Thu Sep 12 03:50:29 UTC 2024: ## China Urges Carmakers to Keep EV Tech at Home Despite Global Expansion
**BEIJING** – In a move that could complicate Chinese carmakers’ efforts to expand globally, the Chinese government has advised its auto manufacturers to prioritize keeping advanced electric vehicle (EV) technology within the country.
According to sources familiar with the matter, the Ministry of Commerce (MOFCOM) held a meeting with major Chinese automakers in July, urging them to export “knock-down kits” for their vehicles. This means key components will be produced domestically and shipped to foreign plants for final assembly.
This directive comes as Chinese EV companies like BYD and Chery are building factories in countries such as Spain, Thailand, and Hungary to avoid tariffs on Chinese-made EVs and tap into new markets. However, MOFCOM’s guidelines could hinder their globalization plans, as they aim to offset sluggish domestic sales and fierce competition.
The government’s concern centers around safeguarding China’s EV industry know-how and mitigating regulatory risks. Carmakers seeking to invest in Turkey have been told to notify the Ministry of Industry and Information Technology and the local Chinese embassy first. Notably, China has also advised against investment in India, citing elevated tensions between the two countries.
MOFCOM’s stance could also impact European nations, as several are courting Chinese carmakers to bring jobs and economic benefits. For example, BYD is planning a factory in Turkey with an annual capacity of 150,000 cars and 5,000 employees.
The European Union, which has seen several Chinese companies establish plants to avoid import duties, has expressed concern regarding “rules-of-origin” requirements, which dictate a minimum level of value creation within the EU.
While some Chinese carmakers have stated their intention to increase the share of locally sourced components in countries like Brazil, China’s directive underscores its focus on keeping core technology domestic, even as its companies expand internationally.
Chinese EV stocks reacted to the news, with SAIC Motor falling over 1% in Shanghai, while Geely Automobile Holdings Ltd. and BYD saw slight declines in Hong Kong.
First Piper 