The Commanding Heights Of Global Transportation


On September 24, SAFE launched The Commanding Heights of Global Transportation, a paper that assesses the competing ambitions of the United States and China for the future of global transportation, and offers policy recommendations to maintain U.S. leadership in this critical industry.

Click here to watch the launch
Click here to read the report

A bipartisan, federal response is required for the United States to compete with China’s ownership of the next generation of transportation, according to The Commanding Heights Of Global Transportation, which emphasizes the need to compete with China as a national security priority.

Government policies worldwide prioritizing lower-carbon economies, in addition to hundreds of billions of dollars spent and pledged by authorities and automakers on non-petroleum fuels, have made a transition to connected, autonomous, shared and electric vehicles a certainty. The Chinese government prioritized leadership in these new technologies as part of its Made In China 2025 strategy, through which it seeks to gain greater global authority and reap the significant economic rewards.

The Commanding Heights Of Global Transportation, found China controls nearly 70 percent of global electric vehicle (EV) battery manufacturing capacity, while North America has less than 10 percent. This vast control includes:

  • Direct or indirect control of 70 percent of the world’s lithium supply, 61 percent of the cathodes and 83 percent of the anodes used in batteries.
  • Ownership of 80 percent of the rare earths supply needed for U.S. weapons systems and EVs, and control over the processing of this supply.
  • China produces roughly 75 percent of the permanent magnets that use rare earths, another critical component for EV motors
  • By 2020, 107 of the 142 lithium-ion battery megafactories under construction worldwide are, or will be, located in China. Just nine are planned for the United States.
  • More than twice as many EVs sold cumulatively in China compared to the United States. 421,000 of the 425,000 electric buses worldwide are on Chinese roads.

The Commanding Heights Of Global Transportation contains comprehensive recommendations that enable the United States to compete with China by:

  • Supporting the advanced fuel vehicle market and domestic manufacturing
    • Reforming the federal tax credit for EVs and expanding a tax credit for medium- and heavy-duty EVs.
    • Tax credits and funding that fosters the retooling, expansion and establishment of advanced transportation manufacturing.
  • Developing a critical minerals supply chain that is not controlled by China
    • Includes creating a domestic rare earths processing cooperative to ensure uninterrupted supply of the minerals required for U.S. high-tech and defense system applications.
    • Recycling policies for EV batteries to create a closed loop resource supply chain.
  • Advancing next-generation transportation technology
    • To compete with Chinese companies, allowances for deploying novel design autonomous vehicles (AVs) on public roads must be expanded from 2,500 to 100,000 per manufacturer as long as they are as safe as current vehicles.
    • A clear pathway for regulatory reform and certainty at the federal level, as developers currently must contend with a patchwork of regulations at the state level, while China can make rules by fiat.
  • Combating predatory economic practices
    • Includes issuing an antitrust waiver to allow U.S. automakers to work together with global industry to address issues related to doing business in China and supply chain issues.

The comprehensive recommendations also include:

  • Working with allies to diversify supplies of minerals not readily available in the United States;
  • Expanding the Advanced Technology Vehicles Manufacturing Loan Program to include associated components such as batteries, anodes and cathodes;
  • Preserving the 5.9 GHz band (the “Safety Band”) for vehicle connectivity;
  • Investing in nationwide advanced fuel vehicle charging and refueling infrastructure; and
  • Strengthening alliances with international partners to respond jointly to China when needed.