Rescuing the auto industry

The Great Recession of 2007 - 2009 placed the troubled global automakers at the mercy of politicians from their host governments. In exchange for temporary subsidies of various sorts, global automakers made a variety of commitments to bring PEVs to the marketplace. The PEV industrial policy in the US was the first. It was substantial in both ambitions and resource commitment (roughly $20 billion since 2010). China’s plan came next and it was even more ambitious and well-funded (more than $50 billion). The PEV industrial policies in the US and China experienced numerous implementation problems; they exposed the difficulty of putting government in the role of venture capitalist. Europe and Japan were far more limited and tentative in their commitments to PEVs. Europe, prior to 2015, remained faithful to its pro-diesel strategy. Japan continued to favor HEVs in the short run and FCVs in the long-run. With the benefit of hindsight, one of the most important developments in the recovery era was the ability of California startup Tesla to survive the Great Recession. Survival was not simply the result of corporate nimbleness and Wall Street enthusiasm; industrial policies and regulatory initiatives from the Obama administration, a Democratic-majority Congress, and the State of California nurtured Tesla through difficult times.