The United States Versus China: Tesla, BYD and the Trump Follies
Photograph Source: Frank Schwichtenberg – CC BY-SA 4.0
Once the darling of the left for championing electric vehicles, even with a hefty $44,000-plus sticker price on a range of best-selling “S3XY” models, Tesla CEO Elon Musk was regularly pilloried by the right for his presumed eco-friendly stance and generous government loans. Back then, the Chinese carmaker BYD was barely a twinkle in Warren Buffet’s investment eye, but now tops Tesla at over $100 billion in annual sales thanks to lower prices, faster charging times, and Musk’s far-right political conversion. As consumers scramble to keep pace in a fast-changing and uncertain world, the fight for motor supremacy ramps up – more than the increased market share of 100 million cars sold each year is at stake.
Tesla Motors began in 2003 in California, becoming Tesla Inc. in 2010 with the largest-ever initial public offering in auto-making history and in 2017 the highest-valued American carmaker at $50 billion, despite building only 76,000 cars the previous year (compared to GM’s 7.5 million and Ford’s 6.4 million). The brave new electric world belonged to its brash young CEO Musk, who boasted, “When Henry Ford made cheap, reliable cars, people said, ‘Nah, what’s wrong with the horse?’ That was a huge bet he made, and it worked.” Musk promised a new world for a new millennium, propelled via electricity and magnetic induction rather than burnt gasoline and reciprocating pistons, planning to finance a clean green future for the masses via high-end sales, or so he claimed in his 2006 Master Plan. Today, 20% of new car sales are electric and increasing, not least because of Tesla’s pioneering push.
There is no comparison between an electric vehicle (EV) and a gasmobile. As calculated by Martin Eberhard, Tesla’s first CEO and one of five co-founders, an all-electric car can travel 110 miles using the equivalent energy in one gallon of gas. A no-brainer, without including the reduced fuel costs of electricity, minimal maintenance for a leaner, meaner electric engine, or the environmental benefit of no burnt hydrocarbons (e.g., octane).
Taking on the car industry is another story. Back when Ford took on the horse-drawn carriage, manure was the main bugaboo, piling up everywhere on our overcrowded streets. Smelly to be sure but minimal compared to today’s carbon-induced anthropomorphic global warming. In effect, one must take on the oil industry and all of Western civilization. “Drill, baby drill” means “Vroom, baby vroom” and the United States isn’t planning on braking.
EVs can slow the warming, but as the naysayers are keen to point out, if the electric grid runs on fossil fuels EVs will still warm the world and pollute the air, albeit in someone else’s backyard. The dirty grid argument is losing its lustre, however, as renewable energy sources continue to grow – 40% and counting. Likely crossing the 2 ºC (3.6 ºF) thresholdwithin two decades – in what the UN Intergovernmental Panel on Climate Change states “would pose large and escalating risks to human life as we know it” – global warming is still increasing, but at least one can buy an EV now for more than the eco-vibes if the price is right.
True, the same naysayers don’t believe in global warming, seemingly a MAGA win-win – clean streets and more domestic coal, oil, and gas – piped, trucked, and shipped to all corners of the globe from the number-one petroleum-producing nation ever. Oil not democracy made America great the moment it gushed from a Titusville, Pennsylvania, well in 1859, the original “liberation day.” Global warming may be an existential threat, but the United States has even more to lose from diminished market share and waning influence. Bottom lines matter more to American transactionalists than any downstream damage.
One would think today’s individualist would welcome the independence of making one’s own energy and keeping nature clean – solar power has doubled every three years over the last 12 years to 7%. No longer beholden to outside control, the everyday consumer can easily go it alone thanks to rooftop solar (e.g., 8 kW or 20 400-W panels), meeting all one’s energy needs with photovoltaic (PV) cells and a storage battery, while charging one’s car for free. But after more than a century of oil – safeguarded by the American military – 100 million barrels/day is under threat as demand suffers from growing electrification. No more easy oil profits or taxable revenue. EVs are leading the way to a cleaner future and the end of the US as we know it – on the road was never so liberating. No wonder the Trump administration rolled back EV support and tariffed solar up to 3,500% in a full-throttled fight against change.
There are always jitters as the old gives way to the new until one winner emerges – the heliocentric solar system, steam-powered looms, transistor switching. We are in the midst of even more radical change as gasmobiles lose out to EVs and oil to renewables, despite Trump’s vain attempts to turn back the clock to a presumed former glory via restrictive tariffs.* Seemingly onside with Trump’s great-making revisionism, Italian prime minister Giorgia Meloni tried to broaden the MAGA scope to “Make the West Great Again,” but as European Commission president Ursula von der Leyen noted, “The West as we knew it no longer exists.” What will emerge is still being worked out as the United States and China duke it out in a thoroughly modern economic spat for new-world supremacy.
For those who measure greatness in GDP, the US is tops at $28 trillion (26%), ahead of the EU $19 trillion (18%), and China $18 trillion (17%) according to the World Bank. But China is in the ascendancy, growing faster and boasting a trillion-dollar positive trade balance compared to the........
