China wants to keep EV know-how in the country

The Chinese government has asked Chinese EV makers to keep production in foreign countries to a minimum and technological know-how in the home market. It also discouraged companies from investing in India and Turkey.

According to Bloomberg, Chinese EV makers are supposed to opt for knock-down kits when building EVs outside of China, for example in Europe, as they try to circumvent special tariffs. With knock-down kits, the key parts are still manufactured in China, and the vehicles would only be assembled abroad.

Even more striking is the government’s wish that Chinese automakers should not invest in India. If they are looking to set up shop in Turkey, they should inform the Ministry of Industry and Information Technology and the Chinese embassy in Turkey prior to making the investment. According to Bloomberg, China’s Ministry of Commerce met with some dozen automakers in July. The article is based on insider information, and there has been no official comment so far.

This comes as there have been repeated news about Chinese carmakers investing in factories abroad. For example, BYD confirmed that it will start producing electric vehicles in Turkey from 2026, and Turkish President Recep Tayyip Erdogan promised billions of dollars in investments for EV and battery production.

SAIC brand MG Motors is also looking to build cars outside of China. According to recent reports, the carmaker is looking to build a factory in the north of Spain. However, Hungary and the Czech Republic are apparently also still in the running. The company is also considering making cars for the European market in Thailand. However, in that case, 40 per cent of materials used would have to come from Thailand for a vehicle to be considered Thai (and not Chinese) – something other countries could enforce as well to ensure that there is economic value in the factories of Chinese carmakers, rather than them just being assembly plants.

These are just some examples. It is not clear what the government’s stance is on partnerships between Chinese and non-Chinese carmakers. Many have set up joint ventures, such as Audi and SAIC, to cater to the Chinese market. However, with partnerships like the one between Volkswagen and Xpeng or Stellantis and Leapmotor, EV technology and know-how would definitely not stay in China.

bnnbloomberg.ca