Rick Lazio: We’ve lost an auto race before, China’s EV climb should worry us

Tesla's newly unveiled Roadster is a reminder that America can still produce breakthroughs that capture the world's imagination. The car can accelerate from zero-60 in less than a second and perform feats that once belonged in science fiction.

The engineering is thrilling. Give Tesla an A for design innovation. The harder question is whether it can commercialize even the base Performance model. It includes the fan-powered suction system but none of the thrusters behind the Roadster's headline-grabbing acceleration or airborne maneuvers. Or will Chinese manufacturers use their state-supported supply chains and generous R&D incentives to make comparable technology affordable first?

Chinese automakers are already gaining ground in Britain with vehicles that combine advanced technology and aggressive pricing. The Jaecoo 7, a Chinese-built SUV nicknamed the "Temu Range Rover," became Britain's best-selling new vehicle in September . Chinese brands captured nearly a quarter of the country's new-car market that month.

American ingenuity is not the problem. The challenge is converting it into affordable products at scale, something China has become remarkably effective at doing. The next auto race will be decided by which country can excel at both.

Americans have been largely shielded from direct competition with Chinese automakers. The United States imposed a 100% Section 301 tariff on Chinese electric vehicles in 2024, effectively closing the market to them. The policy sought to prevent the heavily subsidized vehicles from undercutting domestic production.

The rationale is understandable. American companies operating in a market economy cannot compete on equal terms with a state-directed industrial system. China spent years supporting battery production and vehicle manufacturing, giving its automakers advantages that tariffs are meant to counter.

The problem is, protection alone cannot make an American factory more productive, lower the cost of a battery, or bring a better vehicle to market.

American automakers have learned this lesson once already.

During the 1970s and 1980s, Japanese competitors won over American consumers with better fuel economy and higher quality. They also found more efficient ways to build cars. But American companies were slow to respond. One recent analysis estimates that the Big Three took between 10 and 15 years to catch up with Japanese advances in production efficiency .

Policymakers recognized that American companies needed a stronger reason to invest in innovation. Congress responded in 1981 by creating the federal research and development tax credit amid concern about declining private-sector R&D spending and U.S. competitiveness. The same principle applies today. New discoveries matter only if companies have the incentive and capital to bring them to market.