layout: true <!-- this adds the link footer to all slides, depends on my-footer class in css--> <div class="footer-small"> <span> © John Paul Helveston, The George Washington University, June 2025 </span> </div> --- background-image: url("images/blue.jpg") background-size: cover class: inverse <br><br><br><br> ## Clean Tech and Trade in an<br>Era of Nationalism <br><br><br><br> **.white[John Paul Helveston]**, George Washington University Snowmass 2025 --- class: middle, center, inverse # New Political Reality: <br> # Nationalism > Globalization ## (Security > Efficiency) --- ## .center[Manufacturing job loss (~5M since 2000)] - Long term economic transition towards services - "Hollowing out" of US industrial base <center> <img src="images/manufacturing_employment.png" width=65%> </center> https://en.wikipedia.org/wiki/Manufacturing_in_the_United_States --- ## .center[Rise Chinese dominance in clean tech supply chains] .leftcol[ #### .center[EV battery supply chain] <center> <img src="images/battery-supply-chain.png" width=100%> </center> .font80[Cheng, Anthony L., et al. "Electric vehicle battery chemistry affects supply chain disruption vulnerabilities." Nature Communications 15.1 (2024): 2143.] ] .rightcol[ #### .center[Solar module supply chain] <center> <img src="images/solar-supply-chain.png" width=100%> </center> .font80[IEA Special report 2022: Solar PV Global Supply Chains, https://www.iea.org/reports/solar-pv-global-supply-chains] ] --- # .center[**Bipartisan goal**: The US needs to counter China's lead in clean energy tech] <br> -- ## **Keep Chinese clean tech out of US market**: Steep tariffs on imported Chinese EVs, batteries, PV modules -- ## **Keep Chinese firms out of US clean tech supply chains**: IRA restrictions on EV subsidy elligiblity, stricter Foreign Entities of Concern (FEOC) rules --- # .center[Countering China by Investing in Manufacturing] <br> ## **IRA Strategy**: Investing in *manufacturing* will lead to enduring support for clean tech through local jobs & economic benefits <br> -- ## ...strategy hasn't entirely worked 😔<br>(2 years wasn't enough time) --- class: inverse, middle, center # Solar PV --- class: center, middle ### Shift from China to SE Asia (Transhipment) <center> <img src="images/solar-imports.png" width=84%> </center> .font80[Source: https://www.reuters.com/graphics/USA-CHINA/SOLAR-HISTORY/gdpzkdeqlvw/] --- # We need diversification <br> ## China has enough solar PV capacity to meet annual global demand through 2032. Source: Wood Mackenzie, https://www.reuters.com/world/china/china-will-dominate-solar-supply-chain-years-wood-mackenzie-2023-11-07/ -- <br> ## But do we need _onshoring_? --- ## Solar PV ### Total available U.S. federal subsidies: $0.16 / W ### Average U.S. module price (Q1 2024): $0.33 / W <br><br><br><br> Sources: - https://www.nrel.gov/docs/fy24osti/91209.pdf - Michael Davidson, “U.S.-China Clean Energy Race: Accelerating Innovation, Manufacturing and Adoption”, https://web.sas.upenn.edu/future-of-us-china-relations/climate-and-environment/ --- ## Solar PV ### Total available U.S. federal subsidies: $0.16 / W ### Average U.S. module price (Q1 2024): $0.33 / W ### Average cost of production in China: **$0.10 / W** <br><br> Sources: - https://www.nrel.gov/docs/fy24osti/91209.pdf - Michael Davidson, “U.S.-China Clean Energy Race: Accelerating Innovation, Manufacturing and Adoption”, https://web.sas.upenn.edu/future-of-us-china-relations/climate-and-environment/ --- ## Solar PV ### Total available U.S. federal subsidies: $0.16 / W ### Average U.S. module price (Q1 2024): $0.33 / W ### Average cost of production in China: $0.10 / W ### **Risk: U.S. producers unlikely to be globally competitive** Sources: - https://www.nrel.gov/docs/fy24osti/91209.pdf - Michael Davidson, “U.S.-China Clean Energy Race: Accelerating Innovation, Manufacturing and Adoption”, https://web.sas.upenn.edu/future-of-us-china-relations/climate-and-environment/ --- background-color: #fff ## Solar unlikely to produce desired # of manufacturing jobs .leftcol70[ <center> <img src="images/solar-jobs.png" width=100%> </center> ] .rightcol30[ ### Installation and project development accounts for 2/3 of solar jobs. ### **Manufacturing is 12% of solar jobs** .footer[https://irecusa.org/census-solar-job-trends/] ] --- class: middle background-color: #FFFFFF <center> <img src="images/cost-historical.png" width=100%> </center> **Higher prices in 2020**: - 54% higher in China ($387 versus $250 per kW) - 83% in higher Germany ($652 versus $357 per kW) - 107% higher in the U.S. ($877 versus $424 per kW) --- class: middle, center background-color: #FFFFFF ### **Total savings from global supply chains: $67 B ($50 - $84 B)** <center> <img src="images/savings-historical.png" width=100%> </center> .left[Helveston, J.P., He, G., & Davidson, M.R. (2022) “Quantifying the cost savings of global solar photovoltaic supply chains” _Nature_. 612 (7938), pg. 83-87. DOI: [10.1038/s41586-022-05316-6](https://doi.org/10.1038/s41586-022-05316-6)] --- class: inverse, middle, center # Electric Vehicles --- background-color: #fff <center> <img src="images/annual-sales.png" width=78%> </center> --- background-color: #fff ## .center[EV sales in US reaching ~10% of sales] <center> <img src="images/ev-sales-us.png" width=75%> </center> .font80[Source: Argonne National Lab, https://www.anl.gov/ev-facts/model-sales] --- class: center .leftcol70[ <center> <img src="images/ev-price-slope-edit.png" width=100%> </center> .font70[Source: https://www.iea.org/reports/global-ev-outlook-2024/executive-summary] ] .rightcol30[ ### The EV sector has an affordability problem<br>(except in China) ] --- class: center ### China offers more affordable BEVs across all range categories <center> <img src="images/range-price-us-china-class-2024-us.png" width=100%> </center> Data scraped from autocango.com (China) and carsheet.io (USA) --- class: center ### China offers more affordable BEVs across all range categories <center> <img src="images/range-price-us-china-class-2024-both.png" width=100%> </center> Data scraped from autocango.com (China) and carsheet.io (USA) --- class: center ### China offers more affordable BEVs across all range categories <center> <img src="images/range-price-us-china-class-2024-labels-edit.png" width=100%> </center> Data scraped from autocango.com (China) and carsheet.io (USA) --- background-image: url("images/top-four-1.png") background-size: cover --- background-image: url("images/top-four-2.png") background-size: cover --- ## .center[**Opportunities**] .leftcol[ ## Chinese FDI into U.S. ### **Gotion batteries**: Multi-billion dollar investments in Illinois and Michigan ### **Challenge**: Uncertainty around Foreign Entities of Concern (FEOC) status ] -- .rightcol[ ## Technology Licensing Agreements ### **Ford-CATL**: Licensing battery technology in a Michigan plant ### **Challenge**: CATL was recently added to DOD's list of “Chinese military companies” ] --- class: center, middle, inverse # Using vehicle listings to<br>quantify EV market development --- class: center, middle <center> <img src="images/table_listings.png" width=80%> </center> --- class: center background-color: #fff ## BEVs are driven significantly less than other powertrains <center> <img src="images/mileage-all.png" width=100%> </center> .font80[Roberson, Laura A., Pantha, S., & Helveston, J.P. (2024) “Battery-Powered Bargains? Assessing Electric Vehicle Resale Value in the United States” _Environmental Research Letters_ DOI: [10.1088/1748-9326/ad3fce](https://doi.org/10.1088/1748-9326/ad3fce)] --- ## BEVs & PHEVs are depreciating worse than CVs and HEVs ### (Except Tesla) <center> <img src="images/depreciation.png" width=100%> </center> .font80[Zhao, L., Ottinger, E., Yip, A., & Helveston, J.P. (2023) “Quantifying electric vehicle mileage in the United States” _Joule._ 7, 1–15. DOI: [10.1016/j.joule.2023.09.015](https://doi.org/10.1016/j.joule.2023.09.015)] --- class: center background-color: #fff ## BEVs Concentrated in High-Price Segments in US **Only 1.2% of new and 3.5% of used listings under $40,000 were BEVs in 2024** <center> <img src="images/bev_percent_listings_edit.png" width=100%> </center> --- background-image: url("images/map.png") background-size: cover --- class: inverse background-image: url("images/blue.jpg") background-size: cover <br> # Thanks! <br> ### <span class="white-text">https://jhelvy.com/slides</span> <style> .white-text a { color: white !important; } </style> .footer-large[.white[.right[ @jhelvy.bsky.social <svg aria-hidden="true" role="img" viewBox="0 0 576 512" style="height:1em;width:1.12em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:white;overflow:visible;position:relative;"><path d="M407.8 294.7c-3.3-.4-6.7-.8-10-1.3c3.4 .4 6.7 .9 10 1.3zM288 227.1C261.9 176.4 190.9 81.9 124.9 35.3C61.6-9.4 37.5-1.7 21.6 5.5C3.3 13.8 0 41.9 0 58.4S9.1 194 15 213.9c19.5 65.7 89.1 87.9 153.2 80.7c3.3-.5 6.6-.9 10-1.4c-3.3 .5-6.6 1-10 1.4C74.3 308.6-9.1 342.8 100.3 464.5C220.6 589.1 265.1 437.8 288 361.1c22.9 76.7 49.2 222.5 185.6 103.4c102.4-103.4 28.1-156-65.8-169.9c-3.3-.4-6.7-.8-10-1.3c3.4 .4 6.7 .9 10 1.3c64.1 7.1 133.6-15.1 153.2-80.7C566.9 194 576 75 576 58.4s-3.3-44.7-21.6-52.9c-15.8-7.1-40-14.9-103.2 29.8C385.1 81.9 314.1 176.4 288 227.1z"/></svg><br> @jhelvy <svg aria-hidden="true" role="img" viewBox="0 0 496 512" style="height:1em;width:0.97em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:white;overflow:visible;position:relative;"><path d="M165.9 397.4c0 2-2.3 3.6-5.2 3.6-3.3.3-5.6-1.3-5.6-3.6 0-2 2.3-3.6 5.2-3.6 3-.3 5.6 1.3 5.6 3.6zm-31.1-4.5c-.7 2 1.3 4.3 4.3 4.9 2.6 1 5.6 0 6.2-2s-1.3-4.3-4.3-5.2c-2.6-.7-5.5.3-6.2 2.3zm44.2-1.7c-2.9.7-4.9 2.6-4.6 4.9.3 2 2.9 3.3 5.9 2.6 2.9-.7 4.9-2.6 4.6-4.6-.3-1.9-3-3.2-5.9-2.9zM244.8 8C106.1 8 0 113.3 0 252c0 110.9 69.8 205.8 169.5 239.2 12.8 2.3 17.3-5.6 17.3-12.1 0-6.2-.3-40.4-.3-61.4 0 0-70 15-84.7-29.8 0 0-11.4-29.1-27.8-36.6 0 0-22.9-15.7 1.6-15.4 0 0 24.9 2 38.6 25.8 21.9 38.6 58.6 27.5 72.9 20.9 2.3-16 8.8-27.1 16-33.7-55.9-6.2-112.3-14.3-112.3-110.5 0-27.5 7.6-41.3 23.6-58.9-2.6-6.5-11.1-33.3 2.6-67.9 20.9-6.5 69 27 69 27 20-5.6 41.5-8.5 62.8-8.5s42.8 2.9 62.8 8.5c0 0 48.1-33.6 69-27 13.7 34.7 5.2 61.4 2.6 67.9 16 17.7 25.8 31.5 25.8 58.9 0 96.5-58.9 104.2-114.8 110.5 9.2 7.9 17 22.9 17 46.4 0 33.7-.3 75.4-.3 83.6 0 6.5 4.6 14.4 17.3 12.1C428.2 457.8 496 362.9 496 252 496 113.3 383.5 8 244.8 8zM97.2 352.9c-1.3 1-1 3.3.7 5.2 1.6 1.6 3.9 2.3 5.2 1 1.3-1 1-3.3-.7-5.2-1.6-1.6-3.9-2.3-5.2-1zm-10.8-8.1c-.7 1.3.3 2.9 2.3 3.9 1.6 1 3.6.7 4.3-.7.7-1.3-.3-2.9-2.3-3.9-2-.6-3.6-.3-4.3.7zm32.4 35.6c-1.6 1.3-1 4.3 1.3 6.2 2.3 2.3 5.2 2.6 6.5 1 1.3-1.3.7-4.3-1.3-6.2-2.2-2.3-5.2-2.6-6.5-1zm-11.4-14.7c-1.6 1-1.6 3.6 0 5.9 1.6 2.3 4.3 3.3 5.6 2.3 1.6-1.3 1.6-3.9 0-6.2-1.4-2.3-4-3.3-5.6-2z"/></svg><br> jhelvy.com <svg aria-hidden="true" role="img" viewBox="0 0 640 512" style="height:1em;width:1.25em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:white;overflow:visible;position:relative;"><path d="M579.8 267.7c56.5-56.5 56.5-148 0-204.5c-50-50-128.8-56.5-186.3-15.4l-1.6 1.1c-14.4 10.3-17.7 30.3-7.4 44.6s30.3 17.7 44.6 7.4l1.6-1.1c32.1-22.9 76-19.3 103.8 8.6c31.5 31.5 31.5 82.5 0 114L422.3 334.8c-31.5 31.5-82.5 31.5-114 0c-27.9-27.9-31.5-71.8-8.6-103.8l1.1-1.6c10.3-14.4 6.9-34.4-7.4-44.6s-34.4-6.9-44.6 7.4l-1.1 1.6C206.5 251.2 213 330 263 380c56.5 56.5 148 56.5 204.5 0L579.8 267.7zM60.2 244.3c-56.5 56.5-56.5 148 0 204.5c50 50 128.8 56.5 186.3 15.4l1.6-1.1c14.4-10.3 17.7-30.3 7.4-44.6s-30.3-17.7-44.6-7.4l-1.6 1.1c-32.1 22.9-76 19.3-103.8-8.6C74 372 74 321 105.5 289.5L217.7 177.2c31.5-31.5 82.5-31.5 114 0c27.9 27.9 31.5 71.8 8.6 103.9l-1.1 1.6c-10.3 14.4-6.9 34.4 7.4 44.6s34.4 6.9 44.6-7.4l1.1-1.6C433.5 260.8 427 182 377 132c-56.5-56.5-148-56.5-204.5 0L60.2 244.3z"/></svg><br> jph@gwu.edu <svg aria-hidden="true" role="img" viewBox="0 0 512 512" style="height:1em;width:1em;vertical-align:-0.125em;margin-left:auto;margin-right:auto;font-size:inherit;fill:white;overflow:visible;position:relative;"><path d="M16.1 260.2c-22.6 12.9-20.5 47.3 3.6 57.3L160 376V479.3c0 18.1 14.6 32.7 32.7 32.7c9.7 0 18.9-4.3 25.1-11.8l62-74.3 123.9 51.6c18.9 7.9 40.8-4.5 43.9-24.7l64-416c1.9-12.1-3.4-24.3-13.5-31.2s-23.3-7.5-34-1.4l-448 256zm52.1 25.5L409.7 90.6 190.1 336l1.2 1L68.2 285.7zM403.3 425.4L236.7 355.9 450.8 116.6 403.3 425.4z"/></svg> ]]] --- class: inverse, middle, center # Extra Slides --- # .center[A Changing Political Reality] ### **2000s Globalization** - Free flow of capital, talent, innovation - Technology spillovers across borders -- ### **2010s Push Back Against Globalization** - Economic security concerns (manufacturing job loss) - Competition with China -- ### **2020s Post-COVID Fragmentation** - Supply chain _resilience_ becomes central - Industrial policy competition - Defense concerns ("Dual Use") ] --- ### .center[War in Ukraine] .leftcol[ - Drones now a clear tactical advantage - Reliance on Chinese supply now a defense issue <center> <img src="images/drone.png" width=100%> </center> .font80[https://www.bbc.com/news/articles/ckgn47e5qyno] ] .rightcol[ <center> <img src="images/china_drone_share.png" width=100%> </center> .font80[https://arc-group.com/china-thriving-drone-industry/] ] --- ## .center[Shift from China to SE Asia (Transhipment)] .leftcol40[ ### Chinese firms still leading producers, but manufacturing shifts to SE Asia to skirt US tariffs <br><br><br><br> .font80[Source: https://www.reuters.com/graphics/USA-CHINA/SOLAR-HISTORY/gdpzkdeqlvw/] ] .rightcol60[ <center> <img src="images/solar-seasia.png" width=90%> </center> ] --- ## .center[Shift from China to SE Asia (Transhipment)] .leftcol40[ ### Solar prices in US are much higher than in China <br><br><br><br><br><br> .font80[Source: https://www.reuters.com/graphics/USA-CHINA/SOLAR-HISTORY/gdpzkdeqlvw/] ] .rightcol60[ <center> <img src="images/solar-prices.png" width=100%> </center> ] --- background-color: #FFFFFF ## .center[Learning curve model] .leftcol60[ <center> <img src="images/learning-curve.png" width=100%> </center> ] .rightcol40[ In context of solar PV: - X: Cumulative installed cap. - Y: = Price per kW <br> Log transformation: `$$\ln Y = \ln a + b \ln X$$` ] --- ## Two-factor learning curve model: <br> ## `$$\ln p_{it} = \ln \alpha_i + \beta_i \ln q_{t} + \gamma_i \ln s_{t} + \varepsilon_{it}$$` <br> ## price ($ / kW) = intercept + installed capacity + silicon price ## for country _i_ and year _t_ --- ## Two-factor learning curve model: <br> ## `$$\ln p_{it} = \ln \alpha_i + \beta_i \ln q_{t} + \gamma_i \ln s_{t} + \varepsilon_{it}$$` <br> ## Learning rate: ## `$$L_i = 1 - 2^{\beta_i}$$` --- class: center, middle background-color: #FFFFFF ## U.S.: 26%; China: 33%; Germany: 20% <center> <img src="images/cost_historical_global_plot.png" width=100%> </center> --- ## .center["National Markets" Counterfactual Scenario] **Assumption**: learning-related price decreases in country _i_ in year _t_ are derived from incrementally more nationally-installed PV capacity ## `$$q_t - q_{t-1} = (q_{it} - q_{it-1}) + (1 - \lambda_t) (q_{jt} - q_{jt - 1})$$` ## `\((q_{it} - q_{it-1})\)`: Amount installed in country _i_ ## `\((q_{jt} - q_{jt-1})\)`: Amount installed in all other countries --- class: center ## `$$q_t - q_{t-1} = (q_{it} - q_{it-1}) + (1 - \lambda_t) (q_{jt} - q_{jt - 1})$$` <br> .leftcol[ ## **Global markets** `\(\lambda_t = 0\)` Capacity from all countries `$$(q_{it} - q_{it-1}) + (q_{jt} - q_{jt - 1})$$` ] .rightcol[ ## **National markets** `\(\lambda_t = 1\)` Capacity only from country _i_ `$$(q_{it} - q_{it-1})$$` <br> `\(\lambda_t\)` -> 1 over 10-year period ]