Chinese authorities have asked local carmaking companies to make sure key electric vehicle technology stays home even as they expand their manufacturing capacity across the world.
The government is recommending carmakers to produce the key parts of the cars domestically and then export the so-called knock-down kits to the factories abroad where the vehicles would be assembled, Bloomberg reported earlier today, citing unnamed sources in the know.
Chinese EV makers do indeed have ambitious expansion plans as the domestic market becomes too small for their output. One of them, Chery, plans a joint factory in Spain with local Ebro-EV Motors. Market leader BYD is building an EV plant in Hungary. Xpeng, another EV maker, also wants to build a factory in Europe.
With that, however, comes the danger of technical know-how leaking out at a time when Chinese carmakers basically rule the EV market while European manufacturers struggle to make their electric cars affordable.
The know-down kit directive may affect employment hopes in European capitals that look forward to welcoming their new Chinese investors. The reason for those investors going there in the first place was European protectionist policies aimed at helping local carmakers with their EVs. The European Commission earlier this year announced hefty import tariffs on China-made EVs in an attempt to level the playing field between Chinese and local carmakers.
EV sales in Europe, meanwhile continue to fall. In August, these were down by 33% despite a global increase in EV sales of 20%, thanks to China. Chinese EV sales reached a record last month, market researcher Rho Motion reported this week, as cited by Reuters. The numbers include both battery electric vehicles and plug-in hybrids.
Chinese EV sales rose by an impressive 42% in August, while sales of EVs and hybrids in the U.S. and Canada rose by a much more modest 8% last month.
By Irina Slav for Oilprice.com
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