Essay by Eric Worrall
In the parallel universe of Nick Robbins and the Grantham Institute, business opportunities require massive state subsidies.
US tariffs propel global clean energy shift
By Nick Robins and Bob Ward | China Daily | Updated: 2025-08-09 08:52
SHI YU/CHINA DAILY
China and the rest of the world have been presented with an enormous economic opportunity by the United States’ so-called One Big Beautiful Bill Act. US tariffs have already increased the costs of many imported low-carbon goods in the US. Now, the new act, signed into law on US Independence Day on July 4, will further harm the market for many clean energy goods by removing tax credits, most likely leading to greater dependence on fossil fuels and increased damage to the climate.
This will create more challenges for clean energy producers and consumers in the US, likely affecting exporters, particularly those that export their products.
But more interestingly, the new act is likely to put China further ahead of the US in the global race to capitalize on the rapidly growing market for clean energy technologies. Strategically, the task ahead is to identify how this shift can be used to triple the production of renewable energy the world needs by 2030, one of the key climate goals we need to achieve this decade.
…
Besides, more than 17 million EVs were sold worldwide last year, meaning more than one in every five new vehicles sold worldwide was an EV. China accounts for more than 70 percent of the global EV production, primarily meeting the demand at home. Also, the global market for EVs increased by 20 percent last year, with China exporting almost 1.25 million EVs, or about 40 percent of the global total, in 2024.
The production of solar panels in China reached a record high in March 2025. Measured by value, 44 percent of Chinese-made solar panel exports were destined for emerging market economies and developing countries in 2023. Many emerging market economies and developing countries imported record levels of Chinese solar power technology in 2024.
…
Nick Robins is chair of the Just Transition Finance Lab at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science; and Bob Ward is policy and communications director of the same institute. The views don’t necessarily reflect those of China Daily.
Read more: https://www.chinadaily.com.cn/a/202508/09/WS68969bd7a310724b60020be9.html
As someone who runs a small business, I can confidently report that it is possible to create a business without receiving money from the government. I know this might seem an alien concept to LSE professors like Nick Robins, the author of the article above, but sometimes it is possible to identify business opportunities which don’t require vast injections of taxpayer capital to cover the loss of manufacturing goods nobody actually wants.
In the article Nick makes a big deal of Chinese EV sales. But there is substantial evidence those EV sales are fake, in the sense that the real source of income is a Chinese government funded Ponzi scheme – fiddling the books to cash in on government subsidies, to create the illusion of solvency, rather than genuine growing profits from sales.
Exclusive: China EV brands Zeekr, Neta inflated car sales using insurance scheme
By Reuters
July 22, 20258:06 AM GMT+10Updated July 22, 2025
- Neta inflated sales of over 60,000 cars between Jan 2023-March 2024-documents
- Scheme enabled companies to book sales early to meet aggressive targets
- China’s auto industry has been roiled by cutthroat competition, prompting regulatory concern
July 20 (Reuters) – Chinese electric vehicle brands Neta and Zeekr inflated sales in recent years to hit aggressive targets, with Neta doing so for more than 60,000 cars, according to documents reviewed by Reuters and interviews with dealers and buyers.
…
Neta booked early sales of at least 64,719 cars through this method from January 2023 to March 2024, according to copies of records it sent to dealers, seen by Reuters. That was more than half the sales of 117,000 vehicles it reported over the 15 months. Neta’s effort to book sales early has not been previously reported.
…
Vehicles booked as sold before reaching a buyer are called “zero-mileage used cars” in the Chinese auto industry. The practice has emerged out of cutthroat competition for sales in the world’s largest auto market, which is reeling from a brutal, years-long price war caused by chronic overcapacity.
Read more: https://www.reuters.com/business/autos-transportation/china-ev-brands-zeekr-neta-inflated-car-sales-using-insurance-scheme-2025-07-20/
…
Why would Chinese EV manufacturers want to allegedly book sales before the vehicles are actually sold? Besides pumping their company share price with fake sales growth reports, if the vehicle is registered as sold and ticks a few other boxes, there is a good chance those Chinese manufacturers will be eligible to receive a cash payment of $2,728 from the Chinese Government.
Beijing renews EV subsidy to spur sales, keeps size of incentive unchanged from 2024
NDRC says buyers of electric cars for replacement purposes would receive US$2,728 this year
China renewed a trade-in subsidy that spurred electric vehicle (EV) sales last year, keeping the size of the incentive unchanged to support carmakers from Tesla to BYD.
On Wednesday, the National Development and Reform Commission (NDRC) said buyers of electric cars for replacement purposes would receive a 20,000 yuan (US$2,728) cash award this year. Consumers who buy petrol cars fitted with an engine smaller than 2 litres to replace their vehicles would be given 15,000 yuan.
“A renewal of the subsidy has been anticipated by dealers and car buyers,” said Chen Jinzhu, CEO of Shanghai Mingliang Auto Service, a consultancy. “The official announcement came earlier than expected and it would help boost sales in January when [EV] buying interest appears to be low.”
…
Read more: https://www.scmp.com/business/china-business/article/3293949/beijing-renews-ev-subsidy-spur-sales-keeps-size-incentive-unchanged-2024
A business model where the company intentionally makes a loss but fiddles the books to qualify for enough subsidies to appear solvent might seem insane, but there is method in this madness. In China well connected executives can win, even when they run their companies into the ground – especially if they are also burning the life savings of ordinary people who were lured in by the fake growth reports.
If I am right, the Chinese renewable industry is a replay of the Chinese housing industry disaster. It was well meaning Chinese government attempts to gently ease the housing bubble which led to the collapse of the Chinese construction industry. To his credit dictator Xi Jinping realised there was a problem, and tried to do the right thing, but Chinese construction companies were so insanely stretched, even a slight wobble in demand was enough to cause financial collapse.
…
Shadow banking and the related risks to financial stability proved to be a painful headache for Chinese regulators. Xi Jinping first attempted to regulate the property market’s excessive leverage in mid-2017. This proved counterproductive as it once again pushed real estate developers to find alternative sources of funding, leading them to the offshore bond market in Hong Kong and to using pre-sales from Chinese households. Chinese households’ savings and wealth became increasingly intertwined with a bloated real estate sector which was four times as big – in terms of developers’ assets – as anywhere else in the world.
The fragilities of China’s real estate sector were buried over the years thanks to ample liquidity in the financial sector and high economic growth. These suddenly became visible when Chinese regulators began to react to the ever-increasing housing prices and the related deterioration of housing affordability and income distribution.
…
Read more: https://www.bruegel.org/newsletter/boom-bust-and-future-chinas-real-estate-sector
The Chinese government panicked when the their gentle adjustment caused the building industry to implode, and tried to restore order with billions of dollars of stimulus packages, but it wasn’t enough – once the balloon popped, there was no putting it back together.
I believe the Chinese EV and renewable energy manufacturers might be betting on the same scenario playing out for their industry. If they can employ enough people, capture enough life savings from ordinary people, it doesn’t matter if their companies are so in debt they have no genuine capital value, so long as they can fiddle the books and conceal the magnitude of their problems. When it all falls apart the problems will be so great, the state will step in and subsidise them.
Author Nick Robins is pushing a Chinese style model of state investment in renewables as a recipe for success. But if I am right, such schemes are not victimless crimes. The ultimate victims of what I believe is a corrupt state sanctioned renewable Ponzi scheme are ordinary people who pour decades of savings into the hands of these high wire artists, only for the state to take even more of their money in a frantic effort to prop everything up when the proverbial hits the fan.
Discover more from Watts Up With That?
Subscribe to get the latest posts sent to your email.
We’re experiencing an upsurge of unheard of Chinese EV brands hitting our shores. Ordinarily that would be called dumping.
It will be called burning and breaking down….just say no to the Chicoms.
EV fires are such fun.. very exciting !!!
media.gettr.com/group6/getter/2025/07/31/10/c37357d6-96ed-fe18-4c38-6aedb751f233/out.mp4
Fireworks are typically better at night, but that was pretty good.
Most of those Chinese Manufactured goods are cheap knockoffs anyway.
Anybody buying them or are they merely dealer forecourt decoration?
I’d call it Polluting
The Japanese seemed so dominant, then their real estate market crashed. Much of their economy has been on life support since then, as there was no political willingness to accept even a short deep depression.
The CCP also seems devoted to papering over real losses. Given their real estate bubble, I would not trust any financial reporting out of the PRC.
I remember the 1980s, when everyone in the United States was terrified of the inevitable coming Japanese dominance over the world economy. Japan was superior in every conceivable way, Liberal economists, in particular, were in despair over the superiority of Japan’s central planning to ours: they often cited the fact that Japan had 250-year economic plans.
I’d be willing to bet that not one of those plans foresaw the smart phone.
I don’t think anyone really saw the boom in smartphones, but Sony was definitely one of the first companies to cash in on it. My second smartphone was a Sony, although I admit my first was an iMate.
I think that Japan’s dedication to following Deming quality ideas were what made them dominate. Once they started applying things like the 5 whys to everything profits improved. Once we started using it we lost our despair and became their equal or better. Loved my Sony Walkman.
Michael Crichton wrote a book about the fear of Japan buying America: Red Sun Rising. How did that prediction work out 🤦♂️🤦♂️🤦♂️🤦♂️
I remember when Tokyo was supposedly more valuable than all of the US, but what came of that? A bubble collapse that Japan still is struggling with. I suspect China has already began its decline, and thinking it has an edge on these bad technologies won’t change that.
check out https://www.youtube.com/@KenCaoMacroLens/videos
People, please stop posting links that are not fully explained by the poster. I don’t click on the random, unexplained stuff posted on any forum.
I did explain that link in a previous comment. I understand what you’re saying. Makes sense and I agree. That link is for a YouTube channel by a man from China who does a great job if deconstructing Chinese policies and saying what’s really going on in China. Now you know. It’s a great channel- fairly new and growing fast. No BS- he just gets to the point.
Anybody that believes anything coming from communist, socialist or otherwise authoritarian country is an idiot.
It takes a lot of coal fired power plants to produce solar panels.
And a lot of nasty chemicals !
And a lot of digging, refining to get those nasty chemicals, which are useful for 25 years and then “live” in hazardous waste landfills FOREVER.
According to peanut-brained AOC, worth about $25 million after grifting and grafting, not bad for an ex-bartender, ex-social worker, the world has only about 9 years left; it used to be 11 years
We all should be thinking of preparing a will
COAL ELECTRICITY LESS COSTLY, AVAILABLE NOW, NOT PIE IN THE SKY, LIKE EXPENSIVE FUSION AND SMALL MODULAR NUCLEAR
https://www.windtaskforce.org/profiles/blogs/coal-electricity-less-costly-available-now-not-pie-in-the-sky
.
Coal gets very little direct subsidies in the US.
Here is an example of the lifetime cost of a coal plant.
The key is running steadily at 90% output for 50 years, on average
.
Assume mine-mouth coal plant in Wyoming; 1800 MW (three x 600 MW); turnkey-cost $10 b; life 50 y; CF 0.9; no direct subsidies.
Payments to bank, $5 b at 6% for 50 y; $316 m/y x 50 = $15.8 b
Payments to Owner, $5 b at 10% for 50 y; $504 m/y x 50 = $21.2 b
Lifetime production, base-loaded, 1800 x 8766 x 0.9 x 50 = 710,046,000 MWh
.
Wyoming coal, at mine-mouth $15/US ton, 8600 Btu/lb, plant efficiency 40%, Btu/ton = 2000 x 8600 = 17.2 million
Lifetime coal use = 710,046,000,000 kWh/y x (3412 Btu/kWh/0.4)/17,200,000 Btu/US ton = 353 million US ton
Lifetime coal cost = $5.3 billion
.
Year 1 Bank/Owner cost = (15.8, Bank + 21.2, Owner)/50 = 0.740 b
The Owner can deduct interest on borrowed money, and can depreciate the plant over 50 y, or less, which helps him achieve his 10% return on investment; that is a general government subsidy charged to taxpayers and/or added to government debt.
.
Other costs:
Fixed O&M (labor, maintenance, insurance, taxes, land lease)
Variable O&M (water, chemicals, lubricants, waste disposal)
Fixed + Variable, newer plants 2 c/kWh, older plants to 4 c/kWh
.
Year 1 O&M cost = $0.02/kWh x 710,046,000 MWh/50 x 1000 = $0.284 b
Year I Coal cost = $15/US ton x 353 million US ton/50 = 0.106 b
Year 1 Bank/Owner cost = 0.740 b
Year 1 Total cost = 1.130 b
Year 1 Revenue = $0.08/kWh x 710,046,000 MWh/50 x 1000 = $1.136 b
For on land wind and solar to cost 8 cents/kWh, about 50% of direct subsidies are needed
.
For lower electricity cost/kWh, borrow more money, say 70%
Traditional Nuclear has similar economics; life 60 to 80 y; CF 0.9
.
For perspective, China used 2204.62/2000 x 4300 = 4740 million US ton in 2024
Plus a lot of slave labor.
Two points:
“. . . to triple the production of renewable energy the world needs by 2030, one of the key climate goals we need to achieve this decade.”
If my arithmetic is correct there are fewer than 4 years – 5 months to triple the …etc. Even if all the world wanted to do this, I doubt it is possible.
And:
“Besides, more than 17 million EVs were sold worldwide last year, meaning more than one in every five new vehicles sold worldwide was an EV.”
In 2024, electric vehicles accounted for approximately 9.2% of all new car registrations in the United States. This marked an increase from 8.0% in 2023. It is a bit difficult to get numbers but somewhere around 12% of 2024 sales were hybrid or plug-in hybrid. It doesn’t seem U. S. car buyers on on-board with pure EVs.
11M of those 17M were sold in China and only 6M around the rest of the globe
Yep and Europe saw EV sales stagnate whilst in the US EVs only accounted for 10% of sales.
IEA ‘Global EV Outlook 2025’ (May 2025)
I wonder how much a “zero milage used car” costs. Looks like an opportunity for a bargain. Temu?
Here’s what to expect for an imported Chinese EV bought from China and shipped to the US
Or this if you prefer a Supercar EV
This guy is obviously expecting to make $ from Youtube but these cheap vehicles can’t be legal on US roads due to safety requirements alone. In recent years the Russians bought Chinese vehicles and are crying about the low quality and breakdowns….Chinese auto industry is subsidized and there are lots of unsold new cars in China. Communism and free enterprise are not compatible and the very messed up Chicom economy will crash sooner or later.
We have two vehicles with “EV” stickers on the license plates. They’re both hybrids and we have to pay an extra $75/year registration fee. Worth it for the milage increase but not the virtue signaling. You couldn’t pay me to take a battery EV.
Dominating what renewable energy market five eighths of FA is FA
LOL
China’s one to talk about increasing dependence on Fossil Fuels and it’s supposed potential climate damage.
China who produces 34% of Global Emissions.
China who consumes 70% of the global coal supply.
China who shames the western nations for doing what They do.
China who already dominates the globe in Low Quality (CHEAP) Renewable generation products.
China who produces 21,000 e-bike explosions and almost 43,000 E-vehicle explosions annually.
China plays the west off a break when it comes to climate bullshit.
They pretend they’re on board with solar & wind farms, even buy some of their own products for show just to keep the lucrative gig going for as long as possible.
Add China who approved almost 100GW of new coal in 2024
China Daily: Trump’s Big Beautiful Bill will Allow Chinese Companies to Dominate Renewable Energy
Oh, no! Not that!
Let ’em have it.
Slight problem for China is that the solar sector shed 33% of its workforce in 2024, 40 companies have gone bankrupt as government handouts created frenetic expansion in recent years which has resulted in huge overcapacity and basically collapsed the the market.
All over China there are solar farms NOT producing any electricity.
Reuters recently reported that the world is currently producing twice as many solar panels each year as it uses, mostly manufactured in China.
“…rapidly growing market for clean energy technologies.” Let ’em waste all the time and money they want on manufacturing wind turbines and solar panels. That’s just money and technology they can’t spend on defense.
With Trump’s tariff war with the world, there will be two winners …
In the short term, the USA, a few jobs, political rhetoric & votes.
In the long term, the world, but mainly China, because over the last 25 years, the West has made China & the far east, the workshop of the world & run our industry down (to save the planet !! ).
Almost all successive ‘western’ governments of all political directions have only looked as far as how to get back in power at the next election & will do/say anything to achieve that.
The Chinese have always looked for the best long-term outcome (for China); compare China today to 50 years ago.
A friend makes widgets. Last April, he designed a new widget & looked to get it manufactured here. The best deal he could get for the first batch was 6-month lead time & an up-front tooling cost of £31,000.
So he talked to China, agreed on a deal ( NO up-front tooling costs) & sent drawings, 2 days later the Chinese phoned back to suggest improvements, 11 days after sending drawings, a production-ready prototype was delivered for approval (it was superb workmanship ).
So, guess where they are now being made. The first container arrived last week.
We can’t compete with that service.
We shall see. The alternative was to go the globalist route which I know was not working.
If something seems too good to be true…
Trump has no next election, and monkeywrenching the elite machine that has crippled the US, and the West in general, in so many ways has potential. However, unless it also addresses the military complex, it is for naught, I fear.
That would require a lobotomy of almost all Senators
I’ve spent a lot of time in China. They can do amazing things very cheaply, but behind the glitz, it’s mostly a third world country, crumbling from within.
Central planning has created so many distortions that are bubbling up. Their one child policy, for example, was not so well thought out. Demographics will be another huge drag on their society.
“China Daily: Trump’s Big Beautiful Bill will Allow Chinese Companies to Dominate Renewable Energy”
Well good, because in a few years they won’t have a market. Better the Chinese take the hit than us.
When the renewables market crashes, it won’t be pretty.
“… likely to put China further ahead of the US in the global race to capitalize on the rapidly growing market for clean energy technologies…”
Good, let’em have it! Eventually, that market will crash.
Regarding China, I’ve discovered a great YouTube channel discussing the lies and myths about China from a Chinese guy. He does a great job of deconstructing China.
https://www.youtube.com/@KenCaoMacroLens/videos
It’s true, every time I read about a private company investing they get subsidies. Even when it are billion dollar companies, nothing in Europe gets done without subsidies.
This could be fun. If the Chinese car market implode then who’s going to build EV’s? Sales go bad in Europe, who could have guessed 60k-90k cars are not in high demand?
Same with solar panels, China is putten them on lakes and every mountain top. Everything green is a scam, everything green is a disaster for the environment and climate.
When talking about EV sales I think this includes all cars with battery and some brands only my hybrids. The average age of a car haas gone up, I’ve never seen consumers reject a product like EV’s.
“the new act is likely to put China further ahead of the US in the global race to capitalize on the rapidly growing market for clean energy technologies.”
Proof beyond doubt that the author is living on a planet inhabiting a dimension orthogonal to reason.
Except that, if Trump continues the way he has begun, there will be no renewables industry left for China or anyone else to dominate. Who cares if its a few million a year niche market for off-grid appliances? That’s probably all it is, take away all the subsidies and the costs of connecting and using the power for general use.
Its amazing that countries – well, the UK, US, Australia, NZ, the UK being the most extreme case – have embarked on this crazy plan of converting generation to wind and solar without ever running a pilot project to see how it (intermittent weather dependent power) works out in the real world. All the evidence coming in is that it doesn’t work well and its incredibly expensive. So much so that the real costs to the economy of the UK Net Zero project are probably going to lead to a visit from the IMF in the term of the present government.
Watch the UK in October, when the next budget is presented. Its not that there will be specifically labelled direct costs. Its rather that the total costs spread through the whole ecoonomy will lead to Minsky’s third stage, when public finance becomes a Ponzi scheme, when the proceeds of borrowing are used to pay interest on the previous borrowings. The UK is right on the brink of this right now, and high energy prices and the costs of Net Zero are a substantial, perhaps the main, contributor.
Burn You Down (how the Chinese call them) has a debt of no less than 54 billion Dollars. And their inflated numbers are completely based on selling the cars to the dealers which they own themselves. After this we have used zero milage cars, and even this low price isn’t convincing the Chinese to buy the cars. Some of the problems Chinese are complaining about, inferior materials used in production and the rusting that starts within a year…
China Daily is hilarious it is en obvious CCP propaganda media
Oh noes, we are going to miss out on the collapsing EV market, while lucky China is all in as the bubble pops.
Remember, increasing taxes is good for you unless they are called tariffs.
Ask any democrat. They always favor increasing taxes. They just are opposed to Trump, so if it was his idea, then its a bad one.
It is so hilarious and they don’t even realize they are doing it. Then, when you point it out to them, they scream at you to shut up.