Dunne Right In
We are not this yellow in person (but we are this bald)
I like Michael Dunne.
He’s smart.
He’s got a niche.
He might be the foremost expert on Chinese automotive in North America.
He puts together a damn fine slide deck.
He recorded a fantastic podcast episode with me in 2024.
We had beers before we both presented at ACE that year to talk about the state of the auto industry (that’s where this photo was taken).
He’s got a book coming out in January that you probably want to pre-order.
And we have the same barber.
The TL;DR
Michael wrote a fantastic piece that appeared in The San Francisco Standard this week that I suspect might be a Reader’s Digest version of the argument he makes in his yet-to-be-released book.
He argues this: China has basically already won; its dominance in automotive production and exports is now unquestionable; US tariffs have bought some time for US auto makers; Detroit has wasted that time; and for the US auto complex to continue, its best hope is Silicon Valley.
“This year, China will manufacture 35 million vehicles. That’s more than the combined output of the U.S., Germany, Japan, and Korea. Chinese automakers, led by BYD and Geely, will export a record 12 million cars, up from just 1 million in 2020. To put that into perspective, this year China will export more cars than the U.S. will build. China now ships cars to every major market in the world except the United States. (The U.S. has imposed heavy tariffs of 127.5%, as well as regulatory software bans, on Chinese cars.)”
Also, Michael points out that the future isn’t just electric; it’s electric and autonomous.
A potential path forward, he suggests, is to combine the technological advantages of big tech like Google’s Waymo, Amazon’s Zoox, Rivian’s Autonomy Platform, and Tesla’s Cybercab (or the like) with the manufacturing might of folks like Ford, GM, and Stellantis.
He didn’t actually call out Rivian, but I added it here for good measure.
The insinuation is that Ford, GM, and Stellantis will have to play a secondary role while the tech folk lead the way.
Self-Inflicted Wounds
There are a couple of problems with Michael’s argument.
US automakers need to survive the financial impacts imposed by their own government before they have any chance to push back against the Chinese auto threat.
GM incurred gross tariff costs of $3.1 billion in 2025 and expects similar costs in 2026.
Stellantis suffered a 1.5-billion-euro ($1.7 billion USD) hit from tariffs.
The Donald’s tariffs hit Ford with a $900 million tariff blow in 2025. They are currently projecting another $1 billion hit for 2026.
And that was all before the orange man in the White House escalated the Canada-US trade war, suggesting that auto tariffs could be raised to 50%.
These companies need to survive two more years of Trump-o-nomics, and with all the tariff hits, it’s getting more expensive to be an American automaker.
US Electrification Slowdown
In the interim, Ford, GM, and Stellantis's North American division are all retreating from electric vehicle production.
“It soon became clear that Ford — which went on to retire the Lightning, an electric variant of its best-selling F-150 pickup — was not the only manufacturer to have suddenly developed a case of cold feet. In July 2024, General Motors said it was delaying the introduction of a Buick E.V. S.U.V., and the following September, Volvo dialed back plans for an all-electric lineup of vehicles that would have debuted in the United States. In 2025, Dodge followed suit, axing a battery-powered Charger and its long-anticipated E.V. Ram pickup truck. Two plug-in hybrid Jeeps were sent to the scrap heap in the sky, as were several e-sedans that Honda and Nissan had designed for the U.S. market.“
There are some EVs in Detroit’s plans, but not enough, and they are not innovating at the pace China is.
Chinese car brands take about 18- to 24-months to develop a new vehicle model, which is about half the 48- to 60-month cycles typical of North American and European automakers.
These next couple of years are going to be crucial.
As I mentioned in last week's news round-up, EV sales are on track to hit record highs this year, with 29% of all new cars purchased worldwide expected to be either battery-electric or plug-in hybrids, according to a recent report from the International Energy Agency.
That’s gonna make it hard for Ford, GM, and Stellantis to compete with the future EV auto economy.
They might really need big tech to help them out.
Different Dance Partners
It turns out that big tech doesn’t want to help.
Michael highlights that Google is already working with Zeekr, a deal signed 5 years ago, to produce its next-generation Waymo Ojai autonomous vehicles.
The Waymo Ojai (Zeekr Hardware, Google/Waymo Software)
Google did try to work with Ford back in 2016.
The folks at the Googleplex in Mountain View had decided not to build their own vehicles and were looking for a dance partner to help scale up the Waymo fleet (before it was even called Waymo).
Talks fell apart.
Ford wanted to date Google exclusively, and Google wanted to play the field a bit more, so the deal fell apart.
“Sources with knowledge of the talks said the deal came undone because Fields' enthusiasm for Wall Street's reaction didn't mesh with Google's desire to lay the groundwork for a quiet, technical partnership in which each side learned from the other before deciding how to move forward.“
Google knew that its not-yet-named Waymo Driver could be deployed across a wide range of vehicles. They didn’t want to be locked into a single-source provider relationship with Ford.
When CES rolled around in 2017, a long-awaited rumour about the Ford/Google partnership was absent from the press release coverage.
Instead, FCA (now Stellantis) and Google announced a first-of-its-kind collaboration.
Google agreed to install its autonomous system in the 2017 Chrysler Pacifica Hybrid minivan, and Stellantis agreed to let Google date other automakers (like Jaguar and Zeekr).
Everyone Else
What about Zoox, Tesla, and Rivian? Do they want to dance with Detroit?
Rivian already has a deep relationship with Volkswagen.
As long as Wolfsburg keeps sending the cheques, Rivian isn’t likely to partner with anyone else.
Tesla has Gigafactories around the world, and the Model Y continues to be one of the best-selling cars globally.
Elon has earnestly tried to share his autonomous tech with other OEMs.
But no one wants it.
As for Zoox, they have a tech billionaire of their own and are actively building out production capacity at their 220,000-square-foot facility in Hayward, California.
Zoox Clawiter Facility In Hayward, California
This space will help Zoox grow its robotaxi fleet, eventually producing 10,000 vehicles a year once it’s at full scale.
The tech-to-autonomous auto ballet is already underway, and Detroit wasn’t invited to the dance.
Adding to the complexity, Amazon is also heavily invested in Rivian and buys thousands of its vans.
So that’s a thing too.
America’s Problem Is Americans
Michael touches on something I think is much more important than any of my other counterarguments.
Americans don’t want to buy electric cars.
Last year, an AAA survey showed that EV interest in the US is at its lowest point since 2019.
Only 16% of Americans reported being “likely” or “very likely” to purchase an EV as their next car (in Canada, it is over 50%).
Maybe we could collectively do a better job of explaining the potential fuel cost savings now that EVs cost roughly the same as their gas-powered counterparts.
A recent MIT study concluded that we’ve basically reached price parity between electric and non-electric vehicles. Their modelling showed that in most places across the US, EVs were competitive with comparable combustion-engine vehicles in terms of lifetime ownership costs, even without incentives or tax credits.
It costs $0.42 per kilowatt-hour on average to charge an electric vehicle.
With gas averaging more than $4.00 per gallon in the US, it might seem like a good time for Americans to buy an electric vehicle.
That’s not happening.
In fact, the International Energy Agency (IEA) projects that electric vehicle sales in the US will fall from 1.5 million to 1.2 million this year.
It probably doesn’t help that The Donald used an August 5 speech in Las Vegas to mock electric vehicle owners, telling the crowd that EV drivers "have a disease" and calling them "crazy" for their choice of vehicle.
I guess he forgot that he owns three electric vehicles: the Tesla Model S he bought from Elon on the White House lawn, the Cybertruck that Adin Ross gifted him, and the original Tesla Roadster he’s had for years in his personal car collection.
Self-awareness isn’t one of The Donald’s strong suits.
IMHO
Michael’s argument isn’t wrong.
I just don’t think he followed all the threads of his argument to all of their logical conclusions.
The next decade is going to be interesting.
The future is electric and autonomous.
The Chinese are not slowing down their predominantly electric global automotive expansion.
Their production cycle is half that of other auto-producing nations.
Meanwhile, North American automotive innovation is largely being hamstrung by Americans. For Detroit to survive, it will have to learn a different dance.
By contrast, Waymo, Zoox, and Tesla keep pushing out more and more robotaxis into more and more cities. And they don’t need anyone’s help to do it.
Uber is also building an autonomous vehicle empire of its own.
And a bevy of Chinese tech companies, such as Baidu, Pony.ai, and WeRide, are attempting to do the same.
Ride-sharing services (with drivers) already challenge the math behind the cost of car ownership. To prove that point, Uber ran an experiment in Australia and Canada back in 2024 called the “One Less Car Trial”.
Today, commuting exclusively by Uber is often more expensive in the US, but mixed-mode commuters who combine transit, walking, biking, and ride-shares pay less.
As self-driving fleets expand and autonomous driving capabilities become more common in our personal cars, this will further reshape the question of whether people should own vehicles at all.
And that question will get even more problematized after an entire generation of city-dwellers don’t bother to learn how to drive because the cars they subscribe to already drive themselves.
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