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International News From the Field: China

This week’s submission focuses entirely on new energy vehicles (NEVs), notably EVs, and the remarkable growth, investments, and projections for this vertical industry in China. In November 2020, China produced 198,000 units of NEVs, the highest in...
Jan 18, 2021

January 18, 2021

This week’s submission focuses entirely on new energy vehicles (NEVs), notably EVs, and the remarkable growth, investments, and projections for this vertical industry in China. In November 2020, China produced 198,000 units of NEVs, the highest in history and an increase of 75% year-over-year. According to China’s most recent Automotive Industry Plan, NEV production should account for 20% of total vehicle production by 2025. This translates into 6 million units of NEVs a year by 2025, up from the current 1.2 million units annually, a 40% compound annual growth rate over the next five years. In light of this, major international brands are making huge investments in China’s NEV production, resulting in significant manufacturing technology opportunities. A few specifics:

  • Volkswagen, together with their three JV partners (FAW, SAIC, and JAC), plans to invest $18 billion in China over the next five years to develop and build NEVs. By 2035, NEVs will account for 35% of total vehicles produced by Volkswagen China.

  • BMW plans to invest $620 million this year for the construction of a new factory in Shenyang, China for NEV production. The factory will be completed in 2022.

  • General Motors’ Chinese joint venture will invest $4.3 billion in electric vehicles over the next five years in China. More than 40% of GM's new models in China in the next five years will be electric.

  • Toyota-Guangzhou announced an expansion plan with a total investment of $1.6 billion for NEV production in the city of Guangzhou. The planned annual production capacity will be 400,000 units. The project is scheduled for completion by the end of 2022.

  • Tianjin FAW Toyota Motor Co. Ltd. announced that they are going to build a new factory in Tianjin with a total investment of $1.2 billion for NEV production. The annual production capacity will be 200,000 units. The factory will be completed in 2025.

  • Toyota and BYD, a leading Chinese NEV manufacturer, formed a 50-50 joint venture in Shenzhen, China to jointly develop car batteries and EVs.

  • Contemporary Amperex Technology Co. Ltd., one of the “big three” automobile battery manufacturers in the world, is investing $5.9 billion to build three battery factories to further expand its operations in China. Of this, $2.57 billion will be used to build a lithium-ion battery plant in the province of Fujian, $1.81 billion to set up a factory in the province of Jiangsu, and the remaining $1.52 billion to expand the existing power battery plant in the province of Sichuan.

For more information on these exciting opportunities and others, contact Fred Qian at fredqian@AMTchina.org.

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Author
Fred Qian
General Manager - Shanghai Technology and Service Center of AMT
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