On top of that, the US does not have very many lithium or rare earth metal mines or processing facilities relative to our demand.
But it’s hard to deny scale: the US is a populous country. But there are more than ONE BILLION more people in China. It’s foolish for us to expect to stay on the same playing field forever. The economies of scale and innovation you can accomplish with that many people is… a lot.
Part of the idea is that there are cities in China that have really strong positive feedback loops when it comes to developing new, cheap robotics tech. Whereas in the US, it might take weeks to order parts from suppliers in, you guessed it, China. It’s hard to compete with companies that have direct access to the supply chain and skilled workers right across the street, in an industry where lots of iteration and evolution is necessary.
China is huge in area too. You don't have one billion people right across the street. Anything that is across the street is, by definition, a localized thing involving far fewer people, which you can totally have in US+CA+EU too.
Also don't forget tolls / tariffs. Building products that relies on parts from different countries (at least from/to USA) reduces the margins compared to a unified Chinese market.
Visas are a political human construct subject to change, not a immovable force of nature. The same visa keeping workers out, can always be removed or changed over night if desired to achieve the opposite effect: move masses of skilled people in. See operation paperclip.
If you look at historic locations of hyperinnovation there are bunch of different things. One of which is density of the activity and the supply chain. Imagine needing a new gearset for a robot, you roll down to Gear Set Alley looking for a used unit, you hit 4 different robot wrecking yards, explaining to 5 people along the way. They eventually point you over to machine shop that has modified an existing part into exactly what you are looking for.
You can solve in a day what might take you a day, what might take you 20 days, 3x the price and a lead time of weeks. These kinds of hyperfocused, super dense innovation zones have existed in many places across all of time.
This assumes that Gear Set Alley is near you. At >3km you'd go by car and the "meet people on the way" breaks down. At >100km you'd rather call them and miss the wrecking yards and other factories nearby.
In China, Gear Set Alley may easily be 1000km from you. Or it may be <3km from you, if you're lucky. The point is that China, taken as a whole, has no advantage over EU or US in geographical proximity. Certain regions may have that advantage, but that is totally possible in every country on earth (beyond a certain, very tiny minimum size).
Batteries where "uninteresting" so their production was outsourced to Asia. Chinese invested in battery science, engineering and manufacturing. Fast forward a few decades, and here we are.
Now with EVs and energy storage batteries are super interesting, and battery factories are being built in west too - by Asian companies (CATL, LG, Panasonic).
Even Tesla doesn't make their own cells, Panasonic does. Tesla's promised own cells are only in very few Teslas.
How does that work out in practice? Panasonic owns the machines, do they employee and manage their own set of workers in the Tesla factory in Reno? and then Tesla pays Panasonic who pays them, even though they're working right alongside the Tesla employees? How distinct is it, really, when they're in the same factory working side by side?
I would imagine this is most likely a shop in shop scenario, which is rather common in the automotive industry.
Basically, a specialized vendor for a given component is setting up their own production/assembly in your facilities - in some instances even along your assembly line.
The workers operating these machines are usually trained and employed by the supplier.
This setup does have some benefits, like less potential for supply chain disruptions as well as guaranteed capacity. But it is extremely personell intensive and generally requires enormous upfront investments.
As for designing them, this was a good interview with the CEO of CATL pointing to talent pipeline issues. We don't train enough chemical engineers: https://www.youtube.com/watch?v=5VIXjjw4u9A
That was interesting - CATL has 21000 engineers and several hundred PhDs developing batteries and been doing it for 25 years. You can see why it's hard for some western startup like Northvolt to compete with that.
That isn't true for Tesla's 4680 that was briefly in the AWD Model Y and is currently in the Cybertruck. They are well behind the leaders in range and charging, but the company claims that they are competitive with cells from their suppliers on cost. Charging performance is on par with cars like the F-150 Lightning, which also isn't very good.
They are also starting to build their own lfp batteries at a new factory in Nevada, though it sounds like those will be for stationary storage.
a lot of it is probably lack of scale. Tesla is making not that many batteries on the scale of CATL. naziness probably didn't help, nor the fact that Tesla/Musk is fairly famous for working employees way too hard until they burn out.
Thats what im thinking as well. I was concerned when Straubel announced his departure but after reading multiple sources, it seems like the real reason he left was because he was getting bored and wanted to start something new (battery recycling). My hope is that he put a team there to continue onwards. It didn't seem like anyone was panicking when he announced, sounded like it was in the works for a while.
Cybertruck was supposed to have something like 250k yearly right? Are they even getting 30k yearly?
But still...tabless, structural pack, 4680, dry cell these are all things they had in production first right?
BYD Blade is amazing, but its more of a optimizing a mass market LFP cell no? Whereas I am referring to putting cutting edge tech into production.
Yeah, all the employees left and all of Musk's companies are now bankrupt after he visited Israel to visit families of victims of the Hamas terror attacks and he then deliberately did a nazi salute and deliberately ordered an LLM to convert everybody into nazis in an attempt to take over the world.
I don't want to, but I can't stop thinking that DJT might be kind of right on this one. Each of economical blocks in this world such as EU/US, China, or Japan, don't mutually co-depend enough for any foreign currencies like USD or CNY to be single universal representation of values.
The current US administration's weird argument is that the USD values exchanged in inter-national trades must be symmetrical, but if you think about it, the amounts just don't mean anything. Balancing the amount only, like forcing the other party buy tons of American stuffs, won't solve it. The exchanged amounts only fuel philosophical border towns and dependency chains don't penetrate deep into foreign economies. The prices are not manipulated, it's just random.
The US has enough of everything to make batteries, you just can't fight something sold at completely arbitrary prices on economical grounds.
The numbers aren't even relevant as he's obsessing about flows tracked across borders. An awful lot of what the US exports is services and data, not things, and doesn't show up.
Look at that research base that got targeted. Imports: what the scientists need. Exports: science. The latter doesn't show up, it looked like it was hugely "out of balance" despite the only inhabitants being penguins.
In the real world, something's being exported even if you're not tracking it. If there was a large, continuing imbalance the relative values of the currencies would change.
The US is running a persistent current account deficit (and the largest one at that) for 20 years, which is the more relevant metric that includes services & data. This is an undisputed fact by most economists and institutions.
The relative values of currencies aren't changing because the central banks of surplus countries are actively managing capital inflows by buying foreign assets to keep their currency values stable. The Fed is one of the few that don't because they don't have that mandate.
>The current US administration's weird argument is that the USD values exchanged in inter-national trades must be symmetrical,
In Econ 101 going back to Keynes, if you run a persistent current account surplus, the increased demand for your currency to pay for your exports will strengthen your currency, thus reducing the competiveness of your exports, thus reducing your trade surplus. Vice versa for a deficit. Hence persistent trade imabalances should not exist due to self-balancing FX-effects.
This isn't happening in reality for a variety of reasons, but it's common knowledge that it's government policies that directly try to prevent that from occuring. Capital Controls, Protectionist Policies, etc, the most explicit mechanism is the controversial currency manipulation, whereby many central banks manage capital inflows by buying US assets to keep their currency stable.
But the aggregate result of this is that we have a strange situation today whereby the US dollar is simultaneously strong yet running a massive deficit, while surplus countries have weak currencies. And these imbalances are growing rather than shrinking. Many mainstream economists don't think the situtation is sustainable, but their proposals to fix it are differing.
I'd agree that Trump's method of "forcing" other countries to buy more American stuff is just a short-term fix that won't solve the underlying issues, but the real solutions of tariffs, currency revaluations or introducing capital controls will be hard to stomach for everyone, albeit necessary. Although the "correct" solutions like the Bancor will all be much more harmful to surplus countries than the USA.
But countries don't pay for imports with the currency of the producing nation and get their own currency for their exports. They use the USD for that. Econ 101 doesn't apply when you are an international reserve currency because demand is not exclusively tied to exports.
Increasing FX reserves also increases the national currency's strength because the Central Banks has more reserves to prop up it's value. The opposite is what we call a currency crisis when you run out such reserves and the value of your currency falls.
Tesla buys most of their batteries from Japanese and Chinese companies like Panasonic and CATL. Some of those are assembled in factories like the Nevada gigafactory where Panasonic runs part of the factory. They’ve struggled with quality and capacity issues, which I think really just hits the idea that China spent decades on infrastructure and it’ll take similar amounts of time to catch up.
Meanwhile the Chinese Economy has (a dif't set of) infrastructure deficiencies of at least the same magnitude as the US so this world dominationation trip Xi is on is no less egotistically delusional than MAGA such that China needs the US as much as the US needs China. Leaders will always play the violin while the town's aflame.
It's still that way, but a bit less so. The intractable problem now is entire supply chains end to end do not exist in the west. If you wanted to start a battery company you are going to have a really hard time sourcing all your components in-country. All the way down to the inks used in printing the serial number on stuff.
In the end of course it all ends up as a cost, but even if you somehow dropped all environmental standards and set the cost of labor to match China today it would take decades just to get the institutional knowledge and infrastructure back.
No, the cells themselves are fairly standard and built by third parties (Panasonic, LG, CATL), just co-located in Tesla's factories.
The battery packs themselves have been pulled apart and studied by everyone, pretty much all EV manufacturers are doing similar things anyway, so no real special sauce anywhere anymore.
Now there are more mature EV players in the game, innovations are happening from many manufacturers now (not just Tesla leading anymore) and then everyone else converges on the best ideas.
It a glance this feels insane. Batteries are in everything and such a basic need.
How is it possible that buying through known scammers with tons of QA is still cheaper than manufacturing in the West?
Obviously for Tesla it isn't cheaper to buy from China, so why is it thought to be cheaper for the rest of the West? Is it purely scale?