Welcome back to The Strawman, the daily climate newsletter that’s always fully charged—unlike some of Phoenix Motor’s buses. Today, we’re looking at how one of China’s top green entrepreneurs is struggling to make it in the US.

The Roadblocks of Phoenix: Can Denton Peng Crack the US EV Market?

Denton Peng, once China’s youngest billionaire and “solar king,” had big dreams of electrifying America’s bus fleet when he moved to California in 2018. Fast forward to today, and those dreams are running on fumes.

Despite $4.9 billion in federal subsidies for zero-emission buses, Phoenix Motor has delivered just 40 buses this year—hardly a traffic jam. With production delays, rising costs, and stiff competition, Peng’s company is facing two Nasdaq delisting warnings and bleeding money every year.

The challenge? Competing with China, where EV production moves lightning fast thanks to a cheaper, more efficient supply chain. Peng himself admits that what takes a month in China takes five in the US.

Buy America or Bust: The Cost of Going Local

Federal subsidies come with strings attached—namely, the Buy America rule, which requires Phoenix to source over 70% of parts domestically. Sounds great in theory, but in practice? It’s a logistical nightmare.

The US EV supply chain is still in its toddler phase, meaning slow production times and higher costs. Phoenix can't tap into China's world-class suppliers for key parts like batteries without forfeiting subsidies, making it tough to stay competitive.

Without those subsidies, Phoenix’s buses would be too expensive for most buyers. It’s a classic Catch-22: go local and struggle with costs, or source from China and kiss government support goodbye.

Can Phoenix Rise... Before It’s Too Late?

Phoenix’s stock price has been hanging below the $1 mark for most of the past year, putting the company at risk of getting kicked off Nasdaq. Peng is running out of time and options, and he’s banking on survival until 2035—when California bans gas-powered vehicles.

His backup plan? Build factories in China to serve international markets and, if policy allows, the US as well. But that’s a long game, and with Trump eyeing a return and promising to roll back EV support, Phoenix may not have time to wait.

If Peng can’t crack the code soon, the American dream for Phoenix might end up as just another cautionary tale of how tough it is to compete in the EV space.

The Strawman Takeaway

Phoenix’s struggles highlight the growing pains of the US EV market. Despite ambitious goals and hefty subsidies, building a sustainable domestic industry remains an uphill battle.

For now, it’s a race against time—can Phoenix rise from the ashes, or will it be another victim of America’s slow-moving supply chain?