How China's superfast charging cars are leaving American EVs in the dust

An electric vehicle battery that charges almost as fast as it takes to fill a tank of gas. And it might soon be available almost everywhere except the United States. How China's superfast-charging electric vehicles are leaving American EVs in the dust.

Zitong Zhang, reviews electric vehicles for the YouTube channel ZITONG, China on the Ground.

Natalie Neff, editor at Autoweek.

Ilaria Mazzocco, deputy director and senior fellow with the Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies.

Part I

MEGHNA CHAKRABARTI: So you're thinking about buying an electric vehicle but aren't quite ready yet because yes, cars are actually really expensive right now. But more specifically, there's maybe the range anxiety issue, or perhaps even more common, you see all those folks at the charging stations just sitting there.

For a long time, maybe on their phones, maybe eating, doing something to pass the interminable time it takes to juice up their batteries while you roll into the gas station. Sometimes even on fumes, but you fill up the tank, pop into the convenience store for a snack and drive away. In 10 minutes, you look in the rear view and you see those sad souls in their Teslas waiting, still waiting, even at the supercharging stations for sometimes as long as half an hour. Life is short.

Who wants to wait around that much? Today I am here to tell you that Chinese car maker BYD has some news. Zitong Zhang joins us. He reviews electric vehicles on his YouTube channel, ZITONG | China On The Ground, and he's in Beijing. Welcome to On Point.

ZITONG ZHANG: Hi Meghna. Thanks for having me.

CHAKRABARTI: Okay. BYD says it has a new, very fast charging EV.

How long does it take to charge this battery to full from almost empty?

ZHANG: From almost empty to 70% in five minutes and to 97% in nine minutes.

CHAKRABARTI: Oh my gosh. Obviously, I knew this was gonna come right? I knew this was gonna happen because we produced this show. But even just hearing you say it right now is mind blowing.

How is this even possible?

ZHANG: All thanks to the BYD's second generation of their blade battery. If you know about their blade batteries or know about battery safety, you know that BYD's very famous for that. Their batteries is super safe and safe from punctures. They're not burning up or anything.

And now the second generation is now going to be world famous at fast charging. Flash charging actually. Because that's like super fast.

CHAKRABARTI: Now you've seen the cars with this battery in it? Yes?

ZHANG: Yes. I personally tested it.

CHAKRABARTI: Okay. And from externally they just look like regular modern EV cars.

ZHANG: Yeah, they're just normal cars with a different, like a second generation of their normal battery. This is like a normal thing.

CHAKRABARTI: Now, so I was watching some TikTok and YouTube videos last night, and I was seeing people like taking the charging plug, putting it into the side of the car and then one guy put his phone like in front of the information panel on the dashboard, and you could see the charge percentage go up. And it was going up so fast. It actually reminded me of the turning of numbers when, here in the United States, you're filling up a gas tank. It was that quickly.

Did you have that same experience?

ZHANG: Exactly. That was just like looking at a fuel station filling up a car. That's exactly how I felt. Actually, the time that I tested that car, it didn't even take nine minutes to charge it to 97%. It was actually eight minutes and 28 seconds.

CHAKRABARTI: Amazing. Okay, so I want to take a quick step back here, because again, five minutes to, what, 75% you said.

ZHANG: Five minutes.

CHAKRABARTI: To 70%, and then even under nine minutes to almost entirely fully recharge. Okay. Now, as everyone probably knows, that short charging times have really been one of the holy grails of EV technology and China actually has been leading the way for a while on this, and we'll talk about why. But American car makers have been watching as Chinese makers become bigger and bigger competitors on the world stage. For example, here's Ford's CEO, Jim Farley speaking at the Aspen Ideas Festival in Colorado last June.

JIM FARLEY: Their quality of their vehicles is far superior to what I see in the West. We are in a global competition with China and it's not just EVs and if we lose this, we do not have a future of Ford.

CHAKRABARTI: Okay, so that was in June. Couple months later in October, he spoke on the Decoder podcast and there Farley said that it's not just Ford who's facing stiff competition on the international markets.

FARLEY: The competitive reality is that the Chinese are the 700-pound gorilla in our industry for EVs. There's no real competition from Tesla or GM or Ford with what we've seen from China.

CHAKRABARTI: Earlier this month, Farley spoke to the Los Angeles Times' Anna Magzanyan, and he stressed that domestic automakers in the U.S. are actually facing a tipping point on EVs.

FARLEY: The earth is shifting competitively under your shoes, and as a leader, what are you going to be a victim? You have a moment. That's just motivated us more. I put the picture of that car inside my metaphoric locker every morning. And as an American, it's very important for our country to compete and beat them.

CHAKRABARTI: Okay, so that's Ford's CEO Jim Farley, and he was saying all of that before the announcement came from BYD about their blazing fast charge time.

(TRANSLATION)

WANG CHUANFU: This is the ultimate charging speed of our second-generation Blade Battery. It charges from 10% to 70% in just five minutes, and from 10% to 97% in only nine minutes. Truly making charging as fast as refueling.

CHAKRABARTI: Okay, so that was BYD Chairman Wang Chuanfu announcing that second-generation Blade Battery and flash charging technology earlier this month.

And by the way, the announcement of that flash charging technology has to do with charging stations that can distribute up to 1,500 kilowatts per connector. And the company intends to build 20,000 of these stations by 2026. Now here's another thing. How much, Zitong, are these cars going to cost if you're buying them, say, in China?

ZHANG: Here's an interesting thing about these cars, because as you probably know, BYD will cost a little bit more overseas than that is in China. Right now, the cars, the car models that you can buy with the flash charging technology. Let's take the Leopard 3 for an example.

This is like a sub-brand of BYD that has this capability, is equipped with the second generation of the Blade Battery. The cheapest one you can get is $22,000 U.S. dollars.

CHAKRABARTI: (LAUGHS) I'm not laughing in mockery; I'm laughing out of jealousy. That's in China, right?

ZHANG: That's in China, yes.

That's a rear wheel drive version is $22,404, and the all-wheel drive version is $24,734 U.S. dollars.

CHAKRABARTI: Unbelievable. And I'm seeing here that BYD is saying that one of their models that has this new battery technology in it called the Song Ultra, had what, more than 37,000 pre-orders made for the car, just the week following its announcement.

ZHANG: Yeah, that's actually the car that I tested the flash charging with.

CHAKRABARTI: Okay. Okay. I'm going to ask you about that in just a second, but I want to note that a lot of listeners may not have even heard of BYD because it is not a model, it's not a maker that you see in the U.S. domestic car market, and that's because they are not for sale here.

There's some commercial BYD vehicles I believe that are sold in the United States, but not retail. And BYD has no immediate plans to enter the U.S. retail auto market due to things like, well, existing regulatory hurdles and a 100% tariff that has been placed on the Chinese imports by the Trump administration.

What was it like to drive the Song Ultra?

ZHANG: It's just like driving a normal SUV. It's only got like the second-generation Blade Battery. It only charges faster, but everything else is just like driving a normal EV. It's a normal car. This kind of technology in China, maybe it's stunning, it's amazing to American people. But I'm going to be completely honest, in China, this is just like a normal thing right now, because the competition is so huge. It is so competitive in the Chinese markets, car makers have to come up with like innovations and stunning technologies all the time in order to get people to buy their cars.

So this kind of technology, like we expect this to happen. If you are not as good as this, then you have a problem.

CHAKRABARTI: Okay we want nothing but the truth from you. So give us, give us a broader sense as to what the electric vehicle on the sort of retail side, not commercial vehicles, what it's like in China. If you're not buying a car with one of the Blade, the second-generation Blade Batteries in it, but you're buying maybe the next best thing that's already been out there. What are those charge times like?

ZHANG: I think the average charge time would be around 15 to 20 minutes, give or take.

It will get you from around 20%, or starting at 30% to 80%. This is probably the average speed for fast chargers here in China.

CHAKRABARTI: That actually sounds familiar. Because I think Teslas are in that same range.

ZHANG: Yeah, they're usually about 15 minutes, but I'm talking about even just converting to U.S. dollars, which is like $12,000 U.S. dollars cars.

CHAKRABARTI: Oh, okay. Okay. Wow. The price point keeps dropping. Tell me another thing. Zitong, you said that the Chinese buyers expect these things. How deep is electric vehicle penetration in the overall car market? Do we have an estimate as terms like the percentage of cars on the road in China right now that are fully electric?

ZHANG: What do you mean by fully electric? Because there's also plugin hybrids, and range extended versions of the EVs that we all call them EVs. If you combine all of those, it is about 50% now.

CHAKRABARTI: Half the cars on the road. Okay. I'm gonna have to look up what the number here is in the United States, but that seems like a lot.

And what has the reception been within, actually, let me ask you. What has the reception been in other markets, non-Chinese markets where BYD sells its cars?

ZHANG: That's not really my area of okay expertise. I only know about the Chinese market. And again, like I only review these cars.

I observe the Chinese car market, but I'm not experts on this, on the statistics.

Part II

CHAKRABARTI: I'd like to bring Natalie Neff into the conversation now. She's an editor at Autoweek and she's with us from Detroit, Michigan.

Natalie, welcome to On Point.

NATALIE NEFF: Hello, Meghna.

CHAKRABARTI: So what do you think about a nine minute, 97% plus charge time.

NEFF: It's stunning. You're completely right to just be in awe of what we've been hearing out of China in terms of, not just the nine minute threshold, across the board the charging times are just something that we are in all rights to be jealous of here in the United States.

CHAKRABARTI: Because it's one of the bigger, as I started the show with, it's one of the bigger impediments to EV adoption, right? We will talk about range anxiety in a minute, but the idea of sitting around. People, please do not send me emails telling me how horrible I am. But I just don't love the idea of sitting there for half an hour every time I have to fill up my car.

NEFF: Who does really? It's ridiculous to think that you have to plan charging while doing your grocery shopping. For instance.

CHAKRABARTI: Yeah, exactly. So do you have a sense as to what, I guess, the most competitive U.S. models would be in terms of fast charge times? Is it still the Teslas at those supercharging stations?

NEFF: Teslas, the key with Tesla is the ubiquity of the supercharging stations, just the easy access. Tesla has done a wonderful job of building its own charging infrastructure in the vacuum of the government space, in that part. Right now, I think the speed of charging is led by, in fact, companies like Hyundai.

And you get into an IONIQ 5 or a similar vehicle from their portfolio and that's where you're going to see some of the quicker charging times. But we're still not talking about a 15-minute charge here. It is faster, but I've sat at charging stations for upwards of 45 minutes.

So when I get in a Hyundai, I am pleased to only be there for maybe 20 minutes.

CHAKRABARTI: Right now, I know that a lot of people listening who are EV owners may say that this is not an issue for them because they're just plugging in at home, completely understand that is a way around these charge time issues, but there's still a lot of folks who can't do that.

Zitong, can I go back to you because I've just mentioned BYD several times, but a lot of folks, again, since they do not sell in the retail market here in the United States, may not know a lot about the company. Can you tell us a little bit about BYD?

ZHANG: BYD is one of the largest car makers here in China.

I'm not going to say the top, but one of the largest. It sells millions of cars every year, and they have so many different varieties of cars, not just sedan or SUVs. They also make supercar like real. BYD has this sub-brand called YangWang and it actually broke the world record of producing a fastest car in the world right now. The YangWang U9 X, I think the top speed of that car is 430 something kilometers per hour, which is almost 300 miles per hour.

CHAKRABARTI: Wait, can you just buy that if you're a Chinese consumer?

ZHANG: Yeah, you can. That is actually a production car. And you don't have to be a Chinese consumer.

I know there's a lot of guys rich guys from Dubai already ordered that.

CHAKRABARTI: Natalie, I'm not even sure if that car would be street legal in the United States, but the numbers and the direction of the technology in China still continues to amaze me. I do want to hear from you, Natalie, a little bit about how the U.S. makers are reflecting on this. Because as we played all that tape from Jim Farley at Ford earlier, is he alone amongst the domestic automakers as seeing China racing ahead of what U.S. manufacturers are doing?

NEFF: Oh, no, absolutely not. He's, first of all, I commend him on his his frankness.

But his sentiments are shared across the industry, as reflected by the strong lobby in Washington and getting, compelling United States to put up a little bit more protective barriers against letting the Chinese automakers either to export their cars here or even build their cars here.

So, you know, Jim Farley is very much in his right to look over at what's happening in China and worry about what impact that could have on our own industry here.

CHAKRABARTI: Wow. Okay. So let me go. I'm bouncing back and forth between Detroit and Beijing for a reason. Because the comparison is just so dramatic.

Zitong, another question about what the Chinese domestic market there expects from their cars. I want to drift away from battery charge time for a moment because I've been reading here that there are even other sort of bonuses in cars in China, like massaging seats. Is that right?

ZHANG: You call that bonus really?

CHAKRABARTI: (LAUGHS) Is that standard?

ZHANG: We call that a standard issue really, because if you don't have seat massaging and ventilation and heating in your car, you really shouldn't sell your car over $20,000 U.S. dollars.

CHAKRABARTI: Wow. And refrigerators as well in the cars.

ZHANG: Yeah. There's a large variety, there's a large numbers of cars, especially SUVs, that is really for family.

Really for the parents, how to take care of their children or how to take care of the entire family. So these SUVs are usually just big five seaters, or six, or even seven seaters, SUVs. And they all, this is standard issue. Again, this is standard. They all have a big screen foldable TV in the second row, and also, they have a refrigerator that can go down to as low as minus five or six degrees Celsius and up to 50 degrees Celsius.

To heat or to cool something down in the car, just make your life so much easier. And also, you can flat out your first-row seats and the second-row seat and make this car just entirely turn it into a bed and you can camp inside the car or even just sleep in the car.

These are all pretty normal specs here in China.

CHAKRABARTI: Normal specs. Wow. One more question because I'm thinking of the things that stand in the way of even greater EV adoption in the United States. And we keep talking about range anxiety, which is real. There's a very deep culture of whether people do it or not, of seeing your car as an instrument of freedom.

If you just want to jump in the car and do a classic American Road trip across several states, you can, in part because you know you're going to find a gas station when your gas runs low. And people are concerned that we don't have the charging infrastructure in the country to be able to replicate that kind of, let's say, worry free long distance driving experience.

So what is the driving culture like in China? Zitong is it also freedom oriented or most people just urban drivers?

ZHANG: Most people are urban drivers, but when it comes to weekends, they definitely, some of them definitely want to go on longer road trips. Like what you said, like Americans, right?

They do that. So how in the Chinese car market, we also, all the car makes are also trying to tackle this range anxiety thing, this range anxiety. They come up with different solutions like BYD come up with really fast flash charging. And let's say that another company called NIO, they come up with battery swapping.

They just build battery swap stations everywhere. When you run out of battery, you just don't, you don't charge it, you just go to another battery swapping station and swap out your old ones and change, swap in a new one, a fully charged one, and you just keep on going. That's another way to tackle it.

And also, there are, like I said before, plugin hybrids and range extender, which is a very big market here in China. So you have a engine in your car, but when it comes to plugin hybrids, the engine also powers the car. So when the battery's low, the engine starts again, and it charges the battery and it can also just keep on, keep the car going.

And when it comes to range extender EVs, there are also a engine in the car, but the engine only acts as the --

CHAKRABARTI: ... Okay, we're gonna get him back because there's a lot more I wanna learn about the Chinese domestic car market here. But Natalie, let me turn back to you. So actually, it sounds and correct me if I'm wrong, if you see this differently, that there are actually, there are overlaps in terms of driving culture between China and the United States. But are there other sort of cultural aspects of how Americans relationships with cars that you feel are, they still stand in the way of greater adoption of EVs?

NEFF: Yeah, we're stuck in this idea of range anxiety, right? Which is absolutely true.

But I look at it a little bit differently. Most EVs sold in the United States now have plenty of range for what we do every day. And even if you want to venture a little further afield the problem is the whole, like we're programmed to interact with the car in a very specific way. We have generations of relationships with a car, right?

Where on every intersection in an urban area, all four corners might have gas stations. It's just this innate peace of mind that you can do whatever you want with your car and not worry. So the range anxiety component comes in, I think when we look at the outlying situations like you said.

Road trips, everyone worries about, how can I take my EV on a road trip? Right now, road trips in an EV do require a great deal of planning ahead of time because we just don't have the infrastructure like you said, and for example, we talk about the idea of stretching your gas tank between exits.

When you're on a road trip, you can make it one more exit before you refill. But with an EV, the reality is that's not something that's possible because you simply, if you run out of charge, you simply can't walk up to the gas station and bring a gallon of charge back to your car. So these are the things that are fundamentally different in the way that we interact with a car.

And I just want to go back to something you said before about most EV adopters in the United States think this kind of conversation is ridiculous because they say you just charge up at home. But again, that requires a fundamental shift in most people's relationship with their car and on how you interact with it, right?

For the outlying, for the people who have already adopted electric vehicles, it feels like a no brainer, but for the vast majority of people in the United States, that's just that calls for a fundamental shift in how we relate with our car.

CHAKRABARTI: Yeah, and if you don't live in a single-family home either, you may not be able to actually install a charging station in your multi-family dwelling as well. Very true. Zitong, I think we have you back here. I did wanna actually also ask you, we've been focusing on BYD because they made this enormous announcement of this ultra-fast charging time in their second-generation Blade Battery. But I understand that Chinese makers, they are also working with other global car makers, right?

Like for example, I don't know let's take Volkswagen, who wants to sell their cars in China, but also are importing to Germany, I guess the BYD or Chinese battery technology.

ZHANG: Yes. It's very interesting you mentioned Volkswagen because I was just at Volkswagen's brand night last night and Volkswagen announced that they're going to launch 13 new car models this year.

They have three different joint ventures here in China. ... All three different companies produce very different cars and they're going to bring 13 new cars onto the market. And all of them, on some extent, are combined now with Chinese technology.

Let's say, let's take the ID UNYX from the Golden.

CHAKRABARTI: ... I'm so sorry to interrupt you, but you just dropped out for a few seconds when you were talking about the ID Golden. So can you repeat that?

ZHANG: Yeah, sorry. The ID UNYX from the Golden VW, so they are now using chips from another car company called XPeng.

They're using their Turing chip. ... I'm just giving you that example.

CHAKRABARTI: ... Natalie, let me turn back to you here. We got it just a couple minutes before our next break. When we come back from the break, we're going to talk in depth about what China has done in order to encourage this rapid development of EV technology. But what do you think are the major impediments.

In place right now in the United States for domestic car makers to make similar advances.

NEFF: I think the major impediment is the lack of infrastructure and the way China went about it is very centralized. China, meaning the government of China, made a decision to invest heavily in building out its infrastructure.

We just don't have the same wherewithal here to do that.

CHAKRABARTI: When you say infrastructure, what do you mean? Specifically?

NEFF: Charging stations, and investment in the technologies across the companies themselves. It was a full court press in China to get EV technology, not only off the ground, but to be as attractive and in reach of most buyers in China, whereas in the United States, it's pretty much the automakers themselves that have had to fight that battle to get interest in EVs with very, comparatively speaking, very little help from the government.

CHAKRABARTI: In the United States, we had this big announcement in the Biden administration, right? That they were going to spend hundreds of millions of dollars to help expand charging stations across the United States, and next to none of them have been built.

Part III

CHAKRABARTI: Let me bring in Ilaria Mazzocco now, who's deputy director and senior fellow with the Trustee chair in Chinese Business and Economics at the Center for Strategic and International Studies joining us from Washington.

Ilaria, welcome to on Point.

ILARIA MAZZOCCO: Thank you for having me, Meghna.

CHAKRABARTI: I want to talk about BYD more specifically. Because again, a lot of people just may not be at all familiar with this company. I understand that BYD means build your own dreams. Founded in 1999 by its still current chair Wang Chuanfu, but it didn't start out as a car maker, right Ilaria?

MAZZOCCO: Yeah, BYD is actually an interesting and rather unique story in the auto sector. They had been making batteries for electronics throughout the '90s actually.

And they really then expand into the auto sector later on when they buy out a failing car maker. So for several years, they're making lower end batteries and frankly lower end cars as well.

CHAKRABARTI: So it's in their early years batteries for things like laptops, mobile phones, stuff like that.

MAZZOCCO: Yeah. Really. And they're like, I mean they really start by making not lithium ion batteries, right? They're making lead acid batteries.

They're really like low end stuff in the '90s. But then they move up, they move up the value chain, they start making lithium-ion batteries. And they have this vision of making EVs, and that's why they buy out this car maker and in the sort of early 2000s, and later on, right?

They keep at it. And by the time incentives start popping up in China, they're really well positioned to actually develop the EV sector and become EV leaders, which they are now in China. They're the biggest, the bestselling brand in China.

MAZZOCCO: ... There weren't that many cars being sold. (BOTH LAUGH)

We're talking, really pre-2015, we're talking very small volumes. But BYD does really has a really interesting strategy in the earlier years.

And here we're talking around, right after the financial, global financial crisis. Right around 2009, 2010, 2011, 2012. They start selling taxis. They make these cars that can be these EVs that they start marketing to taxi companies which have incentives at the local level to and central level actually to electrify their taxi fleets.

So that's actually an easy way to sell large amounts of cars. And they do fairly well. And it starts also familiarizing consumers with the concept of an electric vehicle. Because you take a taxi and oh, it's working, it's not blowing up. And so a few years later when there's a car that you might actually want to consider, it's an electric vehicle, you're not quite as scared of it.

CHAKRABARTI: I love how you put it. You get habituated to EVs through taxis that don't blow up. Very critical thinking. Again, we're talking about, 2010, right? Yeah. When really EVs were a real novelty around the world.

CHAKRABARTI: Oh, I'm not disagreeing with you. It just reminded me of a time where I literally saw a Tesla battery on fire on the side of the road.

MAZZOCCO: Exactly. And in 2010, I think the blowing up EV was a much more legitimate concern than it is today.

CHAKRABARTI: And look how far, so this is the thing, 2010 is only 16 years ago. So much development since then. Natalie, I'm gonna come back to you in a moment, but you have said the word incentive several times, both at the local and central, as you said.

So these are incentives from the Chinese government, specifically, what were some of those incentives.

MAZZOCCO: So the Chinese government set up two different kinds of incentives. On the one hand, there's incentives, which I would say were fairly comparable to the tax credits that were available to consumers in the United States for EBS and still are in some places.

So they're really aimed at lowering the upfront cost for consumers when they go and buy the car. Works slightly differently in China, but these were widely available. Some of these were set by the central government and some were made available by local governments, usually cities or provinces in some cases, but usually cities.

And then the other side of this though, which is slightly different, is that the government also provided a lot of incentives to actual producers. So actually subsidies or tax credits or other types of incentives to help manufacturers get to the point where they can scale up and marketize and commercialize these vehicles.

Now, that's not necessarily entirely unique to EVs in the Chinese system. There's a lot of just support for manufacturing overall. But I would say that with time, EVs became more and more important, and so more and more incentives were made available to EV makers.

CHAKRABARTI: Okay. So Natalie, let me turn back to you then.

How does that compare to the United States government or governments, state and local as well? And their relationship to us automakers.

NEFF: Like Ilaria said, we did have a federal tax incentive for EV purchases up until September of last year, and it really motivated a lot of buyers to dip their toes in EV ownership, when you're looking at $7,500 off the nose of a sticker, it makes it a little more palatable.

Once those main federal incentives evaporated, buyers are now looking at, where is the advantage of buying an EV that has all these other hurdles to overcome in ownership versus a conventionally gas-powered car. Right now, we're looking at only about 2% of cars on the road are EVs.

And going back to what Zitong said earlier, which is sort of jaw dropping. He has, he had the quote of something like 50%. Now that includes hybrids and range extending vehicles, but we're not even close here. So where the incentives really helped the Chinese market is that they, and I know some of the incentives now in China have also evaporated, but they got to a point where the vast majority of the buying public there have acclimated to EVs and the benefits of EVs across the spectrum, whereas we only really offered incentives on EVs long enough to get a very few number of people converted. Now, in places like California, you're still seeing maybe 20% of car purchases are of EVs.

But as we know, California is an outlier in terms of car purchases across the board, you're looking at maybe seven to 10%. Tops of EV purchases.

CHAKRABARTI: Natalie you reminded us that the EV tax credit that did exist in the United States, went away in September of last year.

So that would be under the Trump administration. Can you, do you mind, can you remember why that happened?

NEFF: Oh, there were, I don't want to get into the weeds on that, but there were a lot of things that sort of went away that were enacted under the Biden administration, once Trump returned to office across the board, not just automotive and EVs.

But across the board.

CHAKRABARTI: Okay. Ilaria, let me go back to you because China, at this same period of time, late nineties, early 2000s, if memory serves, was largely trying to also develop a domestic car manufacturing market. And buyer's market as well, cars as a whole. Do you have any insight as to why they put very specific extra effort it seems into electric vehicles specifically? Because they could, the Chinese government could have chosen to just continue to incentivize gas or internal combustion technology.

MAZZOCCO: Yeah, absolutely. So the goal of the Chinese government was always to trying to create a domestic industry, right?

So with domestic players who could be global players as well. So starting actually from the eighties right after China started opening up to foreign investment. There was a lot of focus on attracting foreign companies into China and then also having to partner with Chinese companies through joint ventures.

That was actually mandated if you wanted to have a factory in China, you had to have a joint venture. But what happened was that, despite several decades of these joint ventures existing in China, tech transfer really was fairly limited and Chinese companies were fairly happy to just assemble the cars that were developed.

And much of the value added was really staying in the home country of the foreign automaker, right? Be it Germany, the United States, Japan, et cetera. This was not particularly satisfactory to the Chinese government, especially as we get more into the 2000s. And Chinese government has really started to prioritize more of the technological independence and value.

Moving up the value chain within China. So by 2010, they introduced policies that are really aimed at developing an EV market, but the ideas go even back a bit. And the idea was that really China should be focusing on leapfrogging technology so that it was going to be always very hard for Chinese auto companies to compete with foreign companies in the ... internal combust engine vehicle space, because they were competing against over a hundred years of IP and know-how.

But with EVs, it would be a level playing field, and so there China could leap frog and really could compete. And with such a big auto market, China obviously has the largest auto market in the world. They could really shift technology as well.

China obviously has the largest auto market in the world. They could really shift technology as well.

Ilaria Mazzocco

CHAKRABARTI: And I understand this sort of idea for leapfrogging into the electric space.

There were a few critical people in China that that were essential to this. You told our producer Willis about there was a minister of science and technology who was a car guy as well.

MAZZOCCO: Yeah, absolutely. Yeah, I was about to get into that.

Wan Gang he's considered the forefather of EVs in China. He was an auto guy working at Audi. He then moved back to China, starts working in Ministry of Science and Technology, becomes also president of a fairly important university in China, and he's the one that is usually attributed with pushing forward this idea of leapfrogging.

To be honest, they weren't actually initially clear on what technology that would be. In fact, many incentives were provided to fuel sell hydrogen vehicles as well. And those went nowhere. It took a little bit of test and trial and it wasn't really clear that this was gonna be a good bet.

It required a lot of money, a lot of waste, a lot of sort of readjustments of policy. Now I would say it's starting to look like that was a pretty good idea on China's side.

CHAKRABARTI: Yeah. So Natalie, this idea that Chinese leaders said, why enter a crowded space, right? Like, why try to compete on the internal combustion engine?

Let's try to develop the next generation of technology for vehicles. They're now like batteries and computers on wheels. Is that the kind of thing that U.S. automakers are trying to embrace or to do? Tell me about where their heads are in terms of the future of just even cars that they're gonna sell.

NEFF: Yeah. Watching the Chinese evolution and their industry evolution. It has been amazing because as Ilaria said, Volkswagen and GM were early entrance into the Chinese auto making space. And for a long time it was a sign of status in China if you owned a Buick, for example. Everything has changed now, and so where the American automakers are looking is, they're still playing with a lot of different technologies, but they have most of their future eggs in the EV basket, just the Chinese automakers.

The problem now is, going back to what Zitong had said earlier, is the Chinese consumer is now very used to all these, what we used to call luxury amenities in their cars. The American consumer is exactly the same expensive taste. We want massaging seats, giant screens, the whole thing.

And to your point, turning cars into kind of computers or cell phones on wheels, the difficulty now is how to match that or even better it at a price point and a livability standpoint. So whereas Zitong was saying some of these cars in China are 22, 25,000. You don't even enter the conversation in the U.S. at under $50,000, which is the average transaction price now, which is crazy.

CHAKRABARTI: Yeah. They have reduced labor costs in China too, but we have just, oh gosh. We're doing shows recently that I wish I had an extra half hour for, but I don't, I have 30 seconds for this last question. I'm sorry. But the United States government right now is absolutely opposed to any kind of technology transfer from China.

A hundred percent Tariffs. We've had representatives in the house say they're gonna hermetically seal the U.S. market, so they'll never see a Chinese EV on the streets of the United States. That sounds like it might play well for the nationalist crowd, but is it further holding back the United States in terms of EVs?

MAZZOCCO: There is definitely this risk that the United States becomes more technologically isolated, especially because Chinese, it's not just about Chinese EVs being exported from China to the rest of the world, which is actually controversial in a lot of countries. But it's that Chinese auto makers are starting to build in other countries.

They're starting to make the open factories. They're starting to partner with other foreign auto makers. And in fact, you're hearing more and more because you said earlier, right? Jim Farley from Ford. There's a lot of interest from companies like Ford and potentially partnering with Chinese firms as well to access that technology.

So we'll have to see how that plays out.

The first draft of this transcript was created by Descript, an AI transcription tool. An On Point producer then thoroughly reviewed, corrected, and reformatted the transcript before publication. The use of this AI tool creates the capacity to provide these transcripts.