China overtook Japan last year to become the world’s largest car exporter, according to data from the two countries’ automobile manufacturing associations. However, most of those exports were internal combustion engine vehicles, and electric vehicles (EVs) accounted for only about 25% of exports. In 2022, Japanese automakers produced approximately 17 million vehicles overseas, more than four times the 3.8 million vehicles exported.
Considering the important things, trade barriers China’s EVs face US in europe, if these companies want to pursue Western markets, they may have no choice but to follow Japan’s overseas expansion path. China’s green technology multinationals could have a bigger impact on global expansion than Toyota or Honda before them.
BYD is building factories in Thailand, Brazil, Mexico, and Uzbekistan and hungary. In addition to EVs, Geely and SAIC Motors are aiming to expand their overseas factories.
China accounted for about 60% of global EV sales last year, but Europe and the US together accounted for 35% of the global market, making it too important to ignore. To reduce the risk of European trade barriers, Chinese car companies are setting up factories in Europe. Hungary, Spain, Italy.
In 2022 and 2023, China’s EV-related industry made approximately $60 billion in foreign direct investment. Three-quarters of that amount went to Europe, the Middle East, North Africa, and Asia. Built by CATL and Svolt large factory overseas. While much of the recent investment has been battery-related or upstream, companies are now shifting toward downstream EV manufacturing.
Upstream and midstream investment has been driven by supply and other economic considerations, but access to markets has overcome trade barriers has become an important driver of downstream investment in EV production. Therefore, much of the downstream investment will go to the European Union or to countries that have free trade agreements with the US and EU.
Chinese green technology companies’ position will strengthen as they expand into Asian economies such as South Korea and Thailand As a manufacturing base. Factories in Spain and Italy could help boost those economies.
If China raises prices investing in mexico Creating an export base to the United States and deepening the green technology supply chain in the United States could be a major boost to Mexico’s economic development, if some long-standing institutional constraints can be overcome.
It is in the United States’ best interest to stimulate manufacturing within North America, even if it is not within its own borders. There are limits to how much China alone can transform Mexico’s economy, but China’s contributions could boost Mexico’s economic prosperity in ways the United States cannot.instead of perceiving Chinese investment in Mexico Given the enormous benefits that a stronger Mexican economy would bring, the United States should welcome this as a threat.
First, Mexico’s economic stability could help ease the economy. immigration flow To America. A more prosperous Mexico could expand the U.S. export market. A stronger Mexican economy will also improve the robustness of North American supply chains. The United States and China could have a win-win relationship in Mexico’s green technology ecosystem.
A wide range of countries have free trade agreements with both the EU and the US. These include developed countries such as Canada, Israel, South Korea, and Singapore. Some countries, such as Panama and Jordan, do not have a well-developed industrial base.Middle-income countries that could be a sweet spot for China green technology investment Most are located in Latin America, with the exception of Morocco.
Beyond East Asia, Europe and Mexico, Morocco primary beneficiary Share of China’s outward investment in green technology taking into account trade agreements with both the EU and the US. China’s green internationalization has the most transformative potential in small middle-income economies like Morocco, neither in technology powerhouses like Israel nor large economies like Mexico.
Morocco also has great potential in solar and wind energy. To reap the maximum benefits from foreign investment, Morocco needs to increase its participation in green technology value chains. Equally important, recipients of foreign investments should take advantage of these opportunities to upgrade their human capital.
As China green tech multinational When expanding beyond Asia to regions as diverse as Europe and North Africa, lessons can be learned not only from Asian pioneers such as Sony and Samsung, but also from domestic peers such as Midea and Huawei. . They must adapt to local conditions, sometimes through strategic partnerships. They need to develop robust and resilient supply networks.
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“Overtaking on curves”: How China’s EV industry charges to dominate the global market
“Overtaking on curves”: How China’s EV industry charges to dominate the global market
They must navigate a complex geopolitical situation. Most importantly, and perhaps most difficult, we must move beyond our Chinese roots to become a truly global company with a global talent pipeline. Beyond the core strengths of innovation and process management, success will depend on the ability to develop cross-cultural competencies for global talent management.
This change goes beyond just corporate growth, as the rise of China’s green technology giants reshapes the world’s production landscape. It portends a wave of change across the industrial ecosystem of the Global South.
As these Chinese multinationals expand their international presence, they have the potential to reshape the world’s production networks towards the Global South and accelerate the transition to a green economy. For global market stakeholders, embracing this change through cooperation and coordination with Chinese green technology companies will maximize global benefits in this change. By working together to strengthen sustainable supply chains, we can harness the power of China’s green technology to build a more sustainable future for everyone.
Mr. Winston Mok, an individual investor, was previously a private equity investor.