Driving with Dunne

It is hard for Americans to imagine not being No. 1. The US has been the leading industrial, economic and military power since the end of WWII. But now America confronts a challenger that appears to be bigger, faster and more ambitious. That challenger is China. The PRC now manufactures one third of the world's cars, sixty percent of EVs, seventy percent of batteries and utterly dominates battery supply chains. How did Chinese companies get so powerful so quickly? What can America and the West learn from China's rapid ascendancy? And what can we do to compete going forward?  Joining me today on the Driving wWith Dunne podcast is Kyle Chan, author of the widely read and highly respected newsletter, High Capacity. Kyle reveals China's secret superpowers – many of which might appear surprisingly ordinary. But they're not. 

How do we begin to get our minds around the global blitz of tariffs unleashed by the Trump Administration. Is it madness or is there a method to the madness? One thing is certain: Donald Trump has definitely captured the attention of  leaders in Asia, Europe, Mexico and Canada. They are trying to come to terms with arguably the greatest economic and trade shock in decades. Joining us today is Wendy, Cutler, one of the most skilled negotiators on the planet. She knows trade, she knows tariffs and she has more than 30 years of experience negotiating trade deals. I ask Wendy to talk us through the current state of trade and tariffs, what she thinks President Trump is trying to get done and how this great tariff blitz is likely to land. Let's just say she is not brimming with optimism. But she does have some advice for White House -  if the phone rings.

When it comes to China, most Americans are mostly in the dark. Don't believe me? Just quiz your friends. Ask them to name the five largest cities in China. Or to tell you the difference between people in Fujian and Sichuan, or Beijing and Guangzhou? Or how many cars China exported last year.  Is China's economy booming on the back of record exports or reeling from a property meltdown and tanking consumer confidence? How many of us can say we know for sure. How many of us are in regular communication with people in China? Here to fill the void is Emily Feng, author of a tremendous new book called Let Only Red Flowers Bloom. Ms Feng brings to life the joys and sorrows, advances and setbacks of ordinary people in China. And she explains why, under Xi Jinping, people are encouraged to bloom red. 

When it comes to EVs, people seem to embrace one of two schools of thought. In school one, electric vehicles may have a role to play but that role is limited. Manufacturers should not be required to build them. And citizens should not be required to pay taxes to subsidize purchase of EVs. In school two, the belief is that electric vehicles are, without a doubt, the future. By 2040 the vast majority of all new vehicles will be propelled by motors driven with energy from batteries. Which school has it right? Enter our special guest today, Mike Colias, author of a tremendous new book called InEVitable: Inside the Messy Unstoppable Transition to Electrics.  Mr. Colias has covered the automotive business for the Wall Street Journal for more than ten years. In this episode he gives us a view on what makes building EVs and batteries so hard for the Detroit Three. Who among the Detroit Three is doing the best job? Who is falling behind? And how might America's commitment to EVs change under the Trump Administration?

Chinese leaders believe overcapacity across industries including automotive is a cyclical problem that fresh growth will solve. Foreign investors with experience in the PRC see things differently. To them, overcapacity is a direct result of China's planned economy. Not only does massive overcapacity spark price wars inside China, it also threatens to spur an avalanche of exports into markets worldwide, undermining industries and killing jobs. Joerg Wuttke led the China operations of BASF, the German chemical giant for 27 years. Mr Wuttke  knows China like few people on the planet. In the summer of 2024, he became a partner at the Albright Stonebridge Group based in Washington DC. Mr Wuttke is considered one of the world's leading experts on Europe-China trade and investments. Today, we talk about what Mr Wuttke calls China's "breaking point" when it comes to overcapacity. How soon will it arrive? What will it look like?

We're trying something a little different this week! Michael Dunne recently appeared as a guest on the podcast FACE-OFF: The U.S. vs. China, where he had an insightful and engaging conversation with host Jane Perlez. He enjoyed the discussion so much that he wanted to share it with you. The description below is from the FACE-OFF podcast.

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Back in 2015 the Chinese government declared that they would become the world leader in EVs by 2025. Major car companies scoffed. Who wants an EV? Today, China automakers have surpassed Japan, Germany and the US to become the number one exporter of cars. A record number of Chinese EVs were sold globally last year. How did China become the global leader in EVs? We’ll talk with the man who literally wrote the book on the rise of China’s car industry. 

Guest: Michael Dunne, Auto executive in China and the US, author American Wheels, Chinese Roads.  

Book Recommendations: Michael Dunne’s new book expected mid-2025.Power Play: Tesla, Elon Musk and the Bet of the Century by Tim Higgins.

Alex Roy and his co-pilots recently made two historic coast to coast trips - California to New York -  in his brand new Model S. Their mission: Measure the efficiency and safety of the Tesla FSD system. How close was Tesla to mastering full autonomy? Roy and Team use two key metrics. The first is the total number of disengagements – whether voluntary or involuntary. The second: How quickly could the system recover after a disengagement?  Roy, who previously set the Electric Car Cannonball record in his Tesla, has now turned his focus to autonomous driving. His central question: How soon will cars be able to drive themselves coast to coast allowing us to take a nap in the back seat?  I first met Alex Roy in 2018 at a private industry event south of Munich. He's one of a kind - colorful, smart and professional. You will enjoy his vivid first-hand account of the cannonball runs, both the triumphs and  the reversals - like the time the team encountered a good old-fashioned midwestern thunderstorm in Indiana. How exactly did The Model S and the FSD system respond to that crush of water? Alex Roy, partner, New Industry Venture Capital on the Driving With Dunne podcast.

What are the industrial crown jewels of the future? Most of us can name two of them right away: Chips that power the brains behind everything, including AI. And batteries or energy storage systems. Batteries power not only EVs but have a much wider application in delivering energy to factories and countless military applications. There is a third one that might be just as crucial: magnets. Magnets are produced with materials derived from the processing of rare earths. Today, China has an abundance of rare earths. More importantly, China has a near monopoly on the processing of those rare earths. This leaves America and the West highly vulnerable. That's where an American company called Evolution comes in - their mission is to build complete processing capabilities in America for American industry.  Joining me today to talk about the rare earth processing and magnet challenge is Dean Evans, co-founder at Evolution. They are already operating in Missouri and have sister companies in Korea. What's the central challenge and how soon will America be able to process rare earths and build its own magnets at scale? 

What can we say for sure about China? Many of us can rattle off some incredible statistics.  It is a manufacturing and technology powerhouse. China ran up an astonishing $1 trillion dollar surplus in 2024. China builds more EVs than all other countries combined. And China has enough capacity to supply total global demand for batteries. We know these facts. But what we know much less well is how to engage with Chinese business people in a productive way that leads to successful outcomes. That's been a giant black hole for many Western business people. Fortunately, a giant dose of help is on the way in the form of a tremendous new book by Ken Wilcox called The Chinese Business Conundrum: Ensuring Win-Win Doesn't Mean Western Companies Twice. Mr Wilcox, the former CEO of Silicon Valley Bank, also ran SVB's joint venture bank in China. He shares extremely valuable inside views of realities on the ground.

Europe's aim is to become a global leader in adopting next generation clean technologies. In the first phase, beginning in 2020, the focus was on meeting ambitious emission reductions goals. Four years later, the European Commission is making an important adjustment to its strategy. The new goal is to have Europe be a global leader in adopting and producing those technologies.  They call it the Clean Industrial Deal. Some background: Up until very recently, Europe's climate goals were met by sourcing many advanced clean energy technologies from China, including solar panels and electric vehicles. European leaders quickly understood that it would be far better for companies within Europe to produce the clean technologies than to import them from China or other countries. Joining us today to walk us through the new era is Barbara Glowacka of the EU Commission. She advises leaders at the highest levels of power in the European Commission on energy and law.