New Energy Vehicles

China Vows to Help EV Makers Expand Overseas, Fight Sanctions

 

China is implementing a range of new measures to support its electric vehicle-makers in their push for overseas markets, along with a promise to help them tackle trade-related sanctions.

The measures — posted by China’s Ministry of Commerce on Wednesday — range from boosting overseas yuan settlements to easing export processes, through a joint effort from nine Chinese departments and institutions.

In its document, the Commerce ministry laid out 18 guidelines for various departments and the country’s central bank to help the new energy vehicle (NEV) trade.

 

Also on AF: China’s Cheap Solar Panels Killing Europe’s Solar Manufacturers

 

They included encouraging automakers to establish R&D centres abroad and coordinate with overseas researchers in order to “efficiently use global innovation resources.”

The ministry also called for partnerships between Chinese automakers and foreign firms to strengthen overseas supply chains for vehicles and batteries.

It further directed the transport and customs departments to help EV makers increase their shipping fleets, to improve export logistics by reducing processing times and ensuring transportation safety, among other measures.

The guidelines also called for boosting credit mechanisms for NEV firms, including by facilitating cross-border yuan settlements and increasing export credit insurance issuances.

 

Fighting sanctions

A major portion of the guidelines, meanwhile, were focused on tackling the risk of foreign trade restrictions targeting Chinese automakers.

The European Union — which has emerged as a major market for Chinese electric vehicle giants such as BYD and Nio — is already probing how Beijing’s subsidies are supporting its carmakers. European leaders and carmakers have been consistently sounding the alarm on a flood of cheap Chinese EVs entering the market.

Meanwhile, the US is considering hiking tariffs on Chinese EVs and other goods. US Commerce Secretary Gina Raimondo deemed Chinese EVs a national security threat earlier this month, sounding an alarm over the data that their chips and sensors collect.

Beijing’s commerce ministry, in its document, called on industry organisations to help carmakers “actively respond to foreign trade restrictive measures.”

It also directed various ministries to “establish a good image of Chinese brands”.

Various ministries were also tasked with the responsibility of helping automakers manage their carbon footprint — an issue fast becoming a headache for Chinese EV makers.

Last year, France cut-off Chinese cars from its EV tax credit programme, citing high emissions from their production at coal-powered factories.

The ministry also called for greater Chinese participation in the formulation of international standards in NEV and auto batteries, while directing multiple ministries to make use of mechanisms like the WTO “to create an open, transparent and predictable international trade environment for China’s NEVs, batteries and other products.”

 

 

China’s EV slowdown

The commerce ministry’s pledge of support comes amid a slowdown in China’s electric vehicle sector, thanks to an economic slump and a price war started by US EV-maker Tesla early last year.

China’s new energy vehicle sales in January fell 38.8% compared to December, Reuters reported on Tuesday. Vehicle sales, including those exported, were up by close to 48% from a year earlier but down 22.7% from December.

Amid the slowdown at home, overseas markets have emerged as a key avenue for Chinese carmakers.

Early this month, China said it had overtaken Japan as the world’s largest auto exporter in 2023, shipping 3.83 million vehicles overseas.

China’s BYD also toppled Tesla as the world’s biggest EV-seller in the last quarter of 2023. While that feat came on the back of huge sales at home, BYD’s push overseas, including in Thailand, Europe and Australia also helped the carmaker dethrone Tesla.

BYD overtook Tesla as Australia’s biggest EV-seller for the first in the last three months of 2023, Drive reported this month.

 

  • Vishakha Saxena

 

Also read:

 

Europe Assessing Tariffs on Chinese EVs Amid Subsidy Concerns

 

US Rules to Limit Chinese Access to EV Tax Credits Announced

 

China’s BYD Plans EV Production Base in Hungary

 

Chinese Car Exports to EU Seen Hit by Red Sea Ship Attacks

 

Carmakers Focus on Cost-Cutting to Rival Cheap Chinese EVs

 

Chinese EV ‘Invasion’ Forces Western Rivals to Slash Costs

 

China EV-Makers Start Steady in Europe Amid Cost, Trust Issues

 

 

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at vishakha.saxena@asiafinancial.com

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