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
