TRASHFUTURE - *PREVIEW* Love Minnection ft. Victoria Scott

Episode Date: August 22, 2025

Auto journalist Victoria Scott joins us to discuss a question that’s been on Riley’s mind for a while… why is the American auto industry “like that”? Also, we discuss a hot new company called Minnect that we’re all excited to jump ship for right away. Get the whole episode on Patreon here! TF Merch is still available here! Trashfuture are: Riley (@raaleh), Milo (@Milo_Edwards), Hussein (@HKesvani), Nate (@inthesedeserts), and November (@postoctobrist)

I have had this question that I wanted to explore with Victoria, since I saw you a few weeks ago, and we were talking about this briefly, which is what the fuck is up with the American auto manufacturing industry? Why is it the way that it is? And how come at a time where nothing seems more important than the electric electrification of transport? The American auto industry has allowed the electric electrification of transport to be taken forward by a series of hucksters, including but not limited to Elon Musk. And then the rest of the auto production capacity seems to be devoted to like, the Ford F-150 Big Dick edition that has like a two-foot square truck bed and then like a V-14 engine. Yeah, well, so, you know, obviously you've pointed out correctly in the conversations we've had in the past that, you know, China realized sometime in the 2000s

that they were not going to overtake us in internal combustion cars because we just had like a hundred year head start and most of what they were making at this point was like cars under license or badge engineered stuff from like Azuzu or, you know, various Japanese companies. So they were like, okay, what if we do like battery electric cars? And they started doing this around the same time that, you know, Tesla was launching its first model,

which was the roadster, if you remember that, which was kind of like a lotus chassis with a bunch of batteries strapped into it. They made like 4,000 of them. It's primarily notable as the vehicle in Tony Stark's garage to signal that he's like cool with it. Back when tech and entrepreneurs were like people that were admired instead of reviled. And, you know, the pet theory that I've developed kind of in the intervening. decade is that the U.S. economy is not structured to allow us to transition to really any other form of like transportation. We had the initial automobile revolution because we were operating under a system of, you know, Fordist economics. Is it okay if I just launched into this?

Is this a podcast? I just want to make sure that this is okay. This is, you know what this is, this is, we're workers on a board and Victoria is consulting us in a way that's non-binding. I feel so included The concept of like CEO with anxiety is just so funny honestly It's like all they talk about these days is the thing So Fordism is a term coined by Antonio Gramsci In the 30s where he described the American economy's structure

And he outlined it as a twofold project You create a new man who is capable of working in an assembly line And you do so by paying him a high stable wage you put him in a city that you have created and you create the moral code and rules around, and you essentially sculpts him into something that's compatible with the culture that you need to pump out cars. And in the process of paying him like a living wage so he can do all this stuff so you can have exercise his degree of control over his life, you turn him into a consumer of the product he was, he's building. So essentially, you know, the automobile revolution

at its earliest days when the Model T was first introduced was largely purchased by the people who made them. You know, there was a ready-made consumer base in the form of the factory employees. And the U.S. kind of stuck with this model up until sort of industrial decline in the 60s and 70s, and then we began offshoring, and we switched to kind of

like a knowledge worker economy and shuttered factories, and, you know, then we did Thatcher Reagan neoliberalism, and we're kind of familiar with where that's ending up right now. And so as companies stop focusing on, you know, making products that made money,

as a means of making money, they switch to, you know, increasingly financializing things. So, you know, loans, things of that nature. That is a whole, like, I thought about getting into that with this, but it's too complicated for a single podcast. You will have to have me back.

Well, I guess I run it now, so I'll just, that's the next episode. But one of the ways that, you know, they've kind of shifted the way that they make money is just transition from paying out dividends to doing stock buybacks. This happened in 82, I believe,

when Reagan changed the law to make it so you were allowed to do stock buy, and that just pumps up the stock value, basically, and it increases, you know, revenue per share to a point where, like, it's rewarding current investors for sticking with the stock. And this has become, like, how the U.S. economy works, and that applies to, like, the Big Three, for example. You know, it was just as recently as 2023 that the UAW called a strike over compensation at Big Three factories, because Stalantus, Ford, and GM had just sunk $5 billion into stock buybacks after they had been, you know, systematically cutting wages.

and, you know, freezing benefits for years. Like, this year alone, GM is allocating $6 billion to stock buybacks. Meanwhile, they spend about $9 billion a year on research and development. If we compare this, that's about 6% of their total revenue a year. B.D, which recently took the crown from Tesla to become the world's largest EV manufacturer, spends roughly 8% of their revenue on research and development. X-Peng, which no American has ever heard of, but makes quite desirable, EVs in China is sitting at 20% of its revenue on R&D.

Neo, which makes the adorable battery-swappable Firefly compact car that basically competes like the 500E and like sort of like smart city car style vehicle, which also cost $17,000, which is I think four or five grand less than you can buy any car at all in America for right now. They spend like 30% of their revenue on R&D. This is where you get the like automotive journalist goes to China, tries the cars and goes, wait a second, these are all really good genre of article, right? Yeah, this is, Kevin Williams is a friend of mine who's done a lot of the reporting on this. And he is, every time he goes to China, he comes back and he writes a headline that basically says, including literally, we are cooked. Like, he's done two articles. One of them was like

Tesla is cooked. One of them is like America is cooked. And they all come to the same conclusion, which is that, like, China is building affordable, desirable EVs without really having to, like, use the government to influence its consumers unduly to be like, oh, hey, we'll give you tax credits, we'll give you, like, you know, preferred parking road. It's like, no, they're good cars. People just want to buy them. But, you know, there's more on that in a second, because it is, it's so systemic. There's so many levels at which they've beaten us that if you were like, hey, Vicky, we've made you automotive czar. You have to remake America's economy overnight. But crucially, you can't do communism.

because that would be my first answer. I would be like, you can't fix it. That's just we are actually cooked. Anyway, you may be wondering to yourselves, like, okay, so you've told me about General Motors, which is like kind of emblematic of the old way of building cars. What about like some sort of interesting upstart from like a charismatic dynamo of an executive, like Tesla, let's say.

They spend 5% of the revenue on R&D, so it's actually less than General Motors. They're building all those humanoid robots. The move fast break things school does not actually spend very much money on breaking things. Anyway, the end result of this whole sort of picture of Americans not spending any money on R&D and China spending a ton of money on R&D is that China basically runs the board for patents right now. And through a combination of like a little bit of divine providence and a lot of it money, they controlled most of the supply chain for lithium iron phosphorus balance.

batteries, which are referred to as LFPs. These are way better than what most American companies were using up until recently because they don't contain cobalt, which is incredibly expensive, and requires, like, child slave miners to get, and are environmentally disastrous. They cost less money to make, you know, these LFP batteries, they are more energy dense, and they're, like, they're way better in every regard and China controls most of supply for them, which wouldn't necessarily need to be a problem, except in the U.S., we have a bipartisan consensus as the Biden administration basically banned Chinese cars from America, and then

Trump was like, hell yeah, we're definitely doing that. That's like the one thing that they kept an EV policy is like, we are not allowing Chinese cars on American roads. Yeah, we can't have anything good is the thing. Yeah, no. Well, because they would, correctly, they have assessed that if you allowed a Chinese car into the American ecosystem, it would immediately wipe out all competition. It would be like introducing like, I don't know, brown bears to the Galapagos, just complete ecological collapse. Or indeed humans to the Galapagos. You'll send a Chinese car to Ohio. I mean, all of a sudden, like, the person who, like, they'll get out of the car speaking perfect Mandarin.

I understand the governance. Yeah, reading the governance of China by Xi Jinping, like, in hardback because it was just in the glove compartment. It's just like, I understand now. I get it now. We have to sinusize all the mosques. To be fair, Xi Jinping, that's a guy who's investigating the mosques. Maybe he's been talking to Tommy Robinson. I think one of the things that you alluded to earlier, Victoria, is China's approach to this didn't happen overnight, and it wasn't particularly reactive.

The Chinese electric vehicle boom didn't start with people seeing TikToks of BYDs. It started in the 2000s, decades ago. It started like a quarter century ago. Yeah. where, like, again, there was a realization I'm quoting here for the MIT Technology Review. They realized they would never overtake U.S., German, and Japanese legacy automakers on internal combustion engine innovation. And research on hybrid vehicles whose batteries in the early years served a secondary role relative to gas engine was already being led by countries like Japan. The Chinese government took steps to invest in related technologies as early as 2001.

EV technology was introduced as a priority science research project in China's five-year plan, the country's highest-level economic blueprint. And imagine having a five-year plan. Imagine having a five-year... Imagine having a plan at this point. Yeah, the plan right now seems to just be concede that reform is right about everything and declare war on one Irish author. Just to build on the point about 2001 also,

it's not like EVs were totally unheard of because the real EV heads, remember, that 2001 was when General Motors discontinued the very, very forward-looking EV-1 program that was wildly popular, it became like the subject of the documentary who killed the electric car. I think I've talked about it here before.

But it was very much like, ooh, there could be something here. And America, at this stage, had spent a lot of money on trying to get EVs going. And they were like, actually, you know what? Hummer is coming out in like a year. We should absolutely double down on that.

Generational fumble.