the beginning to ideals, the french republic, his long proclaimed. but just what is more than friends? in a full talk series, the big picture takes and in depth ness france insight episode one on ality sierra, and alter workers dispute in the us on the lines. washington struggled to become competitive in this local electric, comcast of the he, you and china flash over the subsidies, is the tv select to the coming the new geopolitical bible base is inside story, the

hello and welcome to the show. i'm sam is a then delivering affordable electric vehicles has become a priority for global call make cuz huge markets like b, e, you planned to outlaw the sale of traditional engines by 2035. the move to electric is a revolution for the old motive sensor. but like all revolutions, they can be a degree of chaos and unintended consequences to well, few might have imagine 20 years ago, china would become the world's top producer of the next generation of motor vehicles in the us, automotive work, as are on strike hotly for fear of big jump losses and pay costs in making a these, the us has to become more competitive to grab a bigger electric vehicle market share among the supporters, the us president to says the move to the light fixture, not main less pay to use re standards across the workplace as an entire

industries pushing up wages and strength of the benefits for everyone. that's why strong units are critical, they're growing the economy, growing it from the middle out, bottom up, not the top down. that's especially true as we transition to a clean energy future which are in the process of doing. i believe that transition should be fair and a win win. excuse me, for auto workers and auto companies. but you is worried about the threat to its comic has from cheaper impulse from china. it says it's chinese rivals have an unfair advantage from states subsidies. european officials say this distorts the market. they've launched a major inquiry that the commission is launching an empty subsidy investigation into electric vehicles coming from china. europe is open to competition, but not for race to the bottom. we must defend ourselves against unfair practices.

and some european analysts believe the move is intended to give the use also industry time to catch up with chinese rivals. by doing is condemning the decision saying the inquiry is simply protection isn't so you went on some dollars sir. what i want to emphasize is that the investigation measure that the european union implants to take this to protect its own industry in the name of fair competition. this is plates and protectionists behavior that will seriously disrupt and distort the global automotive industrial chain of supply chain, including the european union. it will have a negative impact on the china, you economy and trades relations. change. china is by far the biggest producer of electric vehicles. global sales have tripled in the past 3 years from nearly 3000000 in 2020 to 10000000 last year. a total of 14 percent of

all new cost sold were electric. that's up from 9 percent in 20. 21. 05 percent in 20. 20. well that means every 20 new calls sold last year. 3. well electric and china is the clear front runner once again with nearly 2 thirds of all global sales in europe. 21 percent of calls sold last year. what electric do us? it was just 8 percent, although most of china is electric vehicles stay on chinese roads. badging accounted scenario. 3rd of all global exports. the a light springing, i guess we have joining us from brussel. steven orlando, the chief diplomatic correspondence in europe for the new york times, and by jane and the mock senior research fellow at the center for china, globalization, and induced germany for non duty hoffa professor. i'm direct to the center for ulta,

motive research think tank. hello and welcome to, oh, if i could start with steven in brussels, the back of what's going on in the us right now between ultimate goes and all to work is, will it impact how competitive the us becomes in the global ag market? and it's down to who i mean, part of lots of the union of auto workers is trying to do is to protect jobs. a lot of the electrical vehicle work done in the united states is being done from plants that are non traditional but are also non unionized. and this is what striving the union is crazy. it is also true that electric cars require fire if she were moving parts, so they will require far fewer auto workers. so part of what you have going on is an effort for the me is to preserve themselves,

but also to preserve their jobs in a very quickly changing text about technological marketplace. and this thing i'd states has done to be competitive in electrical cars. it's going to have to cut its costs. now we can get into the subsidy question later, but i, i, i think it's quite clear that cost is going to really matter. because if everyone's going to have to buy an electric car, there's going to have to be all kinds of new shows, not just the expensive cars. that's quite a lot of american and european electric card manufacturers seem to favor. i live the fact that you've put your finger on costs for a steve, and let me take that point to andy and badging can the us catch up. however, this is result of this strike going on in the us kinda catch up when frankly, labor costs and production costs in china. many would say thanks to state subsidies a lot cheaper. you know,

i think that exactly is the existential challenge. facing the us auto industry because it's not just the transition to eaves with its fewer parts. therefore requiring fewer workers. there's another very important technological change on the horizon to and that is the integration of a i and robots which will further reduce the need for human labor. and sammy, you're exactly right that china has a cost advantage. but we also have to recognize that he used to be made in china, but increasingly, especially with a bees, it's designed in china as well. so chinese electric vehicles are not only cost effective, but they're increasingly seen as some of the best designers and uh, some of the best spot out in terms of understanding consumer preferences. and steven mentioned nature's niches. and this is exactly what some of these trainings

companies have shown, a remarkable sophistication. so i think it's going to be very, very challenging for the us, automotive industry investing point that further 9 not only made in china designed in china and the says, how did china get ahead of everyone else, especially the traditional german comma. because when it comes to the market, so this is not just china, taylor mosque, us some kind of examples. we're sending it to china. we have a few minutes ago that the cost position. and i think like way goes, it says i resize it thing and they are being sent to us call make us a lack of this, the cost effectiveness. so if you look at it in detail cost,

only $2.00 scales and some chinese or time are be want to be very successful. because themselves was told by 5000000 electric very goods this year just long company. the same applies to the most contest. so it would sell about $1.00 cost just electric waves. so they both have this caves and if you got this k is, then you have the cost advantages. the 2nd thing is, the better we, if you look at the battery is about 40 foot and we're up to 40 percent of the cost of the electric bank goes and try, you know, no, it's a bit better. we. china has a lot of experience in the 20, in the last 20 years. i build up is better we to hold on sundays, but our industries, so they have natural competitive advantages and they're, what they did is the same. what uh, you know,

most skipped is go as fast as possible in this case, and the rest of the pictures to sell about 5 to 10 or 15 percent of its volume as electric vehicles. so they miss this case to be, you know, become competitive. it makes no sense to go and do it to the, to the table or something like that. i'm only certain man because when you talk about scales, couldn't see it radically. the us has a big market. it could have taken advantage of scalar production, right? yes, you're right, that's i'm at least, you know must be so using this case, however, it just started a few months ago when the and the information that from the job i was putting in place, then that add to a bias of electric, ready to get good get subsidies and if you don't give the people to subsidies, then they can afford electric bags because electric records at the bowman. hi john,

still a higher price and have a higher price to compare with the combustion engine so. so the question is, putting your walk into the position that this k is r and the scales, all the people buy the cause and the china is due to the fact that the government has to be, i guess, each call make up sense of all time state or subsidies if customers are buying, it's costly. so next we base. all right. i think we call the void the issue of subsidies. now it's come up with 2 of i guess let me bring and the and then put the question this way. there may be a number of reasons why china was doing so while in the electrical vehicle market, but is also part of it subsidies, defensive, a strategic and international studies says chinese government has invested at least 60000000000 us dollars to support the industry to well, sammy, that was the back the,

the point i wanted to address is why hasn't the us been more competitive? inquired there's 2 reasons for your anger here in automakers as well. what i think is often called the innovators dilemma in that when you have the big 3 automakers as the industry incumbents, as well as a german car company, sort of making a lot of money, selling, internal combustion engine automobiles. it's incredibly difficult to cannibalize your existing businesses for this new type of technology. and we see in china, of course, that the leaders like b, y, d, like neo, we're not legacy automakers tests. what was not either. so i think it's not surprising from this perspective. now let me look at the role of government. this is the other very, very important factor here in that electric vehicles are not just stands alone. products are actually

a new technology eco system because you need charging stations, you know, there's other things that need to be developed or d and batteries and what china is very good at is a setting long term goals and marsh ling, the resources including financial resources, legislation etc, at every level of government, from the national level, to the provincial level, to the municipal level, even down to the neighborhood level. so the last few years, there are charging stations everywhere in china. and think about this if you have the best cheapest electric vehicle in the world, but you have nowhere in charge it. it's not very useful. so this is very important . the role of government, this is where i think certainly the us with its structure of government makes it difficult if not impossible, to manage these

a generic spot in technology and ecosystem. okay, that's a good point. let's take it back to steve and then ken one, blaine, china, if china has planned, it's a, the market in advance of everyone given support in advance of everyone. while in some countries, the petro related industries are being cold and that, and the internal combustion engine, interest, lobby's kept the transition back. a. yeah, i mean, i don't think we're talking about blame. we're just talking about how it's evolved . i think the chinese should get quite a lot of credit and also one should understand china has a big uh, sustainability, climate problem. and so putting electric cars in the hands of chinese consumers as fast as possible, particularly since many of them didn't have cars before. makes a great deal of sense. so all full credit to china. and of

course, the subsidies as they're not work both ways because western countries are subsidizing consumers for buying electric cars anyway. so it's not the same kind of subsidy in a way a subsidies to industry are probably more efficient if you're trying to build up industry. but there are obviously subsidies on, on both sides. my, my guess is that given the size of, of the united states market, it will managed to catch up, partly because it's taking climate more and more seriously. but as one of your guests said, when by and pass the inflation reduction act, suddenly you had the feeling about the government was really behind this transition . your fans complained about it, obviously because they thought it was trying to seduce their own in just

industrial champions. but the fact of the matter is that is a very important bill for green energy transition. and germany itself has a big problem. stephen, how, how will us catch up tomorrow? how will it catch up as well? it's going to get into the money is going to work. i mean, it's a market and it's a market that will be increasingly for us to go electric. so when that happens, market forces actually do work and might be, we'll see. i mean, maybe i'm wrong, but it's not about catching up on or, or not catching up. it's a matter of building an industry that as, as your colleagues in various parts said, bills to scale and makes things affordable for the good of everyone. toki move on colleague into his bug. let's go with a foot. and then so friday is a global trade baffle looming, at least between the you and china,

over this issue of subsidies. it seems to be because a little up on the line, the president of the you commission claim to that she's going into a study to look off subsidies which on fe uh which uh the chinese government do for it sent us a. she gives probably no growth, just came up with a statement. we have think about unfair competition methods, but i'm not a bro. nobody can understand such a system such of such a statement. why is it isn't become a disproves up? so i, my feeling is the, if you look at europe, we have the french people enter behalf of my call, which is president of roger, my hobos respond to that. was it off on the vent, become a, became a you,

president of the french automotive industry is a very, very weak in china. they have in front of it, no sales, they are not less about. so for friends, there is no risk if a be in europe installed a trade battery. yes. and terrorist against the chinese they can lose anything they can just do in due to the fact that they can sell it's more priced higher prize when it goes to the germans with those rights 30. because volkswagen manufacturers, the biggest uh, you're being kind of like the manufacturer is a these electric vehicles in china. right. so is the real unity funding within the u. of even this question of a trade back? let me see some of the drama comedies because even being w related, they sell about 30 to 40 percent off. it's about advice change in china. so the big

risk getting going to going into trade to box as so that is the strange thing. it's a bit our secretary off a minute of the eco nomics. mr. how big toes the population. i think it's a good thing that to the you commission to do an analysis. nobody understands that because it's a big risk for the terms of whether to kind a street and to be honest, as you can be better if you make a barrier. so you'd be better if you come up down a bit more competition and go up and scales and not, and try to bury us. so we, in europe, face a big problem and it could be the euro is going into a trade war, pigs, china, this couldn't be the next steps, like donald trump, they do some years ago. and they do show that perspective is

a trade war really possible given how integrated the call the come market is. i mean both the biggest, the biggest manufacturers in europe for a, the vehicles and in the us, they manufacturer and china to try barriers will be very bad business for them as well. i think in any rational basis we can say that yes, the trade war would be a very bad thing and yet they still do happen. but i also want to point out here that we have to also consider different constituencies. so yes, climate change is as dire us threats as many governments. many people, many multi level organizations like the united nations bleeds but by slowing down the adoption of eaves, in fact, uh, europe and the united states are really undermining of global welfare. and

stevens point, i think the best thing for the united states would be to what, how training this gives into the market. that would be best for american consumers . they would have inexpensive, save up and well designed electric vehicles that are good for the planet. um, now of course, this would probably not be so good for some of the incumbents, american automakers. but again, politics is all about prioritizing. and if indeed, a climate change is such a big spread shipments, governments around the world be doing what they can to achieve carbon neutrality and other goals that make it more sustainable planned as possible. the most sustained a little plan that, of course, runs up against the issue of human beings being selfish. and they always once be each nation that the head of that though they let spring and stephen wants to get

into the us. because as also a question of politics, right? i mean, joe biden is running for reelection. if he wants to be re elected, he needs the votes as the one last time of american working class men and women. and they are represented by unions. awesome. and by the you date the u a w. so bible is trying with laws live b r a to promote reading practices. but he also finds politics means, you know, he considers himself, he portrays themselves as the defender of america middle class as a foreign policy for the middle class. he's a big union guy. so naturally he's going to support the u a. w. i'm not sure we need to get into a trade or, but i have the sense what the use really trying to do is buy time for its own

domestic industries to try to catch up, to reduce their dependency on china and not so much for finished cars. but for batteries, i mean china, you know, if you believe some figures produces 75 percent of all the world car batteries, so in europe in industry was slow to get started. i think the german car industry was great at making last century's cars. it's been slow at learning how to make good electric cars, digital cars, a i cars and it needs to try to catch up. and i think that's what the use trying to to do, which will require, i think, a little bit of protectionism. i think that words best thought you read my mind again, steven, cuz i'm glad you. you mentioned batteries that can the us and europe. really kat

shop on batteries, particularly europe 30. uh, we know the largest manufacturer in your building 6 gig of factories across europe, and i think one in china to try and create its own supply chain. is it too late? and now it's not too late. it's the same. what to be, why the judge and china, so we don't you doing that with this subsidy, gary, which is called paul coe about to see that it makes no sense to go in conflict in contrast with each other in terms of the c a t o which is that all just better, we make the tiniest, but every make up has a built up applied to the a viable and then the use of sales and support the shuttle car industry. so it would be very interesting to go in corporations. you corporations, with chinese companies and corporations to 0, being under the u. s. companies to fall to form a new area. and richard richard, cost effective,

busy the battery. a seem to be interesting to read w for it. savvy has a link to to boston, which is a chinese company are doing better ways. so they're brought together. why shouldn't be love to give up just in case of not to go in and do for the confrontations they own the child is, but every visit us but, or even need to your we need a battery of in the, the times of crime. it says the counselor opinion, because at times of conscience we saw with the mike richard, whole supply chain incidents. sometimes countries do prioritize the national production of others that may take about points since i think we go on a minute and the, i mean what we're hearing sensible sentiment from fuzzy but is it, is it likely as well that's the challenge and the

opportunity. so certainly like with somebody, conductors that countries a c as a, a, a national security issue, at least in part. so if we look at batteries as well, they have both. so i just want me to be on sure the same way and they because they're the most important component definitely in the production i'll give you the and in other parts of all electric future. absolutely. so again, i think this makes this very challenging to resolve that. it's both a challenge and an opportunity that on the one hand consumers of course, lots of good products, a reasonable price is a certain product, certain inputs, like so many conductors, i think like bad, or he's also have national security implications as well. so i think each country has to decide how to balance that and it's a very difficult balance um,

as we're seeing. all right, let me uh, bring in steve and then uh all we're going to see perhaps regions try and focus on different segments of the market. us manufacturers try and capture maybe the s u, v and truck market square. as you are focused on the range of luxury brands, it has and so on. that would be logical. i mean, that seems to be where, where we're actually going. but i mean, it is a technological revolution. there's a lot of chaos things we'll have to shake out. there's all an awful lot of competition tests. let's feeling it now to. so it's, it's very hard to predict. i think rationality in this market is to be hoped for, but not to be expected. okay, that's an interesting line i think to end the show on let's try and call and guess for all the contributions stephen lanka and the mock and for the non duty hoffer

and thank you to falter. you can see the show again, any time by visiting our website, l g 0. don't com for further discussion head over to on facebook page, that's facebook dot com, forward slash a j inside story and also join the conversation on x, formerly known as twitter handle. there is that a inside story for me, sounds like that and the whole team, if an out is combine the

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