In May, the University of California, San Diego dispatched 11 green energy scholars to China on a fact-finding mission. With Chinese colleagues at Fudan University in Shanghai, the American scholars discussed solar supply chains, industrial policy, critical minerals and other topics related to the energy transition. In Hefei, they toured state-of-the-art electric vehicle and battery factories owned by Nio, Volkswagen and Gotion High-tech, the second largest battery manufacturer in the world. 

But during the trip, what most struck Ilaria Mazzocco, a senior fellow at the Center for Strategic and International Studies, was a simple observation: the number of EVs on the roads. By Mazzocco’s estimate, some 40 percent of Chinese cars she saw bore a green license plate, indicating electrification. “Here in Washington D.C., something like one out of ten cars is electric, and they’re mostly Teslas,” she says. “In China, there were all kinds of different models.” 

What Mazzocco observed anecdotally is born out in the data: Last year, 60 percent of global EV sales took place in China, and just last month — for the first time ever — more than half of all cars that were sold in China were either electric or plug-in hybrids. (In the U.S., about 18 percent of new cars sold are electric or hybrid.) 

Yet EV sales are only the tip of the iceberg of China’s remarkable greenification. In both manufacturing and deploying renewables, as well as installing the high-voltage power lines to connect it all, China has soared past the United States. It produces and has deployed the most wind turbines of any country. Ditto with hydropower. In solar panels, China’s dominance is particularly pronounced: The country makes more than twice as many solar modules as the world installs each year. And last year, the Chinese government invested $676 billion into cleantech, compared to America’s $303 billion. 

“If it’s a race, China won,” says Jay Turner, a renewables-focused historian at Wellesley College. “China is a decade ahead of the U.S. in terms of investments in manufacturing, the supply chains and the deployment of clean energy technologies. The U.S. is now playing catch-up.”

Indeed, the U.S. is racing to respond to China’s successful green industrial policies with some of its own. Since 2022, Washington has imposed prohibitively high tariffs on Chinese-made EVs, solar panels, batteries and permanent magnets (which are critical components for EVs and wind turbines). Because China dominates global supply chains for many essential aspects of the energy transition (such as rare earths, lithium and graphite), the U.S. has also mobilized allies into a “Minerals Security Partnership.” And through the Inflation Reduction Act, the most ambitious climate plan in U.S. history, the Biden administration has funneled billions in subsidies into American renewable firms, creating over 300,000 green energy jobs in America. 

Cumulatively, these policies are projected to reduce America’s carbon emissions by 42 percent by 2030, compared to peak 2005 levels, according to research by the Rhodium Group. But they are also designed to ensure China can’t weaponize its near chokehold on renewable energy in the event of U.S.-China tensions spilling over in Taiwan or elsewhere. 

“From Washington’s perspective, China’s dominance in clean tech and its supply chains can expose it to disruptions involving geopolitical tensions, trade disputes or internal Chinese policies,” says Amy Ouyang, a research associate at MacroPolo, a think tank.

Regardless of the motivation, many of the U.S. policies have galvanized America’s clean tech advocates, who hope that Washington might finally be taking the energy transition as seriously as Beijing.

“This is the right game to play if you think renewables are the future,” says Scott Sklar, president of the Stella Group, a veteran clean energy consultancy. “Can we compete with China in this? Absolutely.” 

But other observers are watching American efforts with skepticism. If China has already won in the first round of the renewables race, why bother trying to just catch up? Shouldn’t the goal instead be to jump ahead, to the next generation of green energy? 

“[Investing in R&D for frontier technologies] would be much more bang for the buck as opposed to having to spend gobs of money replicating supply chains in an area in which there’s really no competitive or comparative advantage for U.S. firms,” says Scott Moore, a Chinese energy and technology expert at the University of Pennsylvania. “The U.S. still has an edge in innovation and basic research and development.” 

In private and public labs across the country, researchers are laboring to reach the next frontiers of clean tech. If realized, these game-changing technologies — sci-fi-esque fields like nuclear fusion and green hydrogen — could “leapfrog” China’s green energy gains in a decisive way, delivering America to the forefront of the clean tech revolution. That is, if China doesn’t also get there first. 

HOPSCOTCH

Professor Ping Liu, a veteran engineer at UCSD, hears the word “leapfrog” often these days. Funding for his field of research — next-generation batteries — has exploded in recent years, he says, because it is seen as a potentially revolutionary technology and one that could jump ahead of China’s green energy gains. 

China’s dominance in EVs, after all, comes predominantly from its dominance in lithium-ion batteries. While traditional internal combustion engine vehicles require complicated engineering in multiple areas, like fuel delivery systems and emission control mechanisms, electric vehicles are basically all about the batteries: how powerful they are, how long they stay charged, how quickly they charge, and how light and safe they are. 

China’s industry leaders, such as BYD and CATL, have developed the cheapest and best EV batteries on the market. But next generation batteries could shake up their advantages. 

“What we do here is push battery parameters to the extreme,” Liu explains, confidently strolling through his busy lab at the university’s Jacobs School of Engineering. With wires of various sizes and colors snaking from the ceiling and over cluttered desks, the lab is one of nine labs in the Department of Energy’s prestigious Battery500 Consortium. 

In 2021, the Consortium was awarded $75 million with the explicit purpose of developing “next-generation batteries for electric vehicles that outperform current lithium batteries.” This funding is part of $209 million awarded by the Department of Energy’s Vehicle Technologies Office. Liu’s lab focuses on developing new battery sizes and improvements in battery life as well as identifying new applications. If lithium-ion batteries can be made to operate in extreme temperatures, for example, then they could be used to power EVs for longer in different weather situations, reducing range anxiety and encouraging greater EV adoption. They could also have applications for aviation and space travel and enhance the reliability of renewable energy storage systems, making them more dependable in harsher climates

But the biggest game-changer, Liu says, would be perfecting solid-state batteries, which use a solid electrolyte instead of a liquid one, allowing for safer, more compact and more efficient energy storage. Solid-state batteries would not only be longer-lasting but could also be applied to a wide range of industries, from EVs to aerospace. If realized, they would massively enhance battery life and supercharge electrification efforts across the grid.

The next breakthrough battery, I’m pretty confident that it’s going to come out of a U.S. institution, probably a government lab or a research university. It’s probably not going to come out of China.

John Helveston, a China-focused engineering professor at George Washington University

Although engineers in China are also trying to commercialize solid-state batteries, Liu is optimistic that America can come to lead the industry. “The research infrastructure in the U.S. and our ability to innovate is all still very much alive,” he says. “We still have a lot of super talented people.”

The U.S. also has an empowered Department of Energy (DOE) behind it. In June, ARPA-E, DOE’s branch that supports frontier technology research, announced it was investing $20 million into Ion Storage Systems, a solid-state battery maker in Maryland. All in all, Biden’s DOE has invested over $125 million in semi-solid or all solid-state battery companies. And several other startups, such as Solid Power, QuantumScape and SES, have also partnered with automakers like BMW, Volkswagen, Hyundai and Honda, for tests. 

“I’m pretty confident that the next breakthrough battery — the next thing that is a new paradigm in the way that lithium ion is the current paradigm — is going to come out of a U.S. institution, probably a government lab or a research university,” says John Helveston, a China-focused engineering professor at George Washington University. “It’s probably not going to come out of China.”

Sensing China’s leadership in the industry could slip, Beijing has formed a consortium of industry heavyweights, academics and government officials with the aim of building a supply chain for solid-state batteries by 2030. The government has also set up a $828 million fund to support six of the emerging companies in the space. 

Even if China’s current dominance in the battery supply chain gives it a leg up in solid-state batteries, its near total chokehold will likely loosen. According to Benchmark Minerals Intelligence, China is forecasted to constitute some 38 percent of solid-state battery installed capacity by 2030; by contrast, the country currently produces four in every five of the world’s lithium-ion batteries. 

“In a way, China sees solid-state batteries as a risk to their control over the lithium ion battery industry,” Rory McNulty, a senior analyst from the data provider Benchmark Minerals Intelligence, recently told The Wire China. 

In an effort to keep the pressure on, America is exploring other energy frontiers as well. Green hydrogen, for example, is a carbon-free source that is a veritable Swiss Army Knife for renewable energy. Both a fuel itself and a storage mechanism for other types of energy, green hydrogen is produced by using electricity derived from renewable sources to split water into hydrogen and oxygen. (When the process, which is called electrolysis, is run using coal or natural gas, the resulting fuel is called ‘black’ or ‘blue’ hydrogen.) 

The Biden administration has called green hydrogen “essential” to the clean energy economy because it could transform several carbon-intensive industries, including steel making, long distance aviation and chemical manufacturing. But figuring out how to make the process both more efficient and cost-effective, alongside equipping the grid to handle it, means there is still a long way to go.

In October, the DOE announced it was investing $7 billion into seven green “hydrogen hubs” across the country with funds from the Bipartisan Infrastructure Law. Each hub will act as its own “ecosystem” to address specific obstacles to scaling up the hydrogen market, such as high production costs and storage and transportation issues. By 2030, the U.S. aims to generate 10 million metric tons of green hydrogen, supported by generous IRA tax credits for producers. (Currently, the world produces only around 120,000 metric tons of green hydrogen per year.) 

“Hydrogen is an area where the U.S. could clearly jump out into a lead and where China would want to learn from the U.S.,” says Michael Davidson, an assistant professor of engineering and policy at UCSD. 

In Chinese industrial policy, you fail all the time, and you just want to make sure that on net you end up with an overall productive and even potentially innovative industry. A single failed bet of American industrial policy gets so much attention.

Kyle Chan, a Princeton sociologist who studies Chinese industrial policy

Indeed, while China released a national hydrogen plan in 2022 and is hard at work on it, experts believe the U.S. has a good chance of jumping to the top of this emerging industry. China is currently the leading supplier of electrolyzers, the devices that produce green hydrogen. But Chinese manufacturers primarily focus on alkaline electrolyzers, which are easier and cheaper to build and scale but not as efficient when paired with intermittent renewable energy sources (e.g., solar, wind). American and European manufacturers, by contrast, are focused on building proton exchange membrane (PEM) electrolyzers, which are more expensive but produce a higher purity hydrogen gas, which is important in things like fuel cells and certain electronics and chemical manufacturing. President Biden even invoked the Defense Production Act in 2022 to accelerate domestic manufacturing of electrolyzers, citing the need to reduce reliance on China.

“Even if China has the production and price competitiveness, it doesn’t mean that the United States necessarily will ‘lose’ [in green hydrogen],” says Ouyang, of MacroPolo. “If the American manufacturers are able to scale up their production of PEM electrolyzers, they will still be able to carve out a significant market for themselves.” In the U.S., she adds, green hydrogen will largely be used to replace natural gas, while in China it will replace coal. 

There are still more green opportunities for the U.S., like nuclear fusion. Unlike nuclear fission, which currently powers nuclear reactors by breaking apart larger atoms to create energy, nuclear fusion releases energy by combining atoms together. This is the process that powers the sun, and it is lauded for both its strength (three-to-four times stronger than fission) and its cleanliness (the byproduct, tritium, is much less radioactive). If realized on a commercial scale, fusion would offer a limitless supply of base load clean energy, meaning energy that is not intermittent and weather-dependent like solar and wind. 

“If you could actually make it work, that would be pretty close to a moonshot success,” says Moore. “It’s the poster child for unrealized potential.” 

Washington has been investing in fusion since the 1950s (nuclear fusion powered the hydrogen bomb), but it is a difficult process to sustain and harness. Only in the past decade, with advances in microprocessors, lasers and other technologies, has the private sector seen a pathway towards commercial fusion. Two years ago, for instance, the Lawrence Livermore National Laboratory in California achieved a “breakthrough” when it created more energy from fusion reactions than the energy used to start the process. (They repeated this feat last year.) The DOE called it “a major scientific breakthrough decades in the making that will pave the way for advancements in national defense and the future of clean power.” In March, Biden signed a funding bill that contained $790 million for fusion science programs for 2024.

China is also pursuing fusion, aiming to develop a prototype fusion reactor by 2035 and commercially scale it by 2050. Last year, Lu Tiezhong, chairman of China National Nuclear Power, said that the first electricity generated by nuclear fusion “must come from our country, and we are working towards this goal.” Shortly thereafter Beijing announced the creation of a new state-owned company, China Fusion Energy, to realize that ambition — but the U.S. still has some tricks up its sleeve.

SCALE-UP NATION

Meanwhile, of course, global temperatures are rising. Whether or not the U.S. can successfully leapfrog or find ways around China’s green technologies, some say the dire need of combating climate change is being lost in the “strategic competition,” especially when it comes to mature technologies like solar panels. 

“I’m really worried that we’re positioning ourselves as so firmly anti-China, that we’re also going to be losing things like low-cost solar panels. At some point you just have to buy the panels and put them on the grid to green the grid,” says Helveston. “We could have made much faster progress than we have if there wasn’t such a competitive stance with China.”

“The reason we have green tech in the first place is the need to mitigate greenhouse gas emissions, which is a global need,” adds Joanna Lewis, a Georgetown University expert on energy policy. “But when you look at it from a nationalistic perspective, you come up with different priorities than when you look at it from a global perspective.” 

For the Biden administration, one of those national priorities is economic development and on-shoring: Washington very much wants American workers and companies leading America’s energy transition, not Chinese ones. “It’s very exciting to be able to compete with China and really not allow all of these jobs to leave without us doing something about it,” Biden’s Energy Secretary Jennifer Granholm said in June at a newly opened lithium mine in Nevada. As President Biden himself declared in April, “When I think of climate, I think of unions, I think of jobs.”

The country’s energy transition is still proceeding at a snail’s pace, however. Even though competition with China serves as a useful boogeyman to encourage bipartisanship in D.C., climate change has long been hyper-politicized and there remains a lack of consensus around clean technologies like EVs and wind turbines. Donald Trump, for instance, has speculated that wind turbines cause cancer and has said that EVs will “kill” the U.S. auto industry. At the state level, permitting and other bureaucratic hurdles can prevent large-scale renewable projects from even breaking ground. 

Even among scientists there is disagreement about what kinds of renewables to focus state and private resources on. One eminent scientist might evangelize for geothermal or biofuels while another will decry both as snake oil. Mark Z. Jacobson, a Stanford environmental engineer, describes many frontier technologies like carbon capture and nuclear power as a waste of time. Rather than moonshots, he argues, America should be focused on scaling out existing renewables like wind, solar and hydropower, and attempting to make already proven technologies like green hydrogen and geothermal more cost-efficient. 

“Focusing on electrification of all energy using clean, renewable electricity and storage will hasten America’s transition,” says Jacobson. “Distraction by and subsidizing useless technologies will slow the transition.”

All of this debate is in contrast to China, where top-down directives on renewable deployment are more or less obeyed and generously incentivized. Though China still has a long way to go in cutting emissions — it remains the world’s largest burner of coal — Xi Jinping’s 2020 carbon neutral declaration has become a political priority down to the provincial level. As Americans bicker over cleantech, Chinese provinces are pouring billions into it.

Even so, there may be some advantages to the American system that could prove pivotal to the next generation of cleantech. Wall Street and America’s sophisticated financial markets, for instance, have a key role to play in whether or not frontier technologies can scale up.

“We’ve led the world in power purchase agreements, shared savings, on-bill financing and all these unique tools to pay-as-you go to scale up these technologies and make them affordable,” says Sklar, of the Stella Group. “The rest of the world is copying us.” 

When I started studying all of this, the general sentiment was, ‘How can China leapfrog the west?’ There was not even a glimmer that China would do wind, solar or EVs. But China was able to not only catch up but leapfrog the west in a lot of these industries.

Joanna Lewis, a Georgetown University expert on energy policy

Another leg-up is America’s expertise in software. “There are many different ways in which you scale things,” says Davidson. “A lot of these new technologies are going to have very significant software components and data components. That may be where a significant amount of value added comes from as we deploy them. It’s not just the hard things that go into the ground.” 

If the U.S. hopes to win the next round of the Warming War, however, there are also lessons to be learned. One is how to fail better. Kyle Chan, a Princeton sociologist who studies Chinese industrial policy, points out that, while China’s success in green energy is well publicized, “what we don’t hear about are all the failed bets along the way.”

“In Chinese industrial policy, you fail all the time, and you just want to make sure that on net you end up with an overall productive and even potentially innovative industry,” he says.

By contrast, he says, Solyndra became Washington shorthand to shoot down industrial policy ideas after the solar company, which received a $535 million federal loan during the Obama administration, failed. America, Chan thinks, should develop a thicker skin: “A single failed bet of American industrial policy gets so much attention.” 

Elisabeth Reynolds, an MIT professor focused on industrial competitiveness, notes that while the U.S. has always been an impressive start-up nation, it has struggled to scale up its infrastructural innovations. Investors are deterred by the decade-plus timescales and gargantuan investments required — i.e., their slower and smaller returns. But she is optimistic that this is changing, pointing to Washington’s recent adoption of industrial policy and a surge in market demand for clean energy. 

“The reality is we can’t move as fast as China because of our political system,” she says. “But we can certainly do better than we have in the past, and we’ve got a lot of momentum right now.”

Innovations that fail to scale are also at risk of being bought up by Chinese companies with deep pockets. The cautionary tale of battery maker A123 most resonates with policy makers: the Massachusetts-based battery manufacturer secured more than $160 million in government grants and contracts in the early 2000s, before eventually going bust and being sold to a Chinese conglomerate for a bargain basement price. In part due to the A123 case, Congress in 2018 gave the Committee on Foreign Investment in the U.S., or CFIUS, the power to block transactions involving “emerging and foundational technologies.”

The challenge remains, however, of how to lower prices and make innovative technologies commercially viable. “Traditionally,” Mazzocco says, “the way American companies did that was by scaling them with China. Now the U.S. needs to figure out how to do that in a different way.” 

Lewis, at Georgetown, notes there is an aspect of humility in this new effort. The U.S., after all, boasted the edge in first-generation renewables: In 2002, when China started producing its first solar panels, the U.S. controlled a respectable 24 percent of the global market. 

“When I started studying all of this, the general sentiment was, ‘How can China leapfrog the west?’” she says. “There was not even a glimmer that China would do wind, solar or EVs. But China was able to not only catch up but leapfrog the west in a lot of these industries. This was not something that U.S. policymakers saw coming.”

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