China’s plan to dominate electric vehicle sales around the world

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The resurrection of a car plant in Brazil’s poor northeast is a symbol of China’s global advance and the West’s retreat.

BYD, the Shenzhen-based conglomerate, has taken over a former Ford factory in Camaçari, which was abandoned by the American automaker nearly a century after Henry Ford established its first operations in Brazil.

When Luiz Inácio Lula da Silva, president of Brazil, visited China last year, he met the billionaire founder and chairman of BYD, Wang Chuanfu. After that meeting, BYD chose the country as its first car manufacturing center outside Asia.

Under a more than $1 billion investment plan, BYD intends to start producing electric and hybrid cars this year at the site in Bahia state, which will also make bus and truck chassis and process materials for batteries.

Brazil’s new plant is not an outlier: It falls on a wave of Chinese corporate investments in electric vehicle manufacturing supply chains in the world’s major developing economies.

Financial times

The unintended result of growing protectionism in the United States and Europe could be to drive many emerging markets into the hands of China.

Last month, Joe Biden launched a new broadside against Beijing’s deep financial support for Chinese industry by unveiling sweeping new tariffs on a range of cleantech products, most notably a 100 percent tariff on electric vehicles. “It’s not competition. It’s cheating. And we have seen the damage here in the United States,” Biden said.

The moves were aimed in part to boost Biden’s chances in his presidential battle with Donald Trump. But the tariffs, along with increasing restrictions on Chinese investment on American soil, will have an immense impact on the global auto market, effectively locking major Chinese electric vehicle makers out of the world’s largest economy.

The EU’s own anti-subsidy investigation into Chinese electric cars is expected to conclude next week as Brussels tries to protect European carmakers by curbing the flow of low-cost Chinese electric vehicles into the bloc.

Government officials, executives and experts say the series of new cleantech tariffs issued by Washington and Brussels are forcing China’s major players to turn their attention to markets in the rest of the world.

They argue that this will lead to Chinese dominance in the world’s most important emerging markets, including Southeast Asia, Latin America and the Middle East, and the rest of the Western economies that are less protectionist than the United States and Europe.

“Is that the part that seems to get lost in this whole ‘can we raise some tariffs and slow down Chinese advance’ discussion? That’s just defending your country. That leaves everything else open,” says Bill Russo, former head of Chrysler in Asia and founder of Automobility, a Shanghai consultancy.

“Those markets are up for grabs and China is aggressively attacking those markets.”

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