Tesla's newly unveiled Roadster is a reminder that the United States can still produce breakthroughs that capture the world's imagination. The car can accelerate from zero to 60 miles per hour in less than a second and perform maneuvers that once belonged in science fiction.

The engineering is thrilling, and Tesla earns an A for design innovation. But the harder question, according to Rick Lazio, a former Republican congressman from New York who served on Polaroid's board, is whether the company can commercialize even the base Performance model — a version that includes the fan-powered suction system but none of the thrusters behind the Roadster's headline-grabbing acceleration or airborne stunts. The alternative is that Chinese manufacturers, armed with state-supported supply chains and generous R&D incentives, make comparable technology affordable first.

Chinese automakers are already gaining ground in Britain with vehicles that combine advanced technology and aggressive pricing. The Jaecoo 7, a Chinese-built SUV from Chery's Jaecoo brand nicknamed the “Temu Range Rover,” became Britain's best-selling new vehicle in September, according to Autocar. Chinese brands captured nearly a quarter of the country's new-car market that month.

American ingenuity is not the problem, Lazio argues. The challenge is converting it into affordable products at scale — something China has become remarkably effective at doing. The next auto race will be decided by whichever country can excel at both.

Shielded from competition

Americans have been largely insulated from direct competition with Chinese automakers. In 2024, the United States imposed a 100% Section 301 tariff on Chinese electric vehicles — a trade-remedy provision of the Trade Act of 1974 that allows Washington to impose duties in response to foreign trade practices it deems unfair — effectively closing the market to them in order to prevent heavily subsidized vehicles from undercutting domestic production.

The rationale is understandable, Lazio concedes: companies operating in a market economy cannot compete on equal terms with a state-directed industrial system. China spent years supporting battery production and vehicle manufacturing, giving its automakers advantages that tariffs are meant to counter.

Tariffs cannot build a better car

The problem, he contends, is that protection alone cannot make an American factory more productive, lower the cost of a battery, or bring a better vehicle to market.

American automakers have learned this lesson once already. During the 1970s and 1980s, Japanese competitors won over American consumers with better fuel economy and higher quality, and they found more efficient ways to build cars. American companies were slow to respond. One recent analysis estimates the Big Three needed 10 to 15 years to catch up with Japanese advances in production efficiency.

Policymakers recognized that American companies needed a stronger reason to invest in innovation. Congress responded in 1981 by creating the federal research and development tax credit amid concern about declining private-sector R&D spending and U.S. competitiveness. The same principle applies today, Lazio writes: new discoveries matter only if companies have the incentive and capital to bring them to market.

China enters this race with advantages spanning the battery supply chain and the factory floor. The International Energy Agency reports that China remains the world's largest EV manufacturing hub, and vehicles shipped from China accounted for 40% of global electric-car exports in 2024.

China also holds a cost advantage. Battery pack prices fell globally in 2024, but the decline was steeper in China: an average drop of about 30%, compared with 15% in the United States, according to IEA data. Tariffs have kept much of that cost advantage out of American showrooms, but they have not closed the underlying price gap.

That leaves the United States with a commercialization problem. Its research and engineering remain world-class, but its record of getting ideas to market and improving how products are made has been less stellar.

Lazio saw the consequences of that gap firsthand while serving on the board of Polaroid, which he calls one of the most brilliant technology companies of its era. Its scientists understood the future of digital photography, but the company could not bring the right product to market. Others, including Japanese manufacturers, jumped in with both feet, and Polaroid ended in bankruptcy. Brilliant technology, in his view, does not guarantee commercial success.

Back the companies willing to take risks

The United States needs an advanced manufacturing ecosystem that includes more than behemoths with access to capital markets and giant lines of credit, Lazio argues. It must also include smaller, nimbler companies that take risks, develop intellectual property, and solve production problems that larger manufacturers can then scale.

Those smaller companies need better access to capital. Federal policy now allows businesses to deduct domestic research costs immediately, leaving more capital available for engineers, prototypes, and equipment. Some states, however, have declined to adopt the federal rule over concerns about near-term revenue losses — protecting state budgets but leaving businesses within their borders with less money to invest.

Policymakers should acknowledge that trade-off, he writes. Federal and state taxes can eat the seeds of innovation. He is not arguing for no taxes, he clarifies, but a dollar paid in tax cannot also finance an engineer's salary or a new production line.

China has deliberately used tax policy to encourage sustained research. Its R&D super-deduction differs from the American credit, so the headline percentages cannot be compared dollar for dollar. The broader lesson, he says, is clear: countries that reward research give manufacturers more reason to invest.

Research incentives are only part of the answer. New technology will not help if American factories cannot produce it efficiently. Automakers and their suppliers need incentives to invest in robotics and advanced equipment, and smaller suppliers deserve particular attention because they often lack the capital available to their largest customers.

Companies also need dependable rules, because they cannot plan a battery plant or a major factory upgrade around policies that may disappear. Government, in Lazio's view, should set a clear course and let businesses decide which technologies make commercial sense.

Tesla's new Roadster shows why that investment environment is essential. Making such technology affordable will require advances across the automotive supply chain, including contributions from smaller manufacturers willing to take risks that larger companies may avoid. How quickly the base Performance model moves from reveal to showroom, and at what price, will offer an early test of whether that commercialization gap has narrowed.

Chinese automakers' gains in Britain show how quickly consumers will consider a new competitor when the product delivers, and American buyers will make the same judgment based on quality and value, he writes.

Protection may delay the competition, but it cannot determine the winner. America, Lazio concludes, must become better at turning breakthrough ideas into products the world can afford.

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