Does Your Theory of China Explain Tesla's Bullishness on China?

The upshot: There’s no foreseeable version of the future where the US can break Chinese centrality to webs of financial and trade interdependence without destroying us all.

If you know me at all you know I’m not a fan of Tesla or Elon Musk. Oligarchs are bad for democracy, and Teslas are good but so are the many brands of electric vehicles that don’t have an elevated cultural status on the right.

I say that as preface to this FT story about Tesla building a new factory in Shanghai for “Megabuck energy storage systems.” Ignoring Washington’s bipartisan vibe of doom when it comes to China, Tesla:

expects the factory to produce about 10,000 Megapack units a year — equivalent to about 40 gigawatt hours of energy storage — reflecting Musk’s decision to deepen engagement with China just as his car business struggles to fend off growing competition from Chinese rivals.

This choice, in the context of the historical conjuncture we’re all living through, is illuminating the terrain on which strategy operates. It’s telling us by inference some important things about Asian political economy, and we ignore or misperceive that at our peril.

In the same way that there’s no way to “win” a war against China without accepting nuclear war, there’s no way to build precious green America-first manufacturing capacity in renewables without sustained, long-term inputs from China.

Three specific things worth pointing out here…