Chinese Ambassador Qin Gang had a message for the US about the plan to establish one in the country EV supply chain:”Do not. ” Okaytherefore, the Chinese envoy’s message was more diplomatic and detailed, but it was essentially a warning to US against cutting China out EV supply chain completely.
Because if the US goes ahead with its plan, it will harm the interests of both countries, like Bloomberg report. China claims these interests are “inextricably linked” and that upsetting the established order of global supply chains will damage both the US and Chinese economies.
In an interview at this year Detroit Auto Show – also known as the North American International Auto Show – the ambassador went on to say:
Breaking up with China means separating from the world’s largest market as well as the biggest opportunity, […] The industry chain has been relatively well established over the years and there will be no winners if someone wants to interfere or even destroy [that.]
The electric vehicle value chain, or specifically the supply chain, is highly globalized.
Ah, here it is. I haven’t heard the term “globalization” for a moment. Usually, it’s in the context of corporations moving production to East Asia, Southeast Asia or Latin America to cut costs and make more money. Now, globalization being invoked by diplomats.
Ambassador Qin Gang is not wrong to say that the electric vehicle supply chain – among others – has been globalized. But no one disputes that view. If anything, America agrees.
That is the basis of Inflation Reduction Act as it applies to electric vehicles: American companies’ electric cars depend on globalized production and supply, and the US wants that to become localized production and supply.
The Chinese ambassador said that cutting off China would cause the US to withdraw from the Chinese car market and vice versa. American car manufacturers such as GM, Ford and Tesla could lose access to the world’s largest auto market. That’s not a bad point. Especially now big SUV is becoming popular in China and now more and more cars are made in China exported to other markets.
The ambassador cited General Motors as an example, saying that GM’s latest models are “designed, developed and manufactured” for sale in China. In fact, the joint venture GM-SAIC-Wuling works quite well thanks to Wuling Mini EV.
Clear, Chinese and other foreign electric vehicle manufacturers would be imposed by strict domestic rules and bypass the US market. But the Chinese automakers did this: Bloomberg reported that there wasn’t a single Chinese company at the Detroit auto show.
Compare that to the upcoming Paris Auto Showthat Chinese car manufacturers BYD and Great Wall Motor plans to attend, and it doesn’t seem like China is really interested in selling electric cars in the US; it is primarily concerned with playing a lucrative role in providing majority of the total number of electric vehicles sold in the United States or elsewhere.