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.====================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. 

Europe wants to go green in a hurry. China has EVs to help Europe achieve their goal faster. What's the problem? The problem is that too many Chinese cars are flooding into France, Germany and Italy And that is putting enormous pressure on Europe's auto industry. Making things worse, European brands' sales are skidding in China, which used to be their forever profit machines.  VW is now talking about closing three plants and laying off tens of thousands. And we are not even in a recession. Joining me to make sense of the pressure - he calls it a schism - is Roger Atkins, founder of Electric Vehicles Outlook. How will Europe see things through from here? Roger will also share what he loves and what he loves much less about driving his all-electric  ID Buzz, the retro bus from VW. Along the way, we will also learn how to say sh-t-show in Chinese. Yes, I promise you there is such a word. 

One of the most significant limiters to EV adoption in America is the dreaded charging experience. Where do I find the nearest station? Wil, the chargers work? Do I need an app? Will I be safe sitting alone in my car for thirty minutes? Who can I call if things go wrong? In this episode, we learn from Christopher Balcom of Schneider Electric that improvements are on the way. Specifically,  the mission  is to simplify the charging experience by bringing several separate parts - the hardware, the software, the installer and the carmakers – together to form a seamless experience. 

Dr. Daniel Sperling is one of the world's leading experts on electric vehicles. His knowledge runs very deep. Dr. Sperling founded the Institute of Transportation Studies at the University of California, Davis. He has written 13 books, including Two Billion Cars, and published 250 papers. Governor Arnold Schwarzenegger appointed him to the powerful California Air Resources Board, a position he held for 13 years.  Dr Sperling has also built a deep understanding of China's EV industry.  In this episode we talk about his work at CARB, China's ambitions, interactions with Elon Musk and how demand for electric vehicles will continue to vary by state and by country for the next decade. Dr Sperling also offers some practical advice to people who are on the fence about EVs.

Here is a candidate for the single most important development in the global auto industry this year: One of every two new cars sold in China this year will be electric. Half! In the US and Europe, we are experiencing a kind of EV wheel spin. EVs as a share of total sales in America still hover under 10%. Europe is a bit higher at 15%, but the pace of growth has slowed dramatically. Why is EV demand growing so much faster in China than in the West?  One big factor is the cost of batteries. That is where China enjoys a massive advantage. But the game is not over. Startups in the West, like OneD Battery Sciences, are developing better battery chemistries that deliver higher energy density at lower costs. What are they working on? How soon will we see breakthrough batteries? And how might the US electric change the landscape? To get answers, listen to Vincent Pluvinage and K.T. Neumann.