Trump Is Accelerating The Green Energy Transition Everywhere But Here
The war in Iran has shifted the green transition into hyperdrive. Soaring oil and gas prices, coupled with the clearest possible demonstration of ongoing political risk, has shown the world the desirability and need to move rapidly to clean energy, even apart from global warming.
BYD, China’s leading car maker and producer of electric vehicles, shows the Trump effect most clearly. Its August sales were more than 130% above their year-ago level. Apparently, they would have been even higher if they were not constrained by shipping capacity. The company is now projecting overseas sales of 2.5 million for 2027, almost 2.5 times the 2025 level. It has plants now operating in Brazil and Indonesia and will have one in Hungary before the end of the year. EVs are now nearly 70 percent of the Chinese car market, by far the largest market in the world.
As I noted before, the shift to EVs is largely a one-way street. People who buy EVs rarely switch back to gas-powered cars. That means the shifts we’re seeing now will be enduring and built on in future years. As EVs become more common, the infrastructure to support them gets built out. Also, more people will recognize the benefits of EVs when they see friends, neighbors, and co-workers driving cars with lower fueling and maintenance costs.
And EVs keep getting cheaper and charging times shorter. This will push even more people to opt for EVs.
There is a similar story with solar and wind power. China has been adding wind and solar on a massive basis for several years. It will add more than 140 gigawatts of electricity capacity this year, an amount that is roughly equal to 10 percent of total U.S. electric capacity. In addition, its wind generation capacity is rising by close to 80 gigawatts in 2026.
Many developing countries are now also rapidly adding clean energy. Pakistan now gets 25 percent of its electricity from solar. India’s orders of solar panels from China increased by 150 percent from February to March. Nigeria and other countries in Africa are also speeding towards solar, with imports from China rising 176 percent.
The economics of clean energy keep improving. In addition to the price declines for EVs, which already cost far less than cars in the United States, the price for batteries for storing energy is also plummeting. It has fallen by more than 75 percent in the last decade. And the rapid pace of price decline is likely to continue, especially as sodium batteries displace lithium ones. Sodium is cheap and plentiful and has features, like better safety and performance in cold weather, that make it more desirable for many purposes than lithium.
Even ignoring the impact on global warming, which would be crazy in this year of record temperatures and devastating wildfires, clean energy would be dominating fossil fuels on narrow economic considerations. The transition was already happening largely for this reason, but Trump and Netanyahu’s war on Iran undoubtedly hastened the pace. Donald Trump’s America may be in last place, but that won’t change the direction the train is going.
Dean Baker is a senior economist at the Center for Economic and Policy Research and the author of the 2016 book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Please consider subscribing to his Substack, from which this is reprinted with permission.
