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Last Updated on: 14th August 2025, 11:26 am
Writing in the Detroit Free Press, Ethan Dodd began his most recent article with this doomsday prediction: “Chinese electric vehicles don’t just pose a market threat to Tesla. They could also be a weapon of war. When the history of the early 21st century is written, it will surely focus on the war for global supremacy between two great nations — China and the United States.”
As a device to get people to read what comes next, that’s pretty good. But when we dig into it a little deeper, we find he is not talking about a war that involves tanks and planes and boots on the ground. Instead, he is talking about economic competition, much like what the United States has been doing since 1945.
Dodd says electric cars will be a big part of that competition, and the Chinese have a clear lead. “It’s the most humbling thing I’ve ever seen,” Ford CEO Jim Farley told Walter Isaacson as he was gathering material for his biography of Elon Musk. “We are in a global competition with China, and if we lose this we do not have a future at Ford. We saw this coming for years. We knew that the Chinese would be the major player for us globally.”
For now, one of the biggest factors shielding American manufactures like Ford from Chinese competition is the belief in many parts of the US government that cars made in China would be little more than surveillance agents for the Chinese Communist Party. They feature sophisticated surveillance systems that rely on cameras and digital sensors that could allow them to capture data that could be passed on to the Chinese military.
This is not the first time the Free Press has published scary stories about Chinese technology. In 2023, it reported that the largest supplier of Lidar equipment to US vehicle makers is Hesai, and suggested the data captured by those sensors — some of which are installed on trucks used on US military bases — could be watched by Xi Jinping and his cronies when they are not busy running the country.
Banning Chinese-Made EVs
Based on similar fears, last year President Biden banned the import of any Chinese car that can be classified as a “connected vehicle,” meaning a car with the hardware to connect to the internet, allowing sharing of data with devices outside the vehicle, and whose software can be updated automatically from afar, like an iPhone.
In a statement, Biden’s commerce secretary Gina Raimondo said, “When foreign adversaries build software to make a vehicle, that means it can be used for surveillance, can be remotely controlled, which threatens the privacy and safety of Americans on the road. In an extreme situation, a foreign adversary could shut down or take control of all their vehicles operating in the United States all at the same time, causing crashes, blocking roads.”
Well, Gina, that is certainly an extreme scenario, but when your job involves protecting America, such over the top considerations cannot be entirely ignored, especially if you learned about the Trojan Horse in high school.
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Early Chinese cars were crappy, no doubt about it. The internet abounds with videos of them folding up like rice paper in crash tests. As Dodd explains, China bet big on joint ventures with American, German, and Japanese car companies, hoping they would provided the know-how to develop competitive Chinese-made products. But the cars based on internal combustion technology were never as good as what the foreign companies could produce.
The 2007 Turning Point
Then in 2007, the Chinese government appointed Wan Gang, a former Audi engineer who was not a member of the CCP, to be the country’s Minister of Science and Technology. In 2000, Wan had suggested that China could rise to superpower status only by ridding its dependence on foreign oil and developing a new type of vehicle powered by clean fuel.
China backed Wan’s idea by offering $230 billion in subsidies and introducing regulations that made it easier for car buyers to get license plates for EVs than conventional cars. Some will point to those subsidies as proof that China is cooking its books to favor its domestic manufacturers, but that simplistic analysis overlooks the hundreds of billions of dollars funneled to fossil fuel companies over the past 50 years.
In 2003, the same year that Tesla was founded, BYD founder Wang Chuanfu announced the cellphone battery manufacturer would become a car company. It then acquired a local carmaker to jumpstart its new business. BYD was successful, but not in a spectacular way.
Then in 2019, Tesla built its Gigafactory in Shanghai. “It took a Western automaker to bring the sizzle,” Tu Le, the founder of Sino Auto Insights in Detroit, told Dodd. “Chinese people love entrepreneurs.” After Tesla came ashore in Shanghai, the quality of Chinese EVs rose dramatically as other Chinese companies borrowed heavily from what Tesla was doing.
“I don’t think BYD happens without Tesla,” Tu Le said. The year Tesla started making cars in China, BYD was selling less than 500,000 “New Energy Vehicles,” which include both battery-powered and plug-in hybrids. By 2024, BYD was selling 4.3 million autos. While Tesla was once the market leader in China, today BYD boasts a 34% market share, compared to 6% for Tesla.
Politics Rears Its Ugly Head
In April, Republican senator Tom Cotton of Arkansas said, “China doesn’t innovate — it steals.” That is a gross oversimplification, and typical of the MAGA crowd that cannot think beyond the level of a tweet. Jim Farley was closer to the truth when he said, “They do things really well that we need to learn.” Tu Le was even more succinct. “The pupil is now the teacher,” he said.
The national security concerns remain, however. In May, the House Committee on Homeland Security announced that it would investigate BYD, requesting documents related to its “data security practices” and “operational footprint.” And the current failed administration is eviscerating EV-friendly policies wherever it finds them, which suggests electric cars will have a tough row to hoe, at least in the next few years.
The most trenchant part of Dodd’s piece in the Detroit Free Press is connecting what happened in Washington this week with the future of Chinese EVs in America. Dodd points out that America’s so-called president “continues to ignore a law passed by Congress — which the president himself signed — banning TikTok unless it is sold to an American company. [That law was passed because of concerns that TikTok, which is owned by a Chinese company, could be scooping up data on American citizens and sending it to China.]”
Dodd notes the Biden administration banned Nvidia from exporting certain high-end chips to China because of national security concerns. “But again, Trump ignored those concerns and cut a deal that allowed Nvidia to sell to China so long as the US government got a 15 percent cut of the revenue,” Dodd writes.
Then he drops this bomb:
“And so, it would be perfectly within character for Trump to decide that the threat of Chinese EVs is overblown. What if, as part of the trade deal that administration officials are currently negotiating with their Chinese counterparts, he allowed them to be sold on American shores? What if he ignored the same national security fears that have caused allies to ban them? The irony is that electric vehicles are indispensable to the industries America most needs if it is to revive manufacturing the way Trumps wants.”
Bill Russo, CEO of Automobility, a Shanghai-based strategy firm, told Dodd, “Batteries, rare earth magnets, AI-driven autonomy, and software-defined mobility — these are the engines of future economic and geopolitical power. Without a thriving EV industry at home, America risks forfeiting its leadership in the foundational technologies of the next industrial age.” According to Andrew Polk, who consults for some of the world’s largest companies and investors, “If we forced China to build its cars here as we did to Japan in the 1980s, within 10 years Americans would stop chanting ‘Buy American’ and realize ‘these cars are cheaper, they’re better, and you have to get one.’ ”
The Presidential Sharpie
It could all happen with the stroke of a presidential Sharpie pen. This transactional president would gleefully throw the American auto industry under the (battery-powered) bus if it would put money in his pocket. Never in history has a president so blatantly used his position for personal enrichment. If the domestic car companies are depending on him to protect them from Chinese competition, they may soon find themselves on the outside looking in.
A former colleague of mine liked to say, “When you lay down with dogs, you get up with fleas.” Another way to put it for the likes of Jim Farley, Mary Barra, Elon Musk, and other US auto execs is, “Be careful what you wish for. You just might get it.”
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