How China Builds Nuclear Plants Cheaper, Construction's $860bn Problem, & Trump 2.0 Germany Effects

May 9, 2025

Explore how China builds nuclear reactors at a fraction of Western costs, the opportunity in modular nuclear, Germany's trillion-dollar infrastructure spending, and how robotics is changing solar installation—essential trends reshaping construction

Patric Hellermann

How China Builds Nuclear Plants Cheaper, Construction's $860bn Problem, & Trump 2.0 Germany Effects

tl;dr

China constructs nuclear reactors at significantly lower costs than Western countries

Standardization, volume, and workforce efficiency contribute to China's nuclear advantage

Small Modular Reactors (SMRs) present a promising solution for Western nuclear deployment

Germany has approved a €1.1 trillion infrastructure and defense spending bill

Construction robotics is gaining traction with practical applications in solar installation

Optimizing working capital flow represents a major opportunity in construction

When you are not incentivized to standardize, when you're building one power plant every 20 years, nobody does that.

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China constructs nuclear reactors at significantly lower costs than Western countries

We've been watching China's nuclear strategy with fascination. The numbers don't lie. Western nations are struggling with nuclear power plant construction while China is rapidly expanding its nuclear fleet at a fraction of the cost.

In the US, recent projects have ballooned to $37 billion for just two reactors—far exceeding the original $14 billion estimate and taking 15 years to complete. France isn't faring much better, with costs quadrupling from €3.3 billion to €13.3 billion for a single reactor, with construction dragging from 2007 to 2024. The UK's Hinkley Point C has seen estimates jump from $18 billion to a staggering $46 billion, with completion pushed to 2031.

Meanwhile, China has 30 nuclear reactors under construction with plans for 150 more between 2020 and 2035. Their total cost? About $2.7 billion per reactor—a stark contrast to Western prices.

This cost discrepancy isn't just a minor efficiency gap—it's a fundamental advantage that could reshape global energy markets. And it's not limited to nuclear. We're seeing similar patterns across electric vehicles, battery technology, and renewable energy infrastructure.

The implications for Western construction firms and energy policy are enormous. Without addressing these productivity gaps, we risk falling further behind in critical infrastructure development.

Standardization, volume, and workforce efficiency contribute to China's nuclear advantage

What's driving China's nuclear construction edge? It boils down to three key factors: standardization, volume, and workforce efficiency.

An anecdote from a European investor who frequently visits China illuminates part of the story. When he asked Chinese professionals why they construct so quickly, they simply replied, "We are really good at infrastructure." This understated response masks the systematic approach that enables their speed.

China has created a massive demand pipeline that drives standardization. In 2023 alone, they brought online roughly 100 new coal-fired power plants. Currently, they operate about 3,100 coal plants across the country. Compare that to Western nations, which have built only a handful of new power plants since 1990.

This volume creates predictability and incentivizes standardization. When contractors know they'll be building dozens of similar facilities, they optimize processes, train specialized teams, and develop standardized components. With nuclear reactors, this learning curve effect is particularly powerful.

The workforce approach differs too. As Martin observed from his site visit with Chinese contractors: "When you enter, everything is perfect, clean. The construction quality is brilliant. People are working all the time. There's no one staring at a phone and doing stuff on the side." This work ethic translates directly to efficiency and quality.

Western construction firms should take note: without demand standardization and volume, achieving Chinese levels of efficiency will remain challenging.

Small Modular Reactors (SMRs) present a promising solution for Western nuclear deployment

Small Modular Reactors might be the West's answer to its nuclear construction challenges. These standardized, factory-built units address many of the problems plaguing traditional nuclear projects.

SMRs are exactly what they sound like: scaled-down nuclear reactors designed for modular deployment. Unlike conventional plants that are custom-designed and built on-site over many years, SMRs are largely manufactured in factories and then assembled on location in a matter of months.

The economics are compelling. Typical CAPEX per modular reactor is around $100 million, which allows for private financing—a major shift from government-funded megaprojects. Construction time drops dramatically to about three months on-site after delivery from the factory.

One of the most interesting innovations is the use of steel piles instead of concrete. This might sound technical, but it's revolutionary for construction timelines. Concrete work in nuclear facilities is notoriously complex and time-consuming. Steel piles, as Martin explained, are "prefabricated elements that you just transport to the site and then you get the rig and you put it in. You don't need that many wet works."

SMRs also address safety concerns that have plagued nuclear energy since accidents like Chernobyl and Three Mile Island. Their smaller size means the risk of catastrophic failures is reduced, and the standardized design allows for more predictable safety protocols.

For construction tech startups targeting the energy sector, SMRs represent a promising market—one where standardization and repetition could finally enable the productivity gains we've been seeking.

Germany has approved a €1.1 trillion infrastructure and defense spending bill

Germany has made a bold move that could transform its construction landscape for the next decade. Following recent elections and government formation, the country has approved a massive €1.1 trillion spending bill for infrastructure and defense-related construction over 10+ years.

This isn't just another government spending announcement. What makes it remarkable is that it was passed by the outgoing parliament before the new government took office—ensuring the spending is locked in regardless of political shifts. It represents a deep, long-term commitment to rebuilding Germany's aging infrastructure.

The numbers are substantial. Approximately €600 billion will go toward grid upgrades, pipelines, energy infrastructure, rail bridges, highways, tunnels, ports, telecommunications, digital infrastructure, healthcare facilities, and education facilities. Another €450 billion is allocated for defense, including the construction of ammunition and equipment factories, military readiness facilities, and barracks.

The timing is interesting against the backdrop of European economic sentiment. As Martin pointed out, many international investors, particularly from the US, have been claiming "Europe is uninvestable." Yet German stocks have been rallying, especially construction-related companies. Rheinmetall, for example, has seen its stock double over the past year.

For construction tech companies serving the German market, this represents a decade of reliable demand—exactly the kind of demand certainty that enables investment in productivity-enhancing technologies. The newly appointed government secretaries for construction and digitization/debureaucratization are both from business backgrounds rather than politics, raising hopes for innovative approaches.

This German investment wave coincides with a more favorable interest rate environment in Europe compared to the US. While the Federal Reserve has kept rates between 4-5%, European central banks have reduced rates to around 2.65% as inflation has been successfully managed near the 2% target.

For AECS startups looking at European expansion, Germany suddenly looks like a market with exceptional potential.

Construction robotics is gaining traction with practical applications in solar installation

We had a fascinating conversation with James Emerick from Cosmic Robotics about their work in solar automation. His insights highlight how robotics is finally finding practical, ROI-positive applications in construction.

Cosmic Robotics has just raised a $4 million pre-seed round to build their first product, the Cosmic 1A—a robot that installs solar panels on utility-scale solar farms. James brings valuable experience from Built Robotics (autonomous excavators) and Autodesk's robotics research group.

Their approach is refreshingly pragmatic. Rather than building humanoid robots or completely reinventing construction processes, they've focused on a specific, high-value task: lifting and placing 90-pound solar panels onto racking systems. Currently, this job requires 2-3 workers to lift panels overhead, causing repetitive stress injuries and slowing installation.

Their solution acts as a force multiplier, eliminating the need for multiple laborers to perform physically demanding lifts while still allowing humans to handle the more dexterous tasks like fastening and wiring. The business model is equally practical—leasing robots to customers with guaranteed cost savings, then transitioning to lease-to-own arrangements as customers become comfortable with the technology.

What's driving this new wave of construction robotics? James outlined three key principles:

Solving real problems with immediate ROI
Focusing on repeatable, structured, well-defined tasks
Creating drop-in replacements for existing processes

This approach contrasts with many earlier robotics ventures that required completely reimagining workflows. It's working because solar installation combines standardized components, repetitive tasks, and clear economic benefits from automation.

The market timing is excellent. With solar being the fastest-growing energy source and facing labor challenges, automation becomes increasingly valuable. As James noted, "We just cannot deploy solar fast enough. It's the fastest growing new energy to the grid. And obviously electricity demand is exploding."

Patric's observation summed it up well: "When you speak to founders like James, you gain the sense that there's hope for us after all, and there's reasons to be optimistic." The key shift has been away from over-engineered, expensive solutions toward modular, pragmatic designs with bills of materials as low as $25,000.

Optimizing working capital flow represents a major opportunity in construction

We had an eye-opening discussion with Mike Powers from Build Vision about the inefficiencies in construction's financial flow. There's potentially $860 billion in working capital trapped in the global construction industry due to fragmented payment chains.

The problem stems from how money moves in construction. When a developer pays a general contractor, who pays subcontractors, who pay material suppliers and labor agencies, each step creates accounts receivable and accounts payable entries—multiplying the amount of tied-up capital. Each transaction also typically adds markups and fees.

Mike estimates that every level in this chain represents about 50 basis points of interest—with 7-8 steps from capital provider to manufacturer, that's roughly 4% on $13 trillion of global construction activity. The current system also means that material costs balloon dramatically; a piece of equipment that costs $1 million from the manufacturer might cost the owner $1.7 million after all the markups.

Build Vision is pursuing a disruptive approach by trying to connect capital providers directly with manufacturers, bypassing the traditional chain. This isn't just about trimming margins—it's about fundamentally changing how capital flows through the industry.

The challenge is creating enough standardized demand to make this work. As Patric noted, "If I standardize demand and aggregate demand to such a ridiculously large degree that I can give everyone stability, consistency, planability, reliability of pipeline... then all of a sudden people will give me that margin."

We're seeing this already in data centers, where companies like Google and Amazon buy 18 months of manufacturing capacity from equipment providers. But this approach requires immense scale—individual construction companies typically lack the volume to negotiate such arrangements.

For construction tech founders, there's a massive opportunity to create platforms that aggregate demand across multiple projects and companies. The potential prize? Freeing up hundreds of billions in working capital while reducing project costs by eliminating unnecessary middlemen.