The Electric-Car Lesson That China Is Serving Up for America

Would you drive an electric sedan with a single-charge range of more than 400 miles and automated driving functions, one that costs less than a Tesla Model 3 and, at least according to the manufacturer, can pull off a 2,000-mile road trip along chaotic highways during which the person behind the wheel needed to steer only about once every 60 miles? Those are the advertised specs of the P7, the sleek new model launched last year by China’s hot start-up XPeng.

The Chinese government would certainly be pleased if you did: Another important feature of XPeng cars is ample state support. In the past year, the company has signed deals with investment funds linked to the city of Guangzhou, Xpeng’s hometown, and the surrounding province, Guangdong, worth $700 million. XPeng has also gotten preferential terms on land, low-interest loans and tax breaks, and state subsidies that have helped it reduce the P7’s showroom price.

“The government is actually a lot more open to allow some of the innovative ideas of businesses to … push forward with their research and test their technologies,” Brian Gu, XPeng’s vice chairman, told me. That’s exactly what worries Washington. Fueled by government largesse, China’s electric-vehicle sector has raced ahead of America’s, sparking fears that the United States has fallen dangerously behind its chief rival in a crucial future industry.

Read more