US oil and car industries are getting the short end
January 28, 2023 Updated: January 31, 2023
Commentary
Since 2020, China’s electric vehicle (EV)
makers have been on a streak.
Other vehicle
manufacturers are starting to look nervously in their rearview mirrors, err … cameras,
and in some cases, sideviews. Some, such as Volvo, are even looking at their
stock and realizing that a Chinese competitor has already bought a controlling
share.
Is China’s growing EV
dominance an example of the so-called cooperation with China on global
challenges such as climate change? Does the Biden administration deserve to
ballyhoo it all as another shining example of U.S.–China cooperation?
No. Beijing is the
world’s worst polluter and an existential threat to democracy. It uses its weak
environmental regulations and lousy labor policies to outcompete U.S. car
manufacturers on price. Every dollar that China makes can be turned by Beijing
into military aggression and human rights abuse, up to and including genocide.
By allowing EV makers to
outsource production to China from the United States, Europe, Japan, South
Korea, and other allied countries, consumers in advanced democracies may be
getting cheaper cars now. Still, they will pay in the long run when China
monopolizes the supply chain.
The Chinese Communist
Party (CCP) could, for example, pressure the United States by stopping
the shipment of
vehicle batteries. Russia attempted something similar against Europe by
stopping the flow of natural gas shortly after the start of the Ukraine war.
Beijing had used such pressure before, when it stopped the shipment of rare
earth elements, necessary in a broad range of manufacturing, to Japan in 2010.
It didn’t work in either case, but Moscow’s belief that it had leverage because
of Europe’s gas dependence likely figured in Russian President Vladimir Putin’s
decision to invade Ukraine.
A second advantage handed
to China in the world’s switch from gas is that EV engines are simpler than the
gas and diesel engines they replace. Gone will be the comparative advantage
that higher-skilled engineers and workers in market democracies had.
“The switch to battery
means the motor is no longer a differentiator,” Alexander Klose, an officer at
a Chinese EV manufacturer, told Bloomberg. “It’s created a level
playing field.”
The article, published on
Jan. 25, had the headline, “The US Hasn’t Noticed That China-Made Cars Are
Taking Over the World.”
In 2021, Japan led in
passenger vehicle exports, Germany and China were neck-in-neck for second
place, and the United States and South Korea trailed behind.
Since 2020, as the EV
revolution hit, China is gaining fast. The output of all its competitors is
either stalling or, in the case of the United States, falling.
Japanese car companies
are slow out of the blocks to pure electric from hybrid vehicles. According
to Reuters on Jan. 23,
“Lapping them are Chinese firms, which appear best-positioned to keep their
pole position, both at home and internationally.”
On Jan. 24, The
Wall Street Journal reported
that Ford was in talks to sell one of its plants in Germany to BYD, China’s
biggest EV maker.
The tightest choke point
in the EV supply chain is battery manufacturing. BYD
has it covered. China manufactures 56
percent of
all EV batteries, and the CCP will put China’s EV makers first in line.
BYD outsold Tesla in 2022
and already sells electric cars and buses in Europe. Buying the Ford plant in
Germany “would give BYD a stronghold for further expansion on the continent,”
according to the Journal.
A third advantage to
Beijing from the world moving away from oil is that China has very little of
it. The United States has a lot, so the shift is particularly painful for
relative U.S. economic strength.
China’s defeat of
America’s oil and vehicle industries, after so many others have already gone,
will put downward pressure on good American jobs. Industrial cities will
atrophy more than they already have. Crime and drug use will rise. Governments
from the local to the national levels will lose tax revenue. Fewer dollars will
go to social and defense spending.
Into that power vacuum,
repeated in democracies around the world, the CCP will step.
According to a Jan. 24
article published by The Heritage Foundation, “China is engaged in an economic
war with democracies around the globe and America must stay energy-independent.
… If electric vehicles overtake the internal combustion engine, America should
not cede its energy independence to China or other unfriendly nations.”
This is the reality of
the cheap, shiny electric cars that make us feel great about saving the planet
in so much style that our neighbors shrink with envy. But that wilting won’t
stop at the neighbor’s fence. We will all diminish together as the CCP’s power
grows.
Our best defense is decoupling
from China, including when we buy an EV.
Views expressed in this article are the opinions of the author and
do not necessarily reflect the views of The Epoch Times.
https://www.theepochtimes.com/chinas-electric-vehicles-could-destroy-america_5014658.html
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