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China’s car industry has been on a tear lately. Last year, China became the world’s largest auto exporter, and its home-grown carmaker BYD recently eclipsed Tesla as the world’s No. 1 maker of electrified vehicles.
If China were following a playbook first written by Japanese or Korean automakers, you’d expect them to start selling their cars in the United States pretty soon. But China — unlike Japan or South Korea — is not an American ally, and so it’s going to have to follow a different path.
On Thursday, the Biden administration opened an investigation into the national security risks posed by Chinese-made “connected vehicles,” which essentially means any vehicle or any car part that connects to the internet. New cars, especially EVs, are outfitted with cameras, sensors, or cellular modems required for modern safety features.
The probe is the first part of what is likely to be a broad American policy response to the rise of Chinese electric vehicles. “China’s policies could flood our market with its vehicles, posing risks to our national security,” President Joe Biden said in a statement. “I’m not going to let that happen on my watch.”
The investigation is a big deal, in part because it marks that the backlash to Chinese EVs has begun in earnest in the U.S. Look closely and you’ll see Biden’s quote this morning gives away the game: Is the risk that Chinese vehicles flood the market, or is the risk that they’ll harm national security? For this administration, one has the sense that it’s both.
In a press briefing with reporters, Commerce Secretary Gina Rainmondo, whose office will lead the investigation, argued that these sensors and computers could pose a risk to national security.
“Imagine if there were thousands, or hundreds of thousands, of Chinese connected vehicles on American roads that could be immediately and simultaneously disabled by somebody in Beijing,” she said. “It doesn’t take a lot of imagination to figure out how a foreign adversary like China with access to this sort of information at scale could pose a serious risk for national security and the privacy of U.S. citizens.”
It was crucial to launch the investigation now, she added, before Chinese-made vehicles became more prevalent on American roads. Today, only a handful of brands — including Volvo, Polestar, and Buick — sell Chinese-made vehicles in the United States, and no Chinese-originating brand sells cars here.
There are three more things to observe about the sudden American action against Chinese EVs.
First, the administration’s actions aren’t particularly surprising. As I’ve previously written, the rise of Chinese EVs poses an existential threat to the legacy American automakers, including Ford and General Motors. These companies employ four times more workers in Michigan than in any other state, and Biden’s path to reelection runs straight through Michigan this November.
And even though Biden’s climate agenda has been aggressively focused on domestic development — you could argue that the Inflation Reduction Act is as much about national competitiveness as emissions reductions, per se — Donald Trump will claim no matter what that Biden’s climate policy is a “job-killing” gift to China. So Biden has to be especially certain that Chinese-made EVs don’t threaten — can’t even seem like a threat — to the Michigan auto industry.
Democrats, too, are not alone in calling for action against Chinese EV makers. Republicans have already branded Biden’s pro-EV campaign as a giveaway to China. On Wednesday, Senator Josh Hawley, a far-right Missouri Republican, proposed legislation that would raise tariffs on Chinese EVs much higher than their current level — to an astounding 125%. That would exceed the highest tariff rates on the books, and it would also apply the duties to Chinese-branded EVs made anywhere in the world, including in countries that the U.S. has a free-trade agreement with.
Second, the investigation reflects just how difficult it will be for the United States and China to keep from fighting over their highest quality technological exports. Over the past few years, the U.S. has targeted or restricted Huawei devices and the social network TikTok. China has slapped rules on how Apple’s and Tesla’s products can be used.
At Heatmap, we have written frequently about how the effort to deploy green technologies is becoming inseparable from geopolitics. But this fight is over something much broader than zero-carbon technologies — it’s potentially about digitized products, anything with software, which includes electric vehicles and batteries as well as smartphones and gadgets. If the American government now believes that Chinese-made products with cameras or sensors risk U.S. national security, then potentially a whole range of products — robot vacuums, e-bikes, GPS watches, even home appliances — could pose some sort of security risk. Electric vehicles may represent a greater security risk, but the difference between them and, say, phones is one of degrees and not kind.
Finally, the investigation reveals something that canny observers have already noted: Tariffs alone probably can’t keep Chinese-branded EVs out of the American market forever. BYD, the world’s No. 1 seller of electrified vehicles, is planning to open a factory in Mexico; it already sells its cars there. If BYD succeeds in establishing a North American beachhead, then its cars could potentially fall under U.S.-Mexico-Canada Trade Agreement rules and freely enter the United States. (The Hawley bill would theoretically circumvent this by applying its tariffs to Chinese-branded vehicles wherever they are made. Whether this would actually be worth the rift it would open with one of our most important manufacturing partners is an open question.)
Those vehicles could rapidly become the most affordable new cars on the road — if not in the United States itself, then in Mexico and Canada, where American brands compete. BYD recently advertised an $11,000 plug-in hybrid targeted at the Chinese market. Even if meeting American highway safety regulations added another $4,000 to that vehicle’s cost, it would still be among the cheapest new cars sold in this country. Even doubling its price with tariffs would keep it firmly among the country’s most affordable new vehicles.
That could be good. Electric vehicles need to get cheaper everywhere, including the U.S., if we are to fight climate change. Likewise, the Commerce Department’s investigation could result in a happy outcome, by which the national security and privacy risks of Chinese EVs could be managed — through software, for instance — allowing BYD or Polestar to sell some cars here without exposing Americans to significant risk. But that’s not the the direction that I expect things to take.
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Did a battery plant disaster in California spark a PR crisis on the East Coast?
Battery fire fears are fomenting a storage backlash in New York City – and it risks turning into fresh PR hell for the industry.
Aggrieved neighbors, anti-BESS activists, and Republican politicians are galvanizing more opposition to battery storage in pockets of the five boroughs where development is actually happening, capturing rapt attention from other residents as well as members of the media. In Staten Island, a petition against a NineDot Energy battery project has received more than 1,300 signatures in a little over two months. Two weeks ago, advocates – backed by representatives of local politicians including Rep. Nicole Mallitokis – swarmed a public meeting on the project, getting a local community board to vote unanimously against the project.
According to Heatmap Pro’s proprietary modeling of local opinion around battery storage, there are likely twice as many strong opponents than strong supporters in the area:
Heatmap Pro
Yesterday, leaders in the Queens community of Hempstead enacted a year-long ban on BESS for at least a year after GOP Rep. Anthony D’Esposito, other local politicians, and a slew of aggrieved residents testified in favor of a moratorium. The day before, officials in the Long Island town of Southampton said at a public meeting they were ready to extend their battery storage ban until they enshrined a more restrictive development code – even as many energy companies testified against doing so, including NineDot and solar plus storage developer Key Capture Energy. Yonkers also recently extended its own battery moratorium.
This flurry of activity follows the Moss Landing battery plant fire in California, a rather exceptional event caused by tech that was extremely old and a battery chemistry that is no longer popular in the sector. But opponents of battery storage don’t care – they’re telling their friends to stop the community from becoming the next Moss Landing. The longer this goes on without a fulsome, strident response from the industry, the more communities may rally against them. Making matters even worse, as I explained in The Fight earlier this year, we’re seeing battery fire concerns impact solar projects too.
“This is a huge problem for solar. If [fires] start regularly happening, communities are going to say hey, you can’t put that there,” Derek Chase, CEO of battery fire smoke detection tech company OnSight Technologies, told me at Intersolar this week. “It’s going to be really detrimental.”
I’ve long worried New York City in particular may be a powder keg for the battery storage sector given its omnipresence as a popular media environment. If it happens in New York, the rest of the world learns about it.
I feel like the power of the New York media environment is not lost on Staten Island borough president Vito Fossella, a de facto leader of the anti-BESS movement in the boroughs. Last fall I interviewed Fossella, whose rhetorical strategy often leans on painting Staten Island as an overburdened community. (At least 13 battery storage projects have been in the works in Staten Island according to recent reporting. Fossella claims that is far more than any amount proposed elsewhere in the city.) He often points to battery blazes that happen elsewhere in the country, as well as fears about lithium-ion scooters that have caught fire. His goal is to enact very large setback distance requirements for battery storage, at a minimum.
“You can still put them throughout the city but you can’t put them next to people’s homes – what happens if one of these goes on fire next to a gas station,” he told me at the time, chalking the wider city government’s reluctance to capitulate on batteries to a “political problem.”
Well, I’m going to hold my breath for the real political problem in waiting – the inevitable backlash that happens when Mallitokis, D’Esposito, and others take this fight to Congress and the national stage. I bet that’s probably why American Clean Power just sent me a notice for a press briefing on battery safety next week …
And more of the week’s top conflicts around renewable energy.
1. Queen Anne’s County, Maryland – They really don’t want you to sign a solar lease out in the rural parts of this otherwise very pro-renewables state.
2. Logan County, Ohio – Staff for the Ohio Power Siting Board have recommended it reject Open Road Renewables’ Grange Solar agrivoltaics project.
3. Bandera County, Texas – On a slightly brighter note for solar, it appears that Pine Gate Renewables’ Rio Lago solar project might just be safe from county restrictions.
Here’s what else we’re watching…
In Illinois, Armoracia Solar is struggling to get necessary permits from Madison County.
In Kentucky, the mayor of Lexington is getting into a public spat with East Kentucky Power Cooperative over solar.
In Michigan, Livingston County is now backing the legal challenge to Michigan’s state permitting primacy law.
On the week’s top news around renewable energy policy.
1. IRA funding freeze update – Money is starting to get out the door, finally: the EPA unfroze most of its climate grant funding it had paused after Trump entered office.
2. Scalpel vs. sledgehammer – House Speaker Mike Johnson signaled Republicans in Congress may take a broader approach to repealing the Inflation Reduction Act than previously expected in tax talks.
3. Endangerment in danger – The EPA is reportedly urging the White House to back reversing its 2009 “endangerment” finding on air pollutants and climate change, a linchpin in the agency’s overall CO2 and climate regulatory scheme.