Elon Musk Is Wrong

By Jim Mathews / President & CEO

So now Elon Musk thinks Amtrak should be privatized because it’s not as good or as fast or as extensive as China’s high-speed rail network. Tell me you don’t know what you’re talking about without saying the words, “I don’t know what I’m talking about.”

He appeared at a Morgan Stanley investment conference and was quoted as saying “Amtrak is a sad situation. If you’re coming from another country, please don’t use our national rail. It can leave you with a very bad impression of America.” Musk also trotted out the old anti-Amtrak talking point that Amtrak operates at a net loss and relies on Federal subsidies. All those other national railways which Musk implies are better...ALSO operate at a net loss and rely on state subsidies.

Musk then went on to extol the virtues of China’s impressive high-speed rail network to make the case that Amtrak needs to be privatized.

Sigh.

Since the early 2000s, China’s government has invested $1.5 trillion – with a T – in high-speed rail. What China has done is not even remotely connected to privatized enterprise, but instead is the result of intense, sustained, policy-driven state involvement, not just in dollars but in legal imperatives. In fact, if Amtrak got the same level of government support and decades-long sustained investment as the China State Railway Group has enjoyed since at least 2004, it’s quite possible we *would* have a world-class high-speed rail network reaching every corner of our country.

Let’s compare-and-contrast. Planning and approval time for new service in China? Between two and five years. In the U.S.? Twenty years or more. Construction cost per kilometer in China? Between $17 million and $30 million per kilometer. Europe is not far behind at $25 million to $50 million per kilometer. In the U.S., what we’ve seen so far approaches $200 million per kilometer, although we’re really only starting now to build meaningful high-speed rail so it’s not a fair apples-to-apples comparison.

Speed of project delivery? A breathtaking difference: China is building high-speed rail at a rate that’s anywhere from five to ten times faster than any other country. In the early 2010s, China was building high-speed rail at a dizzying 2,500 kilometers per year, or 1,553 miles. Every year. That’s slowed down now, but even today they’re building at a pace the rest of the world can’t match. From 2021 to 2023, China built about 1,500–2,000 km annually, or roughly 932 to 1,243 miles each year. In the U.S., the best estimate is a bit less than 100 kilometers – that’s just 62 miles. Each year.

Today China’s 42,000 kilometers (or 26,000 miles) of high-speed corridors give that country more operational high-speed trackage than all the other countries’ high-speed networks combined. And China’s target is 200,000 kilometers, or just over 124,000 miles, by 2035. Our target in the U.S. for 2035? To start delivering a few dozen Superliner coach replacements to Amtrak, and finish the (long, long-overdue) rehabilitation of Civil War-era tunnels and 100-year-old bridges. Maybe. If we don’t lose the funding.

Three things make China's high-speed success possible: enormous amounts of sustained government funding, a policy commitment across many decades to carrying out that investment, and a top-down, government-driven, utterly non-democratic way of deciding where trains will run and getting the land they need to run them.

Now obviously, adopting the whole Chinese model wouldn’t work in a democracy. For example, local citizens have virtually zero voice in land-use decisions and planning. If the central planners think a high-speed rail viaduct should go where your village is, the government seizes the land, forcibly relocates the population (for nominal and often inadequate compensation), and starts building.

For what it’s worth, democracy stood up this week and told Musk that privatizing Amtrak would be up to Congress. In a private luncheon meeting with Senate Republicans, Musk was forced to acknowledge that privatizing Amtrak (or the other target, the U.S. Postal Service) would require congressional approval. In that same meeting, Musk didn’t elaborate on just how he would accomplish privatizing either one.

But there's no reason democracy is doomed to be inefficient. There are a lot of things China does right, and we could – and should – learn from those things. For example, China often relies heavily on land-value capture to recoup the costs of developing a high-speed service in an area. We know that passenger rail, fast or slow, creates economic prosperity in the communities it serves. The Chinese government captures a slice of that value as economic activity expands in the zones around the stations. That’s not a crazy concept, it’s not unfairly punitive to business, and it's used widely and successfully throughout the world and even in U.S. transit projects.

In China, high-speed rail is formally, in writing, a strategic national priority. It underpins economic strategy throughout the country, and rail service is incorporated into urban planning just about everywhere. You can read more about it in this translation of the official “Medium and Long-Term Railway Network Plan” and its latest update.

Designs are standardized for easy construction. Components are mostly prefabricated, and simplified to do the job needed but nothing more. More than half of China's network runs on elevated viaducts, eliminating or reducing a lot of the land-use conflicts that slow rail planning in the U.S. to its current glacier-like pace. There are dedicated construction and engineering organizations which, while organized to look like independent companies, are in fact state-controlled enterprises with guaranteed work and funding. The uncertainty of the investment environment in the U.S. is largely non-existent.

Maybe Elon is on to something. Privatizing Amtrak is a dumb idea. But doing high-speed rail like China does it – minus the totalitarian flourishes – might be a productive path forward. We could call it “High-Speed Rail With American Characteristics.” I’d love to see us start building 932 miles per year of grade-separated high-speed rail infrastructure. China is set this year to spend about $120 billion in government HSR funding, and will do it each year for the foreseeable future. That’s a deal I’d be happy to make.