China is doing moon shots. Yes, that’s plural. When I
say “moon shots” I mean big, multibillion-dollar,
25-year-horizon, game-changing investments. China has at
least four going now: one is building a network of
ultramodern airports; another is building a web of
high-speed trains connecting major cities; a third is in
bioscience, where the Beijing Genomics Institute this
year ordered 128 DNA sequencers — from America — giving
China the largest number in the world in one institute
to launch its own stem cell/genetic engineering
industry; and, finally, Beijing just announced that it
was providing $15 billion in seed money for the
country’s leading auto and battery companies to create
an electric car industry, starting in 20 pilot cities.
In essence, China Inc. just named its dream team of
16-state-owned enterprises to move China off oil and
into the next industrial growth engine: electric cars.
Not to worry. America today also has its own
multibillion-dollar, 25-year-horizon, game-changing moon
shot: fixing Afghanistan.
This contrast is not good. I was recently at a
Washington Nationals baseball game. While waiting for a
hot dog, I overheard the conversation behind me. A
management consultant for a big national firm was
telling his colleagues that his job was to “market
products to the Department of Homeland Security.” I
thought to myself: “Oh, my! Inventing studies about
terrorist threats and selling them to the U.S.
government, is that an industry now?”
We’re out of balance — the balance between security and
prosperity. We need to be in a race with China, not just
Al Qaeda. Let’s start with electric cars.
The electric car industry is pivotal for three reasons,
argues Shai Agassi, the C.E.O. of Better Place, a global
electric car company that next year will begin operating
national electric car networks in Israel and Denmark.
First, the auto industry was the foundation for
America’s manufacturing middle class. Second, the
country that replaces gasoline-powered vehicles with
electric-powered vehicles — in an age of steadily rising
oil prices and steadily falling battery prices — will
have a huge cost advantage and independence from
imported oil. Third, electric cars are full of power
electronics and software. “Think of the applications
industry that will be spun out from electric cars,” says
Agassi. It will be the iPhone on steroids.
Europe is using $7-a-gallon gasoline to stimulate the
market for electric cars; China is using $5-a-gallon and
naming electric cars as one of the industrial pillars
for its five-year growth plan. And America? President
Obama has directed stimulus money at electric cars, but
he is unwilling to do the one thing that would create
the sustained consumer pull required to grow an electric
car industry here: raise taxes on gasoline. Price
matters. Sure, the Moore’s Law of electric cars — “the
cost per mile of the electric car battery will be cut in
half every 18 months” — will steadily drive the cost
down, says Agassi, but only once we get scale production
going. U.S. companies can do that on their own or in
collaboration with Chinese ones. But God save us if we
don’t do it at all.
Two weeks ago, I visited the Coda Automotive battery
facility in Tianjin, China — a joint venture between
U.S. innovators and investors, China’s Lishen battery
company and China National Offshore Oil Company. Yes,
China’s oil company is using profits to develop
batteries.
Kevin Czinger, Coda’s C.E.O., who drove me around
Manhattan in his company’s soon-to-be-in-production
electric car last week, laid out what is going on. The
backbone of the modern U.S. economy was locally made
cars powered by locally produced oil. It started us on a
huge growth spurt. In recent decades, though, that
industry was supplanted by foreign-made cars run on
foreign oil, so “now every time we buy a car we’re
exporting $15,000 of capital, paying for it with
borrowed money and running it on foreign energy
sources,” says Czinger. “We’ve gone from autos being a
middle-class-making-machine to a
middle-class-destroying-machine.” A U.S. electric
car/battery industry would reverse that.
The Coda, 14,000 of which will be on the road in
California over the next year and can travel 100 miles
on one overnight charge, is a combination of
Chinese-made batteries and complex American-system
electronics — all final-assembled in Oakland (price:
$37,000). It is a win-win start-up for both countries.
If we both now create the market incentives for
consumers to buy electric cars, and the plug-in
infrastructure for people to drive them everywhere, it
will be a win-win moon shot for both countries. The
electric car industry will flourish in the U.S. and
China, and together we’ll tackle the next challenge:
using auto battery innovations to build big storage
batteries for wind and solar. However, if only China
puts the gasoline prices and infrastructure in place,
the industry will gravitate there. It will be a moon
shot for them, a hobby for us, and you’ll import your
new electric car from China just like you’re now
importing your oil from Saudi Arabia
