Insights from Electrek, Nikkei, and South China Morning Post
The News
Chinese automakers are increasingly expanding their presence in the Global South — including the Middle East, Africa, and Southeast Asia — as they face tougher prospects in American and European markets.
The move to diversify geographically comes as the US and the European Union have imposed tough tariffs on Chinese electric vehicle imports, forcing the companies to adapt.
SIGNALS
Turkey is BYD’s latest point of global expansion
Chinese auto giant BYD on Monday announced plans to build a $1 billion plant in Turkey, a move that analysts said could bolster its standing in Europe. While Turkey isn’t a member of the European Union, it has a customs agreement with the bloc that could benefit BYD as it navigates the EU’s tariffs and its trade tensions with China, which risk spiraling into a trade war. The plant could also serve a burgeoning domestic market in Turkey, with EVs making up 7.5% of new vehicle sales in the country last year, “opening a significant opportunity for the Chinese EV maker,” Electrek wrote. Turkey even eased its tariffs on the vehicles last week to boost global investments.
Southeast Asia EV investments explode
Southeast Asia is home to a growing EV market, and Chinese companies have made major inroads. Last week, BYD opened its first factory in the region, in Thailand. China’s Xpeng Motors and Geely are also pumping billions into the market, where EV sales more than doubled in the first quarter of 2024 compared with last year, according to Counterpoint Research, a technology market research firm. “Southeast Asia’s relatively neutral geopolitical stance provides a window of opportunities for companies from China to expand,” one Hong Kong-based economist said.
Africa a growing market, but challenges remain
Chinese EV makers Neta Auto and Xpeng Motors, meanwhile, are pivoting to Africa as trade tensions escalate with the EU. Neta opened a flagship store in Kenya last month, its first dealership in Africa, while Xpeng announced it is beginning sales of two EV models in Egypt, Nikkei reported. European and Japanese car brands are already well-known in Africa, but they offer mostly gas-powered models, leaving an opening for the Chinese players. Analysts say new-vehicle sales across the continent are expected to pick up as its economies grow, but a lack of widespread charging networks could pose a challenge to EVs’ growth.
Source Agencies
