The China Conundrum: What Michigan’s EV Debate Says About America’s Future

In the final weeks of Michigan’s heated 2024 election season, television screens were flooded with ominous political advertisements targeting Chinese automakers like Gotion. One ad claimed that Gotion’s proposed battery factory in Big Rapids was a “Trojan horse” for the Chinese Communist Party (CCP). Another suggested that supporting such investments amounted to treason against American manufacturing. These commercials played on fears of espionage and economic dependency, bolstered by GOP leaders amplifying unsubstantiated claims that the plant could be used to gather intelligence on nearby military installations.

This relentless messaging, part of a $30 million national campaign targeting EV policies, delivered results. Donald Trump flipped Michigan back into the Republican column, and GOP candidate Mike Rogers nearly beat Democrat Elissa Slotkin for an open US Senate seat, running on a platform that painted Chinese EV investments as existential threats to US sovereignty. And GOP congressional candidate Tom Barrett defeated Democrat Curtis Hertel in mid-Michigan District 7, aided by PAC-funded TV advertising that called him a national security threat tied to the Chinese Communist Party.

A short-term win, a long-term disaster?

The political rhetoric worked—but at what cost? Michigan, once the undisputed leader in the global automotive industry, now risks becoming a cautionary tale. Experts warn that demonizing foreign automakers, particularly Chinese ones, could derail the state’s transition to electric vehicles (EVs) and the high-tech jobs that come with it.

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Michigan’s reliance on federal and foreign investment for its EV ambitions is not a flaw but a necessity in an industry undergoing seismic shifts. Gotion’s proposed $2.4-billion investment, bolstered by federal tax incentives, could provide thousands of jobs and secure Michigan’s place in the EV supply chain. Instead, political fearmongering has clouded public perception, with polls showing a majority of Michigan voters oppose further EV-related investments from Chinese companies.

As MichAuto, the statewide automotive advocacy arm of the Detroit Regional Chamber, warned in October 2024, Michigan’s choice is stark: “Our state’s 12 assembly plants will either produce the products that the market demands into the future, or they will not exist.” If the GOP succeeds in its plans to gut EV subsidies, the result could be devastating—auto plants shuttering, jobs evaporating, and Michigan ceding its automotive leadership role to states like Texas or even foreign competitors.

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China’s rise

To be sure, there are real reasons to worry about competition from China. Chinese EVs were initially not considered worth taking seriously as rivals to Tesla and other automakers. In 2011, Tesla CEO Elon Musk was minimizing their importance, citing the lower quality he then saw in EVs from the likes of BYD. But in January of 2024, he warned stockholders that “Chinese car companies are the most competitive car companies in the world. … Frankly, I think if there are not trade barriers established, they will pretty much demolish most other car companies in the world.”

The rapid rise of China's electric vehicle and battery industries has left much of the US industry scrambling to catch up. At The Battery Show North America in Detroit this October, a panel of industry experts provided insights into China's strengths and what American companies can learn from them.

"The Chinese have set the goal of becoming a world car supplier, and they are funding the auto industry to make that happen," said Celena Mikolajczak, chief battery technology officer at Lyten. "That means they're funding batteries, raw materials, even shipbuilding to deliver those cars around the world."

This coordinated, government-backed approach stands in contrast to the more fragmented efforts in the US, where Mikolajczak says the country lacks a clear, overarching goal.

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Gabrielle Coppola, a business reporter at Bloomberg News, has witnessed this firsthand through her reporting in China. "There's so much pride in their achievements [in China]. They've been disrespected by the world, and now it's their time to shine," she said.

Bloomberg News reporter Gabrielle Coppola (l) and Lyten chief battery technology officer Celena Mikolajczak take part in a Battery Show North America panel discussion in Detroit on October 10, 2024. Credit: Battery Show North America

The panelists agreed that the US needs to emulate this long-term, strategic thinking. They stressed that this shift will require overcoming cultural and political obstacles. But if we don’t work together to meet the moment, "there's a real risk we could lose our entire auto industry," warned Mikolajczak.

That risk is exacerbated by political fearmongering and division.

Lessons from Japan in the 1980s

History offers a chilling parallel. In the 1980s, another group of automakers came to the US with justifiable pride in their achievements. They too had initially been disregarded by the world and then found their time to shine. They came from Japan.

In response, American automakers and political leaders targeted Japanese car companies with a mix of economic protectionism and outright xenophobia. Chrysler’s ads under Lee Iacocca framed buying American-made vehicles as a patriotic duty. Sledgehammer-wielding activists smashed Japanese cars in protest, while bumper stickers proclaimed slogans like “Unemployment: Made in Japan.”

The rhetoric escalated into violence, most notably with the 1982 murder of Vincent Chin, a Chinese American mistaken for Japanese. Chin’s killers, frustrated autoworkers, were sentenced only to probation, underscoring how economic anxiety can metastasize into racial hatred.

Vincent Chin, left, was mistaken for Japanese and beaten to death in 1982. At right, his mother, Lillie Chin, breaks down while leaving the attackers' trial in Detroit's City County Building. Credit: Bettmann Archive/Getty Images

The irony is that Japan’s global success was built less on “cheating” and more on innovation in the form of lean manufacturing, higher-quality vehicles, and fuel efficiency. US automakers only regained their footing when they finally adopted these practices themselves. Today, Toyota, Honda, and Nissan remain vital parts of the American auto landscape, employing tens of thousands of US workers. And every one of the the US Big Three automakers adopted some form of lean manufacturing, a set of process- and quality-improvement practices championed in the Toyota Production System.

A stark warning for Michigan & the US

The political demonization of Chinese automakers follows a similar trajectory but carries even higher stakes. China is not only the world’s largest EV market but also its leader in battery technology—a critical component of the transition away from internal combustion engines. If policymakers such as those in Michigan reject Chinese investment, the US risks falling behind as global automakers adapt to a carbon-neutral future.

It’s worth remembering the words of MichAuto’s October report: “To maintain our leadership role as the industry transitions, it will be critical that we lead in the development of new battery technology and that our supplier and assembly plants transition as well.”

Instead of succumbing to fear and nationalism, not only Michigan but the entire US must embrace the reality of a globalized auto industry and, like its competitors in China, work together in a coordinated, government-backed approach. Otherwise, it risks repeating the mistakes of the past—mistakes that could cost it its future.