Brazil’s Louise Inacio Lula da Silva and China’s Great Wall Motor (GWM) CEO Mu Feng will be attending the opening of GWM Automobile Factory in Sao Paulo, Brazil on August 15th, 2025.
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BEIJING – Chinese electric car companies are increasing investment in overseas factories to enhance competition with Tesla and other global automakers.
For the first time since records date back to 2014, China’s electric vehicle supply chain invested more abroad than at home last year, according to a US consulting firm Rhodium Group report issued Monday.
The majority of the announced foreign investment (74%) was in battery plants, the report said. However, he pointed out that investments in overseas assembly plants are also “growing rapidly.”
The spending plan is as Chinese automakers face fierce competition at home and increased tariffs at export. Increased overseas investment will help Chinese companies gain foreign government support for market expansion.
“The growing regulatory pushback in host markets like the EU is raising barriers to entry and urges more Chinese companies to establish local manufacturing operations,” said Rhodium Report.
According to data from Rhodium, domestic investment in the manufacturing industry of China’s electric vehicle industry has fallen sharply from $41 billion in 2023 in 2023 to $15 billion in 2024.
Foreign investment remained much lower, but for the first time in 2024 it “slightly surpassed” domestic levels, the report said without sharing accurate figures.
Other deals in the pipeline
According to another rhodium survey released in late July, automobiles were the second most active sector for China’s outbound investment in the second quarter of this year. Materials and metal sectors were ranked first.
“Eight transactions have exceeded $100 million, recording higher than usual activity by EV parts manufacturers,” the July report said. “The largest of them, led by Chinese battery materials manufacturer Gem, has committed $293 million to expand Indonesia’s three-component precursor facility.”
Several overseas factory projects announced in recent years have also begun operations.
Wall Wall Motor announced over the weekend that it opened its first factory in Brazil on Friday local time. The company is also reportedly considering another plant in the area and will make a decision mid-next year. The Chinese automaker did not immediately respond to CNBC requests for comments.
BYD also began production at its first Brazilian factory in July despite being fined at the beginning of the year over labor practices. According to CNBC calculations of publicly disclosed data, the Chinese electric vehicle giant has sold over 545,000 cars overseas as of July this year, with more than 417,000 cars in 2024 overall.
Earlier this summer, Chinese battery supplier Envision announced in June that it had officially started production at its first factory in France.
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However, these overseas investments constitute only completed projects.
Just 25% of overseas manufacturing plans announced by China’s electric and vehicle industry have been completed, far below the rate of 45% for people at home, Rhodium said in a report Monday that overseas projects are twice as likely to be cancelled.
“Chinese companies will also need to manage Beijing’s growing concern over technology leaks, unemployment and industry cries, which could make it more difficult to manage outbound investments in the strategic sector,” the report said.
—CNBC’s Victoria Yo contributed to this report.
