In the world of automotive manufacturing, a close examination of the electric vehicle (EV) sector sheds light on the contrasting economic and political landscapes of the United States and China. This industry not only showcases technological innovation but also reflects the varying capabilities of governmental policies in nurturing “national champions.”
The automobile, often deemed the “machine that changed the world,” remains vital for its contribution to well-paid blue-collar jobs and economic prowess. Recently, the production and sales of electric vehicles have become a significant indicator of success for both countries.
Elon Musk, once hailed as a prime example of American entrepreneurial spirit, has faced a series of challenges with Tesla. Despite the backing of substantial state subsidies for Tesla’s Nevada factory, the company has been embroiled in allegations of fraud and technical setbacks. Compounding these issues is the fact that China’s electric vehicle market, led by companies like BYD (Build Your Dreams), has outpaced Tesla’s sales.
BYD’s rise to surpass Tesla in EV sales occurred amidst the political and economic dynamics of the Trump administration. Elon Musk’s prominent role as an advisor to former President Trump has drawn scrutiny, especially given the potential conflicts of interest with Tesla’s reliance on the Chinese market. This scenario highlights the complex interplay between political and economic elites in the United States.
The political landscape has significantly impacted Tesla’s fortunes, with international pushback leading to a decline in sales and a sharp drop in its share price. Meanwhile, BYD founder Wang Chuanfu continues to succeed, largely unnoticed outside China.
The difference in public personas between American and Chinese business leaders is notable. While Musk and Trump are known for their public presence, Wang and even Chinese President Xi Jinping exhibit a more technocratic and understated approach. This reflects broader cultural and systemic differences between the two nations.
China’s approach has fostered public confidence, evidenced by its remarkable reduction in poverty and relative political stability. In contrast, the United States grapples with political division and unrest. Technologically, BYD’s development of a battery charging in five minutes could further solidify its market position, especially as international sentiment shifts.
The disappearance and rehabilitation of Jack Ma, one of China’s most successful and prominent entrepreneurs, offers an instructive lesson in capitalist class management: pull your head in or risk decapitation.
Elon Musk faces a balancing act between supporting Trump’s nationalistic policies and maintaining Tesla’s lucrative connections with China. Security concerns related to Chinese EV technology add another layer of complexity to this scenario.
Many analysts speculate that the partnership between Trump and Musk may face challenges due to their differing interests and approaches. However, Trump has expressed admiration for Xi Jinping, suggesting a potential shift in strategy. The case of Jack Ma illustrates the Chinese model of managing entrepreneurial influence, emphasizing compliance over confrontation.
Original Story at www.lowyinstitute.org