Chinese car manufacturers have been forced to accelerate plans and build local facilities to localise their supply chain in light of various EV tariffs announced this year, revealed leading EV research-house, Rho Motion, today at their webinar.

This comes as Canada announces a 100% import tariff on Chinese EVs, in line with their trade partner, USA. Rho Motion analysts would expect the brunt of this to be felt by Tesla who need to rearrange their production plan to ensure the supply of US-made vehicles to the North American market.

Yu (Frank) Du, China Research Lead at Rho Motion, said: “Chinese EV manufacturers have certainly had the fire lit under them this year to diversify their geographical supply chain, thanks to sudden increases in tariffs with the latest hike coming from Canada this morning. The result of which sees Chinese manufacturers significantly accelerating their current plans and announcing fresh sites in new territories.”

Meanwhile, Chinese OEMs are already bringing forward plans to build facilities in Europe, Turkey, Thailand, Mexico, Morocco and Brazil. In total, around a dozen new facilities outside of China are planning to open/ramp up in the next few years to deliver local, Chinese branded EVs. Brands such as BYD, SAIC and Chery are among those manufacturers finding new sites to build cars and batteries. Tesla, who also has historically relied on Chinese manufacturing facilities, is equally looking elsewhere for their production lines, focussing in particular on their sites in Berlin and Texas. 

The acceleration is in reaction to recent Chinese EV tariff hikes from Governments in Europe, North America and Turkey attempting to protect domestic markets. Some Governments are also dangling subsidy carrots for Chinese OEMs looking to open new manufacturing plants. Brazil, for example, is offering generous tax incentives, Turkey is proffering almost $10bn to support EV and battery manufacturing there and India is reducing customs duties in return for commitments to localising supply chains. 

The marked exception being China’s presence in the USA which remains minimal. Analysts point to the consumer sentiment towards Chinese brands, the trend in larger vehicle models in the USA and China’s lack of aftercare facilities deterring potential customers.

Rho Motion will be hosting their next in-person event in Columbus, Ohio on the 2nd-3rd October 2024. For more information visit: rhomotion.com/events.

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Notes to Editors

Rho Motion was founded in 2018 by Managing Director Adam Panayi and is now the leading global research house for actionable intelligence into electric vehicle and battery markets, associated technologies including motors and systems, charging and infrastructure, energy stationary storage, battery recycling and the wider energy and renewables markets.

In June 2024 Rho Motion merged with Benchmark Mineral Intelligence, the world’s fastest-growing business at scale for lithium, critical minerals and the energy transition.

Combined, with nearly 250 employees, Benchmark and Rho Motion form the world’s biggest platform for prices, data and market intelligence dedicated to the full breadth of critical mineral and energy transition supply chains.

Find out more about Rho Motion and their upcoming events at: rhomotion.com