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Source: Global Times

[Global Times special correspondent in Germany Qingmu Global Times special correspondent Ren Zhong] For Chinese new energy vehicle companies and related suppliers, their goal is the global market. From Southeast Asia, which is close to China, to the distant European continent, Chinese companies are working hard to take root.

Hong Kong's South China Morning Post reported on July 30 that Southeast Asia is closely linked to the Chinese economy, and the current increase in tariffs has affected the prospects of Chinese new energy vehicle companies in Western markets, which has stimulated the interest of Chinese automakers in the region. Southeast Asia will achieve rapid electrification, and more than half of its energy consumption will come from electricity by 2050. This shift will drive a significant increase in electric vehicle sales, reaching about 8.5 million by 2035. This booming market provides an attractive opportunity for Chinese electric vehicle manufacturers. Chinese brands have seen a significant increase in the region's electric vehicle market share, from 38% in 2022 to more than 70% last year. This growth is inseparable from Chinese companies' investment in electric vehicle manufacturing and upstream supply chains.

In 2022, CATL announced that it would jointly develop a power battery industry chain project with two Indonesian state-owned enterprises with a total investment of US$6 billion to develop an end-to-end lithium-ion battery supply chain covering mining, material processing, battery manufacturing and recycling. Zhongwei New Materials Co., Ltd. produces nickel and other battery raw materials in Indonesia. Chinese battery material manufacturers such as Zhejiang Huayou Cobalt and Ningbo Liqin are also looking to Indonesia. In Malaysia and Thailand, companies such as Guoxuan High-tech and Yiwei Lithium Energy are investing heavily in battery manufacturing. China's huge investment in battery manufacturing and upstream supply chains provides great potential for economic growth and job creation in Southeast Asia.

"Chinese manufacturers are setting up factories in Europe to produce electric vehicles to avoid EU tariffs," the German World Financial Markets website reported a few days ago. The German Federal Foreign Trade and Investment Agency released information in July that leading Chinese automakers such as BYD, Geely, SAIC, and NIO are expanding their sales and production networks around the world.

BYD LOGO in Budapest, Hungary, May 27, 2024, local time. (Visual China)

In addition to vehicle manufacturers, Chinese auto suppliers are also going overseas, especially power battery companies. Currently, many power battery manufacturers have invested in different regions in Europe. In addition to the existing production facilities in Thuringia, Germany, CATL has invested more than 7 billion euros to build a factory in Hungary. In addition, Honeycomb Energy, Envision Power, Guoxuan High-tech, and EVE Energy are also deployed in Europe.

Analysts believe that many Chinese companies are investing in southern and eastern Europe because energy prices are cheap and workers' wages are relatively low in these places. Local governments also hope to use Chinese investment to make their country an electric vehicle production base. Chinese manufacturers are building a complete electric vehicle supply chain by cooperating with European companies. At the same time, they have also become important participants in Europe's green transformation.