Why China is becoming the world’s first electrostate

Wind Power Progress in Australia US Electric Car Sales Surge 20% in July; Tesla's Prices and Margins Decline Wind Power Progress in Australia US Electric Car Sales Surge 20% in July; Tesla's Prices and Margins Decline Why China is becoming the world’s first electrostate #China, #electrostate, #windpower, #electriccars, #Tesla, #Australia, #USsales

Episode Transcript

(00:00):
Welcome to Innovation Pulse, your quick no-nonsense update on the latest in clean tech and EVs.

(00:10):
First, we will cover the latest news.
Australia advances in wind energy but faces investment shifts, while Tesla sees rising
sales yet declining prices raising financial concerns.
After this, we'll dive deep into China's rapid solar expansion and its impact on the
global energy landscape.

(00:32):
Australia has made significant strides in wind power, with onshore wind contributing
13.4% of electricity to the grid, surpassing rooftop solar.
In 2024, six new wind farms added 836 megawatts of capacity, with 18 more under construction.

(00:52):
Despite progress, onshore wind faces challenges such as environmental assessments and supply
chain issues, making project timelines longer compared to solar.
Offshore wind development has been slow due to political hurdles, but the new labour government
is making gradual progress.
Feasibility licenses and environmental assessments are underway for offshore projects.

(01:18):
However, investment in wind energy has declined, with a shift towards battery storage by major
utilities.
This may be a strategic move to maintain market dominance.
Despite these challenges, Australia remains a leader in renewables, with South Australia
set to achieve 100% net renewable energy.

(01:43):
Let's now switch to the financial outlook for Tesla.
In July, US electric car sales rose 20% year over year, but Tesla's average transaction
price decreased over $5,000 compared to last July.
Data shows Tesla and Stellantis are the only automakers with a year over year drop in prices,

(02:03):
with Tesla down 9.1% and Stellantis 6.8%.
From June to July, six automakers, including Tesla and Stellantis, saw month over month
price declines.
Price reductions can result from lower manufacturing costs or increased sales of cheaper models.

(02:23):
Tesla's sales have not met targets for over a year, leading to more incentives and thinner
profit margins.
While price drops benefit consumers, there's concern Tesla faces increasing challenges
in selling cars.
As Tesla continues reducing prices and margins, its financial stability may be at risk if
sales trends don't improve.

(02:46):
The upcoming quarters will be crucial for Tesla's outlook.
In 2024, Australia saw significant progress in onshore wind energy, with six new wind
farms adding 836 megawatts to the grid.
Onshore wind contributed 13.4% of the country's electricity, surpassing rooftop solar.

(03:10):
However, offshore wind development lagged due to political and bureaucratic hurdles.
The new labour government is slowly advancing this sector, with 12 gigawatts of feasibility
licenses awarded.
Despite onshore successes, challenges like environmental assessments and grid access
remain.

(03:31):
Investment in wind energy fell sharply in 2025, with funds shifting towards battery storage,
possibly due to market strategies by major utilities.
Meanwhile, South Australia is leading in renewable energy, nearing 100% net renewables with new
wind farms.
The push for more renewables is driven by the need for affordable, stable energy as

(03:56):
traditional fossil fuels decline.
The situation remains dynamic as stakeholders navigate these changes.
U.S. electric car sales rose 20% in July.
Tesla's average transaction price fell by over $5,000 compared to last year, with a

(04:16):
9.1% reduction, while Stellantis saw a 6.8% drop.
Other automakers' average transaction prices increased.
Month over month, six automakers, including Tesla, saw price decreases, with Tesla's
average transaction price down 2.4%.

(04:38):
Reasons for price drops vary.
Lowered manufacturing costs, increased sales of cheaper models, or challenges in meeting
sales targets, which may explain Tesla's situation.
Tesla has faced difficulty hitting sales targets and has increased incentives, which might
be causing its profit margins to thin.
Despite dropping prices being good for consumers and boosting electric vehicle sales, Tesla's

(05:03):
struggle to find buyers poses concerns.
Upcoming quarters will reveal more about Tesla's financial and sales trajectory.
And now, pivot our discussion towards the main clean tech topic.
Hey everyone, I'm Donna, and welcome back to Innovation Pulse, where we dive deep into

(05:27):
the forces reshaping our world.
Today I'm joined by energy analyst, Yaakov Lasker, who just got back from a research
trip to China with some mind-blowing insights about what might be the biggest economic transformation
we've ever witnessed.
Donna, thanks for having me.
And honestly, mind-blowing doesn't even begin to cover it.

(05:48):
Picture this.
In April of this year, China installed more solar power capacity than Australia has built
in its entire history.
Not in a year, not in a quarter, in one month.
Wait, hold up.
One month?
Australia's been working on solar for decades, and China just...
Crushed it in 30 days.

(06:08):
And here's the kicker.
This isn't even about climate change the way we think about it in the West.
Okay, now you've got my attention.
Because when I think about China's massive renewable push, I automatically assume it's
about reducing emissions.
Right?
Being a good global citizen?
That's exactly what I thought too, but I was completely wrong.

(06:29):
This is about something much more fundamental.
It's about China becoming what researchers are calling the world's first electro-state.
Think about it like this.
For the past century, global power has flowed through whoever controlled oil and gas.
Saudi Arabia, Russia, Texas oil barons.

(06:49):
They've called the shots because everyone else needed what they had.
Right, and China has been massively dependent on imported oil.
They're actually the world's biggest oil importer, aren't they?
Exactly, and that dependency has been driving them crazy for decades.
So while we're debating carbon targets and climate commitments, China looked at their

(07:11):
energy situation and said, we're not doing this anymore.
We're going electric, and we're going to dominate every piece of that puzzle.
So this is about energy security first, climate benefit second?
Precisely.
And once you understand that, everything else makes sense.
The scale, the speed, the government backing.

(07:32):
It's not environmental policy, it's national security strategy disguised as a green transition.
Okay, but help me wrap my head around the actual scale here.
You mentioned that solar statistic, but what does China's clean energy build out actually
look like when you're there?
Oh, this is where it gets wild.
China now has half of the world's solar capacity, half of all wind power, and half of all electric

(07:55):
vehicles.
But here's what really hit me when I was in Beijing.
You can stand at a major intersection with four lanes going every direction, and it's
almost silent.
The noisiest thing you'll hear is a bicycle squeaking.
No way!
I've been to Beijing, and it used to sound like a construction site mixed with a highway.
Right.

(08:16):
Now their streets are filled with electric cars, and it happens so fast that even the
locals are amazed.
And here's a number that should make every economist pay attention.
Clean energy now drives 10% of China's entire GDP.
It just overtook real estate as an economic driver.
Wait, clean energy overtook real estate in China?

(08:38):
That's actually staggering.
Real estate has been their economic engine for what, two decades?
At least.
But think about what this means.
They've essentially rebuilt their entire economic foundation, while the rest of us
were still arguing about whether electric cars would ever be practical.
They didn't wait for the market to demand it.

(08:59):
They created the market, and now they're supplying the whole world.
This actually connects to something I've been wondering about.
When I see made in China on solar panels or EV batteries, is that just because labor is
cheaper there, or is there something deeper happening?
Oh, this goes way deeper than cheap labor.
Remember how China became the world's factory in the 1990s?

(09:22):
They figured out that you maximize efficiency by clustering entire supply chains in one
region.
So instead of shipping battery components around the world, they put battery factories
right next to car plants, solar panel manufacturers next to the companies making the mounting
systems.
So it's like they created these renewable energy ecosystems.

(09:43):
Exactly.
And then they did something really smart.
They used government subsidies not to keep industries alive forever, but to give them
a running start.
Think of it like teaching a kid to ride a bike.
You hold on until they get their balance, then you let go and watch them fly.

(10:03):
But Yaakov, I have to push back on something here.
I keep seeing headlines about China still building coal plants while they're doing all
this renewable stuff.
Isn't that kind of hypocritical?
Oh, I'm so glad you brought this up because it really frustrated me at first too.
But here's what's actually happening.
And this is where China's long term thinking becomes clear.

(10:26):
They knew this transition would take a decade, and during that decade, they'd need more
power to build all these factories and supply the growing middle class.
So they kept building coal as a bridge while they scaled up renewables?
Right.
But here's the beautiful part.
That bridge is now burning behind them.
Recent data shows China's emissions actually dropped by 1.6% in the first quarter of this

(10:51):
year.
And since China produces 30% of global emissions, that's massive for climate action worldwide.
Hold on, their emissions are already declining?
Even while their economy is still growing?
That's the magic of electrification at scale.
And it gets better.
China is expected to hit peak oil demand by 2027.

(11:13):
Think about what that means for global oil markets when the world's biggest importer
starts buying less every year.
OK, so this is where I start getting nervous about what this means for countries like ours.
If China controls the electric future, the way Saudi Arabia controlled the oil past,
are we just trading one dependency for another?
That's the trillion dollar question.

(11:35):
And honestly, it's why I think this story matters so much for Australia specifically.
We've built our economy on exporting coal and iron ore to the world.
But if the world is going electric, what happens to that demand?
Right.
And it's not like we can just flip a switch and become a renewable energy superpower overnight.
But here's what gives me hope.

(11:56):
And this might sound weird.
China's transformation is actually making electrification cheaper for everyone else.
Their massive scale has driven down the cost of solar panels, batteries, and electric cars
globally.
It's like they're subsidizing the world's transition.
So in a weird way, China's self-interested move toward energy security is accidentally

(12:17):
solving climate change?
Accidentally might be too strong.
But yeah, their exports of clean tech in 2024 alone have already reduced global emissions
outside China by 1%.
And that impact will compound for the next 30 years as those technologies keep running.
That's actually pretty incredible.

(12:38):
But I'm curious about the human element here.
When you were talking to people in China, how do they see this transformation?
You know what struck me most?
There's this sense of inevitability about it.
A government analyst told me, can you imagine our leaders saying we're going back to fossil
fuel cars instead of electric ones?
It won't happen.
The momentum is too strong now.

(13:00):
That's such a different mindset from how we approach energy policy here, where everything
feels like it's constantly up for debate.
Exactly.
And whether you love or hate China's political system, you have to admit they can move fast
when they decide on a direction.
The question for democracies like Australia is whether we can create that same sense of

(13:20):
inevitability around our own energy transition.
So for our listeners who are trying to make sense of what this means for their daily lives,
their investments, their careers, what should they be watching for?
Great question.
First, pay attention to oil prices and energy costs.
As China reduces its oil imports, global oil markets will have to adjust.

(13:43):
That could mean cheaper gas in the short term, but also less investment in new oil projects
long term.
Some probably more pressure on other countries to accelerate their own electric transitions.
Right.
And if you're thinking about your career or investments, the clean tech supply chain
is where the action is.
Not just making solar panels, but everything from the rare earth minerals that go into

(14:07):
batteries to the software that manages electric grids.
Plus, if China has shown us anything, it's that the countries that move fast on this
transition get to set the rules for everyone else.
Absolutely.
The next decade is going to determine whether we're buying our electric future from China
or building our own version of it.
Yaakov, this has been absolutely fascinating.

(14:30):
Any final thoughts for people who want to understand where all this is heading?
Just this.
We're witnessing the end of the oil age in real time.
It's not happening in 50 years or 30 years.
It's happening now and China is showing us what the electric age looks like.
The question isn't whether this transformation will happen.

(14:51):
It's whether other countries will lead, follow, or get left behind.
And on that note, next time you plug in your phone or see a solar panel on a roof, remember,
you're looking at the early signs of the biggest energy revolution in human history.
Thanks for listening to Innovation Pulse.
I'm Dana.
He's Yaakov.
And we'll see you next time for another deep dive into the forces reshaping our world.

(15:19):
And that's a wrap for today's podcast.
Australia is making strides in wind energy despite investment shifts, while Tesla faces
financial scrutiny amid sales growth.
Meanwhile, China's rapid solar expansion is reshaping global energy dynamics with potential
challenges for fossil fuel exporters.

(15:40):
Don't forget to like, subscribe, and share this episode with your friends and colleagues
so they can also stay updated on the latest news and gain powerful insights.
Stay tuned for more updates.