China tells local carmakers to keep advanced EV tech restricted to home market
- Chinese government has urged local players to take the route of manufacturing key components and exporting these for assembly at the intended market.
The Chinese government has asked local manufacturers of electric vehicles (EVs) to ensure that some of the more advanced features on these mobility options are restricted to the home market and for local Chinese customers only The intimation comes at a time when a number of Chinese EV brands are constructing manufacturing facilities across the world to give wings to their global ambitions as well as bypass higher tariffs on China-made EVs in many parts of the world.
According to Bloomberg, the country's Ministry of Commerce held a meeting with representatives of various Chinese automobile manufacturers in July and in this meeting, it was communicated that instead of entirely manufacturing their vehicles on foreign soil, they should instead look at exploring the CKD route. CKD or Completely Knocked Down refers to a process under which major vehicle parts are manufactured in one country and then exported to another where these are assembled.
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The move, however, could throw a spanner in the plans of Chinese manufacturers who have been looking at establishing and increasing their global prowess by setting up manufacturing facilities in key regions of the world. BYD, for instance, is a leading player in the world of EVs and recently entered into an agreement with the Turkish government for an investment of $1 billion on a manufacturing facility. The company already has production facilities in countries like Brazil and Thailand, among others.
March of Chinese EVs
China is the world's largest manufacturer of EVs and units made here are exported to almost all corners of the world. Even Tesla, the biggest EV player in the world, has a manufacturing base in Shanghai from where it exports Model 3 and Model S units to select European countries.
But in recent times, Chinese EV manufacturers have been accused of benefiting from government incentives at home which enable them to offer their products at much lower cost in international markets. As such, European Union increased the tariff on EVs that are manufactured in China and then exported to the continent. The United States has also taken out similar measures, measures China calls 'unfair.'
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