumps for heating and cooling. In September, the U.S. Climate Alliance, a bipartisan coalition of 25 governors, agreed to collectively reach 20 million heat pump installations by 2030, with the aim of ensuring at least 40% of benefits flow to disadvantaged communities.
In the U.S., so far cold states are leading the way
Although heat pumps have become popular for air conditioning in southern states, Maine has the highest rate of adoption, installing 100,000 units in households two years ahead of schedule and aiming to hook up another 175,000 by 2027. That dispels the notion, often promulgated by the oil and gas industry and utilities, that heat pumps don’t work well in below-freezing temperatures, thus requiring a fossil-fuel furnace as backup.
“That’s old news,” said Tobie Stanger, senior home and appliances writer for Consumer Reports. “There are new heat pumps designed for cold weather that allow them to go to five degrees effectively,” she said, adding that they’re widely used in Nordic and European countries. A Consumer Reports analysis of the efficacy of heat pumps in cold climates found that “even amid bone-chilling cold” they use far less energy than other types of heating systems. According to Dave Lis, director of technology market transformation at Northeast Energy Efficiency Partnerships (NEEP), air-source heat pumps can work as a home’s main heating system in almost any climate.
Carrier sells 10 different heat pumps, with various energy capacities and price points, and plans to add models made by Viessmann, which already has a presence in the U.S. market. But beyond the company’s sustainable energy technology and product portfolio, “one of the reasons we acquired Viessmann was because of its experience in training dealers and installers and helping customers understand the benefits of its products,” said Milena Oliveira, Carrier’s chief marketing and communications officer.
Leveraging that knowledge, Carrier is providing its nationwide network of around 2,100 authorized dealers training and education programs, as well as advertising and promotional support, not only regarding heat pumps but also ancillary products, such as smart thermostats and energy storage batteries. “Home energy management is a huge component that we want to capitalize on,” Oliveira said, as dealers “shift their mindsets from selling products to selling solutions and components.”
Mark Prodan, the operations manager of M&M Plumbing and Heating, a Carrier dealership in the northern Michigan town of Indian River, said that M&M’s heat pump business grew by nearly 35% last year. “This year it will probably be up another 40% to 50%,” he said.
Prodan said that he typically has to educate customers about the energy efficiency and cost-effectiveness of heat pumps, as well as their environmental benefits. “There’s a general feeling that people want to go with a little bit cleaner energy, but once you educate them on what heat pumps can do, they’re usually very receptive,” he said.
Carrier on-site and remote training of M&M’s sales and service staff have helped, Prodan said. “They have a website with knowledge-based videos, calculators that show customers their cost savings and an app for our service guys that can scan a bar code to pull up information and manuals.”
Getting tax credits and rebates while they last
Between now and the end of 2032, homeowners can get a 30% federal tax credit for the purchase and installation of Energy Star-certified air-source heat pumps — from Carrier and other brands — up to $2,000 annually. That includes any related insulation, ducting, mini-splits and electricity upgrades.
Many states and local utilities offer additional financial incentives, some tied to income levels. Connecticut, for instance, offers a rebate of up to $15,000 for qualifying heat pumps; New York State issues rebates through utility companies that can amount to between $8,000 and $12,000; Maine offers between $4,000 and $8,000. The Energy Star website features a “rebate finder” for obtaining information by zip code.
The cost of installing a heat pump system — depending on the brand, size, where you live and complexity of the job — can be upward of $20,000. Consumer Reports member surveys found that the overall median price paid for the purchase and installation of a ducted heat pump between 2018 and 2023 was $8,348. Mini-splits can range from $2,000 to $6,000 per unit, plus installation.
Besides rebates and tax credits, heat pumps can generate savings by eliminating the cost of fossil fuels, even when factoring in the price of electricity. Rewiring America calculated that homeowners switching from inefficient HVAC systems that run on fuel oil, propane or traditional electric resistance (like baseboard heat or electric furnaces) can save around $1,000 per year.
For 2023, Carrier reported sales of $22.1 billion, up 8% from $20.4 billion in 2022. Its guidance for 2024 projected sales growing to $26.5 billion. The stock is up 30% over the past year, though it is stalled in 2024.
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“This is a big year for us as a company,” Gitlin said in a recent call with analysts. “We will start realizing the tremendous benefits from the combination of Viessmann and as a sustainability-focused, higher growth, pure-play company.”
“When I see companies making big changes to their [product] portfolio and divestitures, that puts a premium on management knowhow and capability,” said Deane Dray of RBC Capital Markets. “I like how they’re doing it,” he said. “The heat pump [focus] does not just make economic sense, but the impact on its carbon footprint is a good part of the story as well.”
Carrier is targeting net-zero GHG emissions in its own operations by 2030 and across its value chain by 2050. The recent stock retreat, Dray says, doesn’t concern him and over the longer term, he anticipates higher margins, more services and more aftermarket revenues. “It’s all lining up nicely,” he said.
Xpeng has officially launched its new G7 electric SUV in China, entering the fiercely competitive electric crossover market with a starting price of just 195,800 yuan ($27,325 USD). The G7 is positioned squarely to compete with the Tesla Model Y and the newly unveiled Xiaomi YU7.
It is priced significantly more aggressively than the YU7, which shook up the industry just last week.
The G7, Xpeng’s seventh model, offers an attractive balance of performance, technology, and value, with an emphasis on the latter.
Like Lei Jun with the launch of the YU7 last week, He Xiaopeng was not shy about positioning the G7 against the best-selling Tesla Model Y.
He compared the specs and pricing with the leading premium crossover. Like Jun, he brought up Tesla’s comparison challenge against the new Model Y:
The G7 is powered by a single rear-wheel-drive electric motor producing 292 horsepower (218 kW), it achieves a 0-100 km/h acceleration in 6.5 seconds. Impressively, the G7 can cover between 602 km and 702 km (374-436 miles) based on China’s generous CLTC standard, depending on the battery option and wheel size.
Two battery options are available, both using lithium iron phosphate (LFP) technology: a 68.5 kWh and a larger 80.8 kWh pack. With Xpeng’s advanced 5C charging technology, drivers can recharge up to 436 km (271 miles) of range in just 10 minutes.
Additionally, the G7 supports Vehicle-to-Load (V2L) functionality, providing up to 6 kW of external power, like the YU7 announced last week.
On the design front, the Xpeng G7 adopts the company’s second-generation “X Face” styling, featuring sleek running lights connected by a continuous LED strip, a closed front end for aerodynamic efficiency, and a distinctive “Star Ring” rear taillight design. Xpeng emphasizes the vehicle’s aerodynamics with a drag coefficient of just 0.238 Cd, slightly higher than the Model Y’s 0.230 Cd.
Inside, the G7 embraces minimalism, replacing conventional buttons with a large 15.6-inch central touchscreen powered by Qualcomm’s Snapdragon 8295 chipset. A standout interior feature is the expansive 87-inch augmented reality head-up display (AR-HUD), developed in collaboration with Huawei, that significantly enhances navigation and driving assistance.
Practicality is emphasized with ample cargo space: an 819-liter trunk that expands to 2,277 liters with the seats folded, plus an additional 120-liter compartment beneath the trunk floor and a modest 42-liter front trunk (frunk).
Xpeng is touting an adaptive AI-driven suspension system that actively adjusts to road conditions within milliseconds, allegedly surpassing comfort benchmarks set by the Mercedes-Benz GLE and Tesla Model Y. Cabin quietness also ranks high on Xpeng’s list of priorities.
Luxury and convenience features include dual 50W wireless phone chargers, a 20-speaker premium audio system, and a panoramic sunroof. Passengers in the second row enjoy premium touches like an 8-inch control screen, individual climate settings, a foldable table, and wireless charging.
The top-tier “Ultra” variant employs two proprietary Turing AI chips capable of delivering a massive 2,250 TOPS of computing power, enabling advanced Level 3 autonomous driving capabilities set to become active via an OTA update by December 2025, pending regulatory approval. Standard versions use dual Nvidia Orin-X chips with 508 TOPS.
The Xpeng G7 starts at 195,800 yuan ($27,325 USD) for the base “Max” variant with 602 km of range, stepping up to 205,800 yuan ($28,720 USD) for the longer-range “Max” (702 km) and topping out at 225,800 yuan ($31,510 USD) for the high-end “Ultra” trim.
Customers ordering the G7 Ultra before July 31 will receive complimentary upgrades including Nappa leather and power door handles.
G7 quickly demonstrated its popularity by securing 10,000 pre-orders in just 46 minutes.
Electrek’s Take
It’s not 200,000 orders within 3 minutes like the YU7, but Xpeng doesn’t have the brand power that Xiaomi has.
Nonetheless, it is pretty impressive.
The price is insane. The specs are competitive with the Model Y, which starts at 263,500 yuan and ranges up to 313,500 yuan ($36,770 – 43,750 USD), but the price starts at about $10,000 USD less.
Between this, the YU7 last week, and a few more models launching this month, the premium crossover segment is about to get crowded in China.
I think the Model Y is in serious trouble in China. We are about to see how it fares with real competition.
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Tesla’s humanoid robot program, Optimus, is reportedly in disarray amid the departure of the senior vice president in charge, Milan Kovac.
Production has been delayed due to a new redesign, as the robot has yet to prove useful in Tesla’s factories.
Elon Musk has previously set a goal for Tesla to produce 5,000 to 10,000 Optimus humanoid robots this year.
The goal has reportedly been delayed as sources within the Chinese supply chain report Tesla informed suppliers of a 2-month halt on orders.
AI Invest first reported the news, and The Information later corroborated the report:
Two supplier sources said Tesla has not explicitly stated it will reduce robot parts orders but will wait until the Optimus design adjustments are completed before finalizing a new mass production plan and resuming procurement. The adjustments may take two months. Musk recently stated on social media that the new version of Optimus has seen significant improvements over the second-generation Optimus unveiled in 2023 and now includes voice interaction powered by Grok.
The news came after we learned that Milan Kovac, the head of the Optimus program left Tesla last month, just months after being promoted to senior vice-president by Musk.
The new reports confirm that Ashok Elluswamy, who was elevated to senior vice-president in charge of self-driving at the same time as Kovac, is taking over responsabilities.
AI Invest reported some concerns from Tesla about Optimus that reportedly trickled down to Chinese suppliers:
According to Tesla’s feedback to suppliers, Optimus still faces hardware challenges, including overheating in some joint motors, low load capacity in dexterous hands, short lifespan of transmission components, and limited battery life. Tesla is currently evaluating samples from multiple dexterous hand suppliers, testing at least three different technical approaches. On the software side, Tesla may use more synthetic data to train the robot model, improving Optimus’ autonomous operation capabilities and success rate in performing complex tasks.
According to the report, Tesla had secured parts to build over 1,000 Optimus robots earlier this year and built quite a few, but they are currently only used “for moving batteries in Tesla’s battery workshops, with efficiency less than half that of human workers.”
The redesign is expected to delay plans by at least two months and could push many of Tesla’s goals.
However, Tesla is expected to still move ahead with the prgroam and it is likely to unveil the new generation of Optimus robots at its shareholders meeting this year.
Electrek’s Take
As I previously stated, I’m actually quite hyped for humanoid robots, but I don’t think they will be nearly as big as Musk claims and I simply don’t see Tesla having a significant advantage over the competition, which is significant.
Companies like Unitree are already selling robots, Figure has made impressive progress and poached from Tesla, then there’s Boston Dynamics and dozens more.
Kovac leaving just as Tesla is supposed to ramp-up production to 50,000 units next and make this a “multi-trillion-dollar” product is a red flag.The engineer would have certainly received sweet stock option packages when he was elevated to SVP and would have likely made a fortune if he would have been able to deliver on Musk’s goals.
But I think the real product at Tesla now is the stock – hence why they reportedly plan to unveil the next generation of the robot at the shareholders meeting and have it do another shady demostration, like it did at the ‘We, Robot’ event where the robots were remotely controlled by humans.
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Honda is stepping up its electric scooter game with the launch of its second electric model for Europe, the CUV e:. Following Honda’s previous debut of the EM1 e:, a compact, city-focused moped, the CUV e: brings more power, more range, and more real-world usability to riders who want a practical electric alternative to a 125cc scooter.
Now finally ready for the spotlight, the CUV e: is built on an underbone-style frame and powered by a 6 kW side-mounted electric motor producing 22 Nm of torque. That puts it squarely in the 125cc-equivalent category, allowing it to reach a top speed of 83 km/h (52 mph).
It’s not built for the highway, but rather for urban and suburban riders who want to achieve speeds seen on the fastest of urban roads and keep up with just about any traffic in the city. For that role, it looks like a solid performer – more than capable of keeping up with city traffic or carrying a second passenger.
One of the most useful features, especially for urban residents and apartment dwellers, is its use of Honda’s Mobile Power Pack e: swappable battery system. The scooter carries two of these Gogoro-style removable battery units, each rated at 50 V and 1.3 kWh. Combined, they offer over 70 km (43 miles) of WMTC-rated range. Compared to the Honda EM1 e:’s single Mobile Power Pack battery, the dual batteries of the CUV e: give Honda the chance to pull twice as much power or offer twice the range.
Honda’s swappable battery standard is designed for portability and long life, with each pack weighing around 10 kg (22 lb) and rated for 2,500 full charge cycles. Honda has been slowly building a swappable battery ecosystem, and the CUV e: is clearly meant to be part of that larger infrastructure play.
Charging of the batteries is designed to be done easily off-board, either at home or at a battery station (where available). A full charge from 0 to 100% takes about six hours per pack, but Honda says 75% can be reached in just three hours. While fast charging would be nice, the swappable format means riders can keep an extra pair charged and ready if necessary, eliminating downtime altogether.
Honda didn’t skimp on features, either. The CUV e: offers three ride modes (Sport, Standard, and Econ), plus Reverse Assist for easier maneuvering. It includes a fairly spacious flat floorboard, under-seat storage, LED lighting, a USB-C port, and keyless ignition. Buyers can choose between a five-inch color TFT display or an upgraded seven-inch “RoadSync Duo” screen, which supports turn-by-turn navigation, music control, Bluetooth phone integration, and EV-specific ride data.
Positioned as a mid-range electric scooter, the CUV e: fills the space between low-speed mopeds and larger, premium e-motorcycles. It’s a key piece in Honda’s broader electrification strategy, which aims to introduce 10 or more electric motorcycle models globally by 2025 and reach full carbon neutrality in its motorcycle division by the 2040s.
With anticipated pricing starting at around €4,000 (approximately US $4,300), the CUV e: is expected to roll out in Europe first, with other global markets potentially following. Its combination of practical range, moderate speed, high build quality, and swappable batteries could make it an appealing option in cities where electric two-wheelers are on the rise.
If the EM1 e: was Honda dipping a toe into the electric waters, the CUV e: feels like a confident step forward. It’s not flashy, but it’s functional, well-designed, and undeniably useful, which is exactly the kind of machine that could help electric scooters go mainstream.
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