In 2018, the city of Shanghai lured Tesla in to build a gigafactory with what seemed like an especially attractive offer. For years, foreign automakers like Ford, GM, Volkswagen, and Toyota had dominated the Chinese car market—the world’s largest—but were required to form joint ventures with Chinese firms for the privilege of doing business in the country. Shanghai told Tesla it could fully own its Chinese operations. Subsidies for land and cheap loans were proffered as well.

Tesla’s Shanghai gigafactory was completed in 168 days. It quickly became Tesla’s largest in the world. And it was fed by a network of local component suppliers that cropped up around it. The only problem—for Tesla, anyway—was that those local firms eventually became the basis for a Chinese supply chain that supercharged the nascent electric vehicle sector in the country. Nearly overnight, firms like Nio and BYD were producing plug-in cars that could rival Tesla in cost and quality. As with solar, a wave of entrants battled for market share, causing profits to evaporate but giving consumers great choices at excellent prices.

The Chinese really mastered the art of using capitalist logic to benefit the people consumers.