Batteries, Not AI, Will Define the Next Geoeconomic Era: Chinese Dominance and the Western Response

Martin Kenney

No 188, ETLA Brief from The Research Institute of the Finnish Economy

Abstract: Abstract The global transition toward electric vehicles and renewable energy represents a fundamental shift in the world’s techno-economic paradigm. Drawing on discussions during my June 2026 visit to ETLA in Helsinki, this brief argues that the true engine of this transformation is the battery, the foundational technology uniting production and consumption in the emerging electric age. This memorandum is published alongside a companion brief by Petri Rouvinen (2026) examining the EU’s response to this shift, the proposed Industrial Accelerator Act (IAA). Through decades of deliberate industrial policy, China has secured command over the entire clean technology triad of solar power, batteries, and electric vehicles. Meanwhile, Western automakers, particularly in the United States, risk being stranded on a shrinking island of internal combustion engine technology amid political whiplash. In this brief, I synthesize the mechanisms driving China’s rise, examine the strategic implications of the electric technology stack, and offer insights for decision-makers seeking to build a competitive and resilient industrial future.

Keywords: Electric vehicles; Battery supply chain; Geopolitics; Industrial policy; Energy transition (search for similar items in EconPapers)
JEL-codes: F13 L52 L62 O38 Q42 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2026-09-25
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.etla.fi/wp-content/uploads/ETLA-Muistio-Brief-188.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rif:briefs:188

Ordering information: This working paper can be ordered from
https://www.etla.fi/ ... he-western-response/

Access Statistics for this paper

More papers in ETLA Brief from The Research Institute of the Finnish Economy Contact information at EDIRC.
Bibliographic data for series maintained by Kaija Hyvönen-Rajecki ().