China's EV industry is shifting its focus to other markets like Brazil, amid economic challenges and tariff threats from US
China's EV industry continues to remain in murky waters as the dragon nation faces an economic slowdown and a high-tariff threat from the US. Meanwhile, in the European Union as well, high provisional duties are expected to be imposed on China's EV market.
The country is now focusing on those markets "where they’re welcomed." According to a report by Bloomberg, one of such markets is Brazil. Already having an upper hand over EV sales in the world’s sixth-largest auto market, BYD and Great Wall Motor are now building factories there too. This will allow them to sell cars tariff-free across Latin America.
This might serve as a model for other industries and regions, as per the report. China's leading manufacturers have caused global concern as their inexpensive exports jeopardize the livelihoods of local businesses and workers across nations. To expand their global consumer base, Chinese companies are pushing themselves to invest in, produce, and hire within overseas markets rather than merely exporting goods there.
This strategy is precisely what the auto firms are implementing in Brazil. BYD plans to commence its production plans by mid-2025 at a new factory, which is set to be its first outside of Asia.
China's emerging industrial giants are already facing barriers to entry in the US, as Biden has reportedly pledged to impose heavy tariffs on the exports from Beijing. In Western Europe, the story is not different, as these giants are greeted with suspicion.
However, in a turn of events, France's prime minister reportedly expressed his openness to Chinese firms.
There is no denying the fact that China's EV makers are facing progress in some places. A recent study revealed that Chinese direct investment in Southeast Asia nearly quadrupled last year. In the auto industry, BYD is undertaking a big project in Hungary, while Chery Automobile announced production plans in Thailand last month.
According to the Rhodium Group think tank, Chinese foreign investment in the EV value chain reached a record high of nearly $30 billion in 2023.