Chinese companies gain momentum in U.S. electric vehicle supply chain
Chinese manufacturers and tech companies are playing an increasing role as the U.S. supply chain for electric vehicles and batteries grows to satisfy demand.
Why it matters: More supply chain investments mean more EVs, which advocates say are critical to making transportation sustainable.
- But domestic manufacturing proponents and some Republican lawmakers have expressed wariness about Chinese companies seizing too much control of a vital and growing market.
State of play: Chinese companies are expanding their presence in several areas of the U.S. EV space:
- Ford on Monday announced it's building a $3.5 billion plant in Michigan that will build batteries using technology from China's Contemporary Amperex Technology Co., Limited (CATL).
- Foxconn, which makes the iPhone in China for Apple, is now building electric pickups in Ohio after forming a joint venture last year with Lordstown Motors.
- China EV maker BYD is considering building a battery plant in the U.S., Bloomberg reported.
The intrigue: Virginia Gov. Glenn Youngkin, a Republican, last month withdrew his state's bid for Ford’s venture with CATL, describing the planned project as a "Trojan horse" for the Communist Party of China, Axios' Joann Muller writes.
- Michigan Gov. Gretchen Whitmer, a Democrat, applauded the "generational investment by an American icon [that] will uplift local families, small businesses, and the entire community and help our state continue leading the future of mobility and electrification."
Be smart: For vehicles to qualify for EV tax credits under the Inflation Reduction Act (IRA), they need to be assembled with components made in the U.S. — a stiff standard that many vehicles can't currently meet.
- Because Ford will own 100% of the new Michigan factory, it hopes to take advantage of lucrative tax credits.
- "As IRA implementation continues, scrutiny of Chinese involvement in facilities receiving subsidies will only increase, driven by a mix of sincere and cynical China concerns from both parties," Evercore ISI analyst Tobin Marcus writes.
What we're watching: Whether a Chinese automaker goes beyond manufacturing in the U.S., becoming the first to sell vehicles here.
- Chinese automotive executives have been claiming for years that they'll bring their cars to the U.S., but it hasn't happened yet.