China is urging EV makers to keep key technology at home

Chinese authorities have asked local automakers to ensure key electric vehicle technology stays at home even as they expand production capacity around the world.

The government is recommending that automakers produce key car parts domestically and then export so-called knockdown kits to overseas factories where the vehicles will be assembled, Bloomberg reported. reported earlier today, citing unknown sources.

Chinese EV manufacturers really have ambitious expansion plans because the domestic market becomes too small for their production. One of them, Chery, is planning a joint factory in Spain with local Ebro-EV Motors. The market leader is BYD building an electric vehicle factory in Hungary. Xpeng, another electric vehicle maker, also wants to build a factory in Europe.

However, there is a danger of technical know-how leaking out at a time when Chinese carmakers virtually rule the electric vehicle market, while European manufacturers struggle to make their electric cars affordable.

The know-how directive may hurt job prospects in European capitals eager to welcome new Chinese investors. The reason these investors went there in the first place was European protectionist policies meant to help local automakers with their electric vehicles. Earlier this year, the European Commission announced high import tariffs on Chinese-made electric vehicles in an attempt to level the playing field between Chinese and local automakers.

Meanwhile, electric vehicle sales in Europe continue to decline. In August, they fell 33%, despite a 20% global increase in electric vehicle sales, thanks to China. Sales of Chinese electric vehicles hit a record last month, market researcher Rho Motion reported this week quote by Reuters. The figures include both battery electric vehicles and plug-in hybrids.

Electric vehicle sales in China rose 42 percent in August, while sales of electric and hybrid vehicles in the U.S. and Canada rose 8 percent last month.

By Irina Slav for Oilprice.com

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