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0:55

Earlier

0:59

this year, Patrick and I went down to the auto show in

1:01

New York City. We do this

1:03

every year. But this year, there was something different. From

1:06

where it started to where it is now, I'm seeing electric everywhere.

1:09

I'm seeing EVs everywhere. Ford's

1:11

stall was all about its EVs, complete with an educational

1:13

video. And as

1:15

Inga starts her Saturday morning, she

1:18

knows exactly how much charge

1:20

her Mustang Mach-E has. And a test track. Whole

1:23

families were spilling out of the Mach-E after taking a spin.

1:26

They looked sort of dazed, like they were

1:28

getting off a roller coaster ride.

1:30

I love it. Did you like it? Yes, that

1:32

was so much fun. You want to go

1:34

zero to 16 in three seconds? I want to do that. That was so

1:36

fun. Ford, GM,

1:38

Hyundai, Volkswagen,

1:39

all were showing their latest, coolest,

1:41

most exciting EVs. I

1:43

used to come just to look at the cars, not

1:45

to see the cars. But now I'm here to see the cars. Ten

1:48

years ago, it did not look like this. The hype

1:50

and sizzle of the Ford Mustang Mach-E was a huge hit. And

1:53

now, it's a big deal. It's

1:55

a big deal for the whole world. It's

1:57

a big deal for the whole world. It's a

1:59

big deal for the whole world.

1:59

around EVs was practically non-existent.

2:03

But more than that, EV sales made up

2:05

a tiny percentage of the market, so there would

2:07

have been almost nothing to show. It's definitely

2:09

a big change. So the car companies

2:11

now, clearly all in on EVs.

2:14

There were other booths too, energy utilities,

2:17

charging companies, and even the state of New York

2:19

had a booth, all focused on the sky-high

2:21

possibilities of electric. But

2:25

the consumers,

2:26

they brought us back down to earth. Where

2:29

I am is I'm still more comfortable with

2:31

a hybrid. We're not much of EV people. Oh

2:33

yeah, strictly gas. Sorry about that,

2:35

everybody. The big

2:36

questions I think would be, how do you actually,

2:39

you know, fit this into your daily life, right?

2:41

Charging, charging at home, going to charging

2:43

stations. They're nice, but

2:45

are they economical? And then what

2:48

kind of increased costs are we really looking

2:50

at, right? So electric costs,

2:52

right? Bills increasing. What types

2:54

of bills would increase with that?

2:57

So yeah, still lots of questions,

2:59

concerns, and this is pretty representative of

3:02

Americans in general. Turns out

3:04

the electric future in the US is still very much

3:06

that, the future. But if

3:08

you went to another car show that happened around

3:10

the same time this year, it was a different story.

3:14

The majority of cars sold in Shanghai

3:16

are now electric, and that's reflected

3:18

in the city's motor show. Local firms

3:20

now lead in key segments. They've

3:23

been helped by the switch to electric vehicles

3:26

where Chinese firms now dominate.

3:28

In the world's largest market for electric

3:30

vehicles, this is a glimpse at the future.

3:34

In China, nearly 30% of all car

3:36

sales are EVs. In the US, it's

3:38

just 7%. Another way to say

3:40

that, China is kicking the US's ass

3:42

when it comes to EV adoption, a crucial

3:45

step in fighting climate change.

3:46

How did this happen?

3:49

One big reason is that China had a hand.

3:52

From a company with cutting edge EV technology,

3:55

a company that shared that tech with Chinese

3:57

car makers and suppliers, a company

3:59

that set the goal.

3:59

standard for how good EVs could be

4:02

and whipped up demand for them. Yeah,

4:05

we're talking about Tesla.

4:10

Five years ago, China needed Tesla

4:12

to launch its own EV revolution, and

4:15

Tesla needed China to make money. The

4:17

company still needs that. China is the largest

4:20

market for EV sales in the world, but

4:22

the country has essentially outgrown Tesla.

4:25

Homegrown automakers have a slew of great models

4:28

that compete with Teslas, which means

4:30

Chinese consumers have a lot of great choices.

4:33

American EV buyers? Not so much,

4:35

despite the fact that Tesla was born in the US

4:38

and existed here for years longer.

4:40

So how did China use Tesla to

4:42

spark an EV revolution, and how

4:44

did the US squander its advantage? This

4:49

is Land of the Giants.

4:53

If you want to drive an EV, Shanghai is a great

4:55

place to be We had to get an EV.

4:58

And that was my first ever EV,

5:00

so that was a huge decision.

5:02

Just ask James Schilling. He's from the

5:04

United Kingdom but has lived in China for a few

5:06

years. He never felt the need to own a car

5:09

until COVID lockdowns hit.

5:11

At the time, we were experiencing China's

5:14

zero tolerance, and we

5:16

had no way of getting out of the country.

5:19

So we started to look at how could we

5:21

still enjoy our lives and do

5:23

things.

5:24

A car meant a slice of freedom for him and his

5:26

wife, and the government gave them some obvious

5:29

reasons to break up with gasoline.

5:31

In order to buy

5:32

an internal combustion engine vehicle, in Shanghai,

5:35

you need to purchase the registration

5:38

plate. And they are very

5:40

expensive. They're about $10,000 just for the plate. Whereas

5:45

the EV vehicles, they are incentivized

5:47

by the government and they are

5:49

free.

5:59

public charging stations. By

6:02

comparison, there are about half as many

6:04

in the entire United States.

6:06

It was a no-brainer for us. Schilling

6:08

had a ton of options, too. At first

6:10

he assumed he'd choose a familiar brand, like a Tesla

6:13

or maybe a Mercedes. And then we started

6:15

to open our eyes to Chinese EVs.

6:18

He ended up buying a NIO EC6,

6:20

a stylish crossover coupe. It's in the upper

6:22

tier of car brands, like BMW or Audi.

6:25

But NIO does luxury a bit differently. There's

6:28

a concierge service that comes to you for a lot

6:30

of maintenance needs.

6:31

And then NIO offers something truly next

6:34

level. So battery swapping is

6:36

probably their unique selling point. It

6:38

was one of the things that sold us. That's

6:41

right, battery swapping. Here's

6:43

how it works. Essentially, you

6:45

arrive at a battery swapping station. Okay,

6:48

I press a few buttons on my operating system, and

6:50

then suddenly it will reverse

6:52

into the battery swapping station. And

6:55

then it will start swapping the battery

6:58

with no human other than

7:00

yourself. In case

7:01

you didn't get that, instead of waiting

7:04

hours for a charge, you can just swap out

7:06

the entire battery. Full power.

7:09

Later, suckers.

7:12

And this is the perfect symbol for where China's EV

7:14

brands are these days, offering great

7:16

cars with science fiction level convenience

7:19

to buyers today.

7:21

When

7:21

we purchased our NIO, I

7:23

was really worried that the quality would not be

7:25

up to par. I was in the showroom

7:28

lying down, checking under the

7:30

vehicle to see what problems

7:32

I could find. I was running my hand

7:34

across the entire body, and

7:36

I just couldn't find anything.

7:39

I compared it against the Mercedes.

7:42

And I just felt like there's

7:45

no difference. But this electric

7:47

paradise didn't really exist a few years

7:49

ago. Chinese brands were struggling to

7:51

make cars anyone cared about or trusted.

7:54

EV sales were growing, but nowhere near where

7:56

they are today.

7:57

And then Tesla arrived. That

8:04

cheering you hear is for Elon Musk. He's

8:07

dancing on stage at the opening of Tesla's Chinese

8:09

factory, Giga Shanghai, in 2020.

8:12

His dance moves are a little awkward, but

8:14

if you'd pulled off what Tesla just had, you'd

8:17

be dancing too. I

8:18

really want to thank the government officials

8:20

that have been really helpful in making this

8:23

happen. You guys achieved an incredible

8:25

outcome.

8:26

In 2018, the company became the first

8:29

ever foreign car maker to be invited to set

8:31

up a factory in China without having

8:33

to answer to a Chinese partner.

8:35

Car makers with long-standing relationships with China

8:38

have been thirsting over an opportunity like this

8:40

for years.

8:41

Here we are with this kick-ass factory,

8:43

and it looks great. And

8:46

you can get this done. What else can we do?

8:48

It's going to be a very exciting future.

8:53

For decades, China required foreign

8:55

car makers to partner with local or state-owned

8:57

companies.

8:58

These joint ventures were intended to help China

9:01

develop its domestic auto industry.

9:03

But in 2018, Shanghai, with approval

9:05

from national authorities, loosened up the

9:07

usual rules for the first time.

9:09

I think the Shanghai government believed

9:12

if it allowed Tesla to make electric cars

9:14

in China, there would be a few

9:17

benefits. This is Crystal Chang,

9:19

a lecturer at UC Berkeley. One

9:22

is that it would bring down the cost

9:24

of Tesla EVs in China. China

9:27

wanted cheaper but higher-quality EVs

9:29

to sell to consumers. If the cars were made

9:32

in the country, the price would presumably drop.

9:34

Second, they hope

9:36

that bringing in this foreign car maker, even though

9:38

it was going to be a wholly foreign-owned subsidiary,

9:41

that there would be nonetheless

9:43

a technological diffusion, right?

9:46

That people working in those factories, the supply

9:48

chain would become more sophisticated around

9:51

the Tesla factory, that there would be some learning

9:54

for the entire industry in China. And

9:56

the third reason? Chang believes the Shanghai government

9:58

gave Tesla unprecedented freedom. This

10:01

might surprise a lot of people who think China has

10:03

a state run economy is that

10:05

they knew it would prompt competition. Right.

10:08

That the Chinese carmakers would now

10:10

have to compete with the domestically

10:13

produced Tesla and that

10:15

that would be an extra incentive to make

10:18

better EVs to bring down the cost,

10:20

et cetera.

10:21

Shanghai officials were sure they'd be getting a whole

10:23

slew of benefits out of the Tesla agreement. And

10:26

Tesla had evidence even early on that it was getting

10:28

a good deal, too.

10:29

The government gave them a prime

10:31

piece of land and

10:34

had a lot of Chinese banks give them

10:36

below market rates on loans, a lot of

10:38

loans, like nearly two billion dollars worth

10:40

of loans to build this factory. So

10:43

there's a lot of preferential treatment.

10:45

Despite this, there was concern among Tesla

10:47

investors when Musk first announced plans

10:49

to build a factory in Shanghai. Many

10:52

were skeptical about the shift to churner,

10:54

the inherent risks. And at the time,

10:57

it was you that must in particular is

10:59

balancing too many things from

11:02

production perspective.

11:03

This is Dan Ives, an analyst at Wedbush

11:05

Securities and a long term Tesla investor.

11:08

Back then, Tesla was not the

11:10

runaway success it is today. It was

11:12

still hemorrhaging money, struggling to make and deliver

11:14

cars, and investors were losing patience.

11:17

Moving across the world seemed like an insane

11:19

bet to some,

11:20

but not everyone. We've always

11:22

viewed moving to China,

11:25

doubling down, making

11:27

that the production hub as probably

11:30

the most strategic poker move

11:33

that Musk has ever made. I mean,

11:35

I viewed it no different than Patriot

11:37

drafting Brady. Yankees

11:40

getting jitter in terms

11:42

of what they did here with China.

11:44

Here's what he means by that. Early

11:47

Tesla leapt forward every time it opened

11:49

or retooled the new facility. But when Giga

11:51

Shanghai kicked into high gear in 2020,

11:54

it took things to a whole new level. It

11:56

unlocks something Tesla never had before,

11:58

massive volume.

11:59

Giga Shanghai was huge, about

12:02

twice as big as Fremont, which meant

12:04

Tesla could make a lot more cars and sell them to

12:06

a lot more buyers all around the world. But

12:09

getting close to the Chinese consumer was the most

12:12

lucrative part of the deal. Once Giga

12:14

Shanghai was delivering vehicles, Tesla sales

12:16

shot up. Within one year, sales had nearly

12:18

doubled, and that unlocked something

12:20

huge for the company, yearly profits.

12:23

The hearts and lungs of the Tesla

12:26

growth story are in China. Because

12:29

of the scale

12:29

and scope of Giga Shanghai, because

12:32

of the logistics. Every car

12:35

Tesla built in Shanghai made a significantly

12:37

higher profit than one made in Fremont.

12:40

We asked to meet, it's 25 to 30% more

12:42

profitable

12:45

for every car they settle in China.

12:47

So yeah, China's been really good for

12:50

Tesla,

12:50

but how did the deal shake out for China?

12:53

The Chinese government had already been offering

12:55

a lot of incentives. There's a huge subsidy

12:58

to consumers of electric cars that

13:00

existed prior to Tesla coming, but

13:03

it hadn't really taken off in

13:06

a big way. Then Tesla showed

13:08

up with cars that people actually wanted

13:10

to buy. You know, the year on year growth

13:12

in the last four years has really been

13:15

astonishing.

13:16

The growth wasn't all Tesla. Even GM,

13:19

partnered with a Chinese company, is now selling

13:21

popular EVs in the country. But Chang

13:23

and others point to the fact that just as

13:26

the Chinese government had hoped, Tesla

13:28

kickstarted competition there.

13:30

It's called the catfish effect. When a large

13:32

fish forces its smaller competitors to get

13:34

stronger in order to keep up, which

13:36

they have. And that has been world changing.

13:39

China has now become the

13:41

world's largest exporter of cars for

13:43

the very first time. It has surpassed

13:45

Japan as the world's largest car

13:48

exporter and a significant number

13:50

of those are EVs.

13:52

The US, not even in the top

13:54

three.

13:57

America has fallen behind in a lot of ways,

13:59

despite being the only one.

13:59

the birthplace of the company that helped launch China's

14:02

EV industry to success.

14:04

So what happened? We

14:07

should be under no illusion, for example, about

14:09

why China has been moving

14:11

so quickly and aggressively

14:14

into the EV space. They want to

14:16

capture the EV market. They want to be a step

14:18

ahead. In some ways, they've gained an

14:20

advantage by sprinting into it. But I believe

14:23

at the end of the day,

14:24

America is poised to win that

14:26

competition. But can we actually

14:28

win that competition?

14:30

That's after the break.

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I'm Josh Muccio, host of The

15:41

Pitch from Vox Media. People

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15:57

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15:59

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16:07

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none of this is staged. Each episode

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16:29

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episodes drop on Wednesdays. Follow

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The Pitch for free wherever you listen.

16:47

And let me tell you that EV revolution is happening with

16:49

or without us. It's definitely happening around

16:51

the world. The question is, will it be led by,

16:53

I don't know, China or will it be led

16:55

by the United States? That's why we have to make these

16:57

investments.

16:59

US Secretary of Transportation Pete

17:01

Buttigieg has made it clear that he believes

17:03

the future of cars is electric. But

17:05

the US spun its wheels on EVs for

17:07

years. Not his fault, of course. But

17:10

now it's on him and his boss, the president,

17:12

to figure out how to catch up. So

17:14

I called him up and I put this to him first.

17:17

Lots of countries are lapping the US on EV

17:19

adoption. 80% of new cars

17:21

sold in Norway are EVs. Germany

17:24

and France, also beating us. China,

17:26

well, you heard about all that. So I

17:29

asked Secretary Buttigieg this question.

17:32

Does this feel a little bit embarrassing? Well,

17:35

we certainly want to be in the lead

17:38

on anything we do as a country and EV

17:40

adoption shouldn't be an exception. On

17:43

the other hand, it's been extraordinary to see the

17:45

pace of EV adoption in the

17:47

US. I believe the share of EV sales

17:50

has tripled in a short amount of time.

17:53

We're, of course, taking a different approach than

17:55

Norway. We're certainly taking a different approach within

17:58

China and I think that's a good thing. But

18:00

we're working hard to make sure that we have not

18:02

just the incentive and the affordability

18:05

that's going to be needed for more

18:07

and more Americans to choose to go electric, but

18:10

also the infrastructure behind, and that's

18:12

been our focus. There's no question

18:14

in

18:15

my mind that the automotive

18:17

sector as a whole around the world in

18:19

the US is going electric. The question is how

18:22

to make sure that it happens at the pace that

18:24

it needs to happen, and that won't

18:26

take place unless we support it in the right way, which

18:29

is why we've had such a focus in terms

18:31

of our policies

18:32

and in terms of our funding as an administration

18:35

to make that a reality. Buttigieg

18:37

acknowledges though that the US is behind.

18:40

Well, I think every country has

18:42

a somewhat different approach, but it's

18:44

really revealing to see that there's

18:47

also a sense of urgency here, not

18:49

just in terms of doing the right thing for the environment,

18:52

but also as a matter of economic

18:54

security. I think we should be under no illusion,

18:56

for example, about why China

18:58

has been moving so quickly

19:01

and aggressively

19:02

into the EV space. They want to

19:04

capture the EV market. They want to be a step

19:07

ahead. In some ways, they've gained an

19:09

advantage by sprinting into it, but I believe

19:11

at the end of the day,

19:12

America is poised to win that

19:14

competition. Can you tell me

19:16

what makes you think we are poised to win this

19:19

race? Well, first of all, this

19:21

is the country that delivered the automotive

19:23

revolution in the first place. That's

19:26

no guarantee of future success, but it means

19:28

that

19:29

we have something in our bones

19:31

and maybe more relevantly in terms of our

19:33

skills when it comes to the workforce

19:36

and the business community that can really drive this.

19:38

Whether we're talking about the automotive sector in general,

19:40

or whether we're talking about players like Tesla,

19:43

most importantly, Tesla in terms

19:45

of the early stages of making

19:48

the EVs mainstream and demonstrating

19:50

that EVs did not necessarily

19:52

involve a trade-off with performance but could

19:54

actually be some of the best performing cars

19:57

on the road.

19:57

Secretary Buttigieg is right.

20:00

The US is the birthplace of Tesla, but

20:03

a whole other country used the company to rocket

20:05

to EV dominance. China. You

20:08

know, the US's greatest global rival?

20:11

What happened here? Andrew Hawkins

20:13

is going to help us out with that question and a few

20:15

more about the future of EVs in the US and

20:17

the future of Tesla.

20:19

Hawkins is transportation editor at The Verge.

20:21

I started with the big question. How

20:23

did we lose the advantage of having Tesla first?

20:27

So I think a couple of things. First of all, Tesla wasn't

20:29

really very successful for the vast

20:31

majority of its history until

20:34

the past few years. From the policymakers

20:37

perspective, they weren't sure whether or not it

20:39

was going to become the giant

20:41

that it eventually did. And

20:43

I think that that sort of reflected in

20:46

how the government kind of reacted

20:48

to the rise of Tesla. During

20:50

the Obama years, they had some, you

20:52

know, policies towards incentivizing

20:55

electric vehicle purchases.

20:56

There are few breakthroughs as promising for

20:58

increasing fuel efficiency and reducing our

21:01

dependence on oil as electric

21:03

vehicles. We've created incentives for

21:05

Americans who want them to

21:08

buy them.

21:08

But nothing really around providing meaningful assistance

21:11

towards the supply chain around

21:13

electric vehicles and batteries in particular.

21:16

And there was obviously emission standards as

21:18

well.

21:19

Then Trump was elected and he

21:21

relaxed a lot of those standards. We

21:23

have ended the war

21:26

on American energy and we have

21:28

ended the war on

21:31

beautiful, clean coal.

21:35

And seemed to imply that they were also going

21:37

to get rid of electric vehicle tax credits as

21:39

well. So that lack of consistency,

21:42

I think, was really kind

21:44

of influential in the auto

21:46

industry's broader kind of reluctance to

21:48

get into

21:49

the business of selling electric

21:51

vehicles. And I think that that contrasts

21:53

with China, which was a very consistent

21:56

national policy towards incentivizing

21:59

the electric vehicle sector.

21:59

and helping not only its domestic

22:02

homegrown companies to grow, but

22:04

also making sure that the companies that were coming

22:06

in, the foreign companies that were coming in like Tesla,

22:09

were doing so in a way that would benefit their

22:12

own sector.

22:13

What are some of the reasons we can't do

22:15

what China has already done so quickly?

22:17

So China

22:20

is a one-party country, the

22:22

Communist Party. We are a

22:24

two-party system, very different in

22:27

terms of the structure of its government authoritarian

22:29

regime, can impose a lot of directives

22:32

on its industrial sector, on

22:34

its commercial sectors.

22:35

China is cracking down on some of its largest

22:38

companies with regulatory stings wiping

22:40

hundreds of billions of dollars of their market

22:42

value.

22:43

And in the U.S., we have a very politically polarized

22:45

environment, and I think you're seeing

22:48

electric vehicles in particular becoming a very polarizing

22:51

subject as well. Joe Biden is waging

22:53

war in the U.S. auto industry with a series

22:55

of crippling mandates designed to force

22:58

Americans into expensive

23:01

electric cars. There's just not a bipartisan

23:03

consensus in a lot of ways.

23:08

So it's clearly a thorny subject,

23:11

this whole area, when we look at policy on

23:13

a state federal level. But what

23:16

really is the upshot of these weak policies,

23:18

and how has it impacted

23:21

the

23:21

auto industry?

23:23

I think it's given car companies, and

23:26

especially the gas-powered side of

23:28

their businesses, a much longer lease on life

23:30

than they probably deserved to

23:32

have. But as it stands now,

23:34

these companies are spending a lot of money, and

23:37

they are sort of saying the right things, I think, publicly

23:39

about how they intend to face

23:41

out gas-powered vehicles and shift to

23:43

electric.

23:43

We want to lead in EVs, full

23:46

stop. We're really starting to scale EVs.

23:48

We're number two in the U.S. But that

23:50

is being paid for almost exclusively

23:53

through the revenues that they get from

23:55

their gas-powered vehicles, since those are still the

23:57

dominant type of vehicle that people buy.

24:00

Clearly, one deterrent to EV sales

24:03

is the cost of the average EV is

24:05

still far more than what the

24:08

average American spends on a new car. So

24:11

how much of a deterrent is

24:13

cost to the adoption

24:15

rates? Yeah, I

24:16

think the cost of electric vehicles

24:18

is a huge deterrent to adoption. Most

24:21

of the electric vehicles that we've seen introduced

24:23

thus far are what I

24:25

would say are probably in the premium or luxury

24:27

segment as compared to China, which

24:30

has prioritized lower

24:32

cost, more affordable, more

24:34

mass market vehicles from the very beginning.

24:39

Part of the problem? The battery is the most

24:41

expensive part of an EV. The US

24:43

never invested in a way to make batteries here at

24:45

home, mines, factories, things like

24:48

that. Guess which country did? China. But

24:50

the US is now attempting to build out that

24:53

battery supply chain. And a lot

24:55

of car companies are now talking about making cheaper

24:57

EVs.

24:58

Would it have helped to have more

25:00

competition sooner? Why didn't

25:02

that happen? Yeah, I think it definitely

25:05

would have helped to have a lot more competition

25:08

sooner. And I think it would have probably

25:10

made it more difficult for Tesla

25:14

in particular to be so lax

25:16

about its prices and its vehicle

25:18

type offerings. Elon Musk has been talking

25:20

about a $25,000 electric vehicle for a very long time. Musk

25:24

has always been our dream from the beginning of the company.

25:26

I even like wrote a blog piece about it and has

25:29

yet to give us any indication

25:31

of when that's going to be coming around.

25:33

Secretary Buttigieg says we can actually

25:35

win this race. What do you think? Are

25:37

there signs we're getting on track? I think

25:39

that

25:39

there are some signs that we are going

25:41

to be at least competitive in this race. Thousands

25:44

of jobs and a new manufacturing

25:47

plant is coming to Kentucky marking the second

25:49

largest investment ever made

25:52

in the state.

25:52

More jobs are on the way to South

25:54

Carolina thanks to an investment in electric batteries.

25:57

So there's a new partnership bringing lithium

25:59

batteries.

25:59

right to our backyard. And

26:02

I think that he's right that you can't

26:04

count the US auto industry out

26:07

necessarily. It's interesting because

26:09

in a lot of ways when you hear politicians

26:11

talk about the auto industry, it's almost as if they're

26:13

talking about the US economy at large,

26:16

that the auto industry is somewhat of a stand-in

26:18

for the US economy because it is so important

26:21

in terms of jobs and revenue

26:23

and sort of what it means for our sort of national

26:26

spirit and like what we think of ourselves. There's

26:29

one thing that you can

26:29

take to the bank when

26:32

talking about Detroit is

26:34

that Detroit always comes back. Osama

26:38

bin Laden is dead and General

26:40

Motors is alive.

26:41

The

26:45

US has more than nostalgia and stump speeches

26:47

to fuel the future. We've got a meaty

26:49

piece of legislation passed just last

26:51

year. It's called the Inflation Reduction

26:53

Act. All kinds of stuff in this thing, including

26:56

a bunch of provisions that promote EVs. Like

26:58

incentives for companies to use American

27:00

source batteries and to build EVs here in

27:02

the US. Signs point to all this making

27:04

a positive impact so far.

27:06

What does a strong EV market in the United

27:09

States mean for Tesla?

27:12

I think it means a lot more competition

27:14

and hopefully with

27:16

a sort of more diverse market share, Tesla

27:19

would need to evolve and change. And

27:22

I think it would be really interesting to see how

27:24

that happens beyond just price cuts. I

27:27

think we're really seeing that rise in competition

27:29

and the sort of the diversification in the market

27:31

share have much effect on the company's

27:34

strategies and the way that it's

27:37

planning for its future. I think

27:39

it'll be interesting to see how a

27:41

broader, more diverse electric

27:44

vehicle market or even just an EV

27:46

only auto sector way

27:49

further out into the future. What would

27:51

Tesla look like in that kind of future in that kind of market

27:54

is kind of interesting to think about.

27:56

Here's the thing. We already kind of know

27:58

what that would look like because it's happening in

28:01

China. So Tesla's under fierce

28:03

competition there. Crystal Chang

28:05

from Berkeley again. They don't

28:07

sell well outside of the big cities. They're

28:10

still much more expensive than the Chinese ones.

28:13

So you don't see Teslas in second,

28:15

third tier cities or in rural areas,

28:17

right? Remember, James Schilling

28:19

passed over a Tesla for a Neo. Tesla

28:22

vehicles are looking dated

28:25

now. Chinese consumers have tons

28:27

of options. High end, low end, in

28:30

between. It's an arms race in

28:32

China. Investor Dan Ives. And

28:35

I think domestic competition

28:38

continues to probably be the biggest worry

28:40

for investors.

28:43

Tesla's market share has already fallen by

28:45

about a third in China. A bunch of tax

28:48

breaks are about to expire as well. All

28:50

of this is expected to eat into Tesla's profits.

28:53

But beyond the bottom line, these shifts

28:55

say something bigger about Tesla's future. The

28:58

company's Chinese adventure has been so successful

29:00

that the country doesn't really need it anymore. So

29:03

Tesla will just have to compete. To

29:05

stay relevant, to keep making money, it

29:07

will have to make cars people want to buy. That's

29:10

the case in China. And more competition

29:13

would be great for the U.S. as well, where

29:15

Tesla has dominated the market, such

29:17

as it is, for years. Where

29:19

Tesla essentially created the market.

29:22

Tesla's shockwave started with a ripple. A

29:25

couple of guys who wanted to make a fancy sports

29:27

car that didn't kill the climate. But the

29:29

company ended up being so much more than that.

29:32

It pushed an entire industry to do things

29:34

differently. From tech, to batteries,

29:36

to performance, to resetting what a car brand

29:38

could even be. Tesla shifted

29:41

the way the world thought about electric cars.

29:44

Now, after catalyzing so much change,

29:47

the company itself is at a turning point. The

29:49

competition has arrived around the

29:51

world.

29:52

And increasingly here at home.

29:54

So maybe some tougher days ahead for Tesla.

29:57

But better days, too. For

29:59

us. because more choice in EVs

30:02

means better EVs to choose from. Good

30:04

news for the climate too. While

30:07

EVs can't solve our climate emergency

30:09

on their own, they can certainly help a

30:11

lot. And making the world a

30:13

better place. Isn't that what

30:15

Elon Musk and Tesla have been promising

30:18

all along?

30:34

This episode included clips from Deutsche

30:36

Vela, CNBC, The Wall Street

30:39

Journal, MSNBC, C-SPAN,

30:41

CNN, Yahoo, Reuters, Wave

30:44

News, WSAZ, and WCNC.

30:47

Land of the Giants, the Tesla

30:49

shockwave, is a Vox Media podcast

30:51

network production in partnership with our

30:53

colleagues at The Verge. Special

30:56

thanks to Jillian Robbins, Art Chung,

30:58

Brandon Santos, and Darien Meuka.

31:01

This episode was produced by Charlotte Silver,

31:03

who's also our seasons producer. Zach

31:06

Mack is our showrunner and senior producer.

31:08

Jolie Meyers is our editor. Claire

31:10

Cronin is our fact checker. Brendan

31:12

McFarland mixed and scored this episode.

31:14

Andrew Hawkins is transportation editor

31:17

at The Verge. Nishat Kuruwa is our

31:19

executive producer. I'm Tamara Warren.

31:21

And I'm Patrick George. Thanks for listening to our

31:24

season. If you like this episode, give us a follow

31:26

and tell a friend.

31:29

Bye.