The Case for Making Up with China, and Which Car Company Is Winning the Energy Crisis?

What It Covers

Scott Galloway addresses two listener questions: whether the US should repair its relationship with China given China's rise as a dominant force in EVs, AI, and manufacturing, and which automaker is best positioned to win as surging oil prices from the Iran conflict accelerate global EV adoption.

Key Questions Answered

• •China's Innovation Threshold: China became the first middle-income country to crack the top 10 globally on the 2025 Innovation Index, ranking tenth ahead of Germany and Japan, achieving this at a GDP per capita of roughly $13,000 — one-sixth of America's. No country has reached this benchmark at that income level before, signaling a structural shift worth tracking for investment and policy decisions.
• •US-China Trade Reset: Galloway argues the single largest effective "tax cut" available globally would be a US-China trade normalization. Combining US strengths in IP, innovation, and capital formation with China's unmatched supply chain and manufacturing would reduce the cost of goods worldwide by an estimated 3–10%, making diplomatic engagement a higher-leverage economic move than continued tariff escalation.
• •BYD as the Energy Crisis Winner: BYD and Geely are positioned as the primary beneficiaries of rising oil prices. Geely shares rose nearly 50% since the Iran conflict began. In Australia, EV loan volumes spiked 162% in March alone. Galloway frames BYD as the Southwest Airlines or Old Navy of EVs — roughly 70–80% of Tesla's quality at 40% of the price.
• •Western Automakers' Mistimed Retreat: Ford, GM, Stellantis, and Honda collectively wrote off $70 billion in EV investments when demand softened, then deprioritized EVs entirely. The Iran-driven oil price surge has reignited EV demand precisely when these manufacturers are least prepared, reinforcing that exiting a category during a demand trough typically means missing the subsequent acceleration.
• •Tesla's Structural Vulnerability: Tesla lost nearly half its European market share in 2025, with US sales down 8% in March. Galloway attributes this to Elon Musk's political profile creating brand damage and a product lineup that has grown stale. Tesla may benefit from US tariff protection as an accidental domestic winner, but globally, BYD holds the intentional structural advantage.