finance
Chinese EV Makers Acquire Idle Western Plants for Overseas Production
Chinese electric vehicle companies are purchasing unused factory space from Western automakers that are reducing gasoline-car output. The moves allow Chinese firms to build vehicles locally and avoid tariffs.
May 22, 5:45 AM·1m read1 source
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Chinese electric vehicle manufacturers are acquiring idle factory space from Western automakers that are cutting gasoline-car production, according to Nikkei. Stellantis has opened plants in France and Spain to partnerships with Dongfeng and Leapmotor. Geely plans to restart an idle production line at a Ford Motor Company factory in Spain.
UBS analysts forecast Chinese brands could reach 35 percent of the global auto market by 2030, up from 25 percent this year. The report cited China's low-cost battery supply chain as a factor.
Building vehicles locally helps Chinese companies avoid tariffs and meet government requirements for domestic production, Nikkei reported. BNP Paribas analyst James Kan said the approach lets local economies benefit, easing political acceptance. Europe remains a focus.
Leapmotor stated it will source many components within Europe for production at Stellantis facilities. The company also plans manufacturing in Brazil ahead of higher tariffs on imported EVs this summer.
Citigroup analyst Harald Hendrikse noted that Chinese firms may encounter higher labor costs, regulations, and local sourcing rules in Europe. BYD faced controversy over alleged labor conditions at a former Ford plant in Brazil but continues to explore sites in Latin America and Europe.
Volkswagen plans to reduce global production capacity by millions of vehicles this decade. CEO Oliver Blume said the company has excess capacity in Europe but has no current plans to partner with Chinese manufacturers.
