China is taking significant steps to ensure its electric vehicle (EV) industry retains its competitive edge. In a recent move, the Chinese government has instructed its automakers to keep advanced EV technologies within the country.
This directive comes as manufacturers such as BYD Co. and Chery Automobile Co. expand their global footprint by establishing production facilities in various international markets, including Spain, Thailand, and Hungary.
The Knock-Down Kit Approach
To support overseas expansion while safeguarding domestic technology, China is promoting the export of knock-down kits. These kits consist of vehicle parts manufactured within China, which are then shipped abroad for final assembly in destination markets. By employing this strategy, Chinese automakers can benefit from international production while keeping core technology development within the country. This move also helps them bypass punitive tariffs imposed on Chinese exports in certain markets.
No Investments in India: Regulatory Risks
China’s Ministry of Commerce has also advised automakers to refrain from making any auto-related investments in India. This is part of Beijing’s broader strategy to shield the country’s EV sector from regulatory risks and maintain control over its know-how. By avoiding investments in India, China aims to mitigate the risk of technology leakage, ensuring its EV advancements remain a domestic asset.
Special Conditions for Turkey Investments
Another notable directive involves Turkey. Automakers looking to establish operations in Turkey are required to first inform China’s Ministry of Industry and Information Technology and the Chinese embassy in Turkey. This precondition underscores China’s desire to closely monitor any overseas investments, especially in strategically important markets.
Conclusion: Global Expansion, Domestic Protection
As Chinese automakers gain traction in international markets, China is taking calculated steps to maintain control over its advanced EV technology. The export of knock-down kits and restrictions on investments in certain countries highlight Beijing’s commitment to safeguarding its technological innovations while facilitating global growth for its automakers.
