China tells its EV companies not let legacy auto learn its technology
Summary
TLDRThis video discusses China's stance on its electric vehicle (EV) manufacturers expanding production overseas. The Chinese government is urging automakers to avoid sharing advanced EV technology with other countries by setting up knockdown kit assembly plants abroad, instead of full-scale factories. China is concerned about maintaining its technological lead and preventing rivals from catching up. The speaker, Sam Evans, shares his own experience with Chinese EV technology and highlights how Chinese manufacturers are disrupting global markets like Thailand, while also noting tensions between Chinese policies and companies' global expansion ambitions.
Takeaways
- 🚗 China is cautioning its manufacturers against building too many factories abroad to protect its advanced EV technology.
- ⚡ Chinese EV technology, including fast charging and 800-volt platforms, is leading the world in innovation.
- 🛠️ The Chinese government prefers that manufacturers build assembly plants abroad rather than full-fledged factories to safeguard key technological components.
- 🌍 China’s automakers are expanding globally, with factories planned or being built in countries like Mexico, Turkey, Spain, Brazil, and Thailand.
- 🔧 China's strategy involves sending knockdown kits (CKD and SKD) to be assembled in other countries, rather than manufacturing everything abroad.
- 🚫 China is discouraging automakers from investing in India due to concerns over losing control of their technology and previous incidents of factory seizures.
- 💡 Chinese automakers like Great Wall Motor are already using the CKD strategy in international markets, as seen in their partnership in Malaysia.
- 📉 China's domestic EV market is becoming more competitive, pushing manufacturers to seek global expansion.
- 💼 The Chinese government is wary of foreign governments' incentives, fearing they might trick manufacturers into compromising their technology.
- 🚀 Chinese EV makers have disrupted markets like Thailand, where they’ve established a strong presence and challenged existing players like Toyota.
Q & A
Why is the Chinese government advising automakers to avoid sharing advanced EV technology abroad?
-The Chinese government believes that its EV technology is more advanced than the rest of the world and wants to prevent foreign rivals from catching up by ensuring that key components and technology remain within China.
What specific strategy is China recommending for its automakers building factories abroad?
-China is advising automakers to build factories overseas that function more like assembly plants, using knockdown kits where key components are produced in China and then shipped for final assembly abroad. This ensures that the core technology stays within China.
What is the difference between completely knocked down (CKD) and semi knocked down (SKD) kits in manufacturing?
-Completely knocked down (CKD) kits involve shipping fully disassembled car parts for assembly in the destination country, while semi knocked down (SKD) kits include some pre-assembled components, simplifying the final assembly process.
Why are Chinese automakers building factories outside of China?
-Chinese automakers are building factories abroad primarily to avoid tariffs imposed on Chinese-made cars in many foreign markets, such as Europe. By assembling cars locally, they can bypass some trade barriers.
What concerns does China have regarding automakers investing in India?
-China has warned automakers against making investments in India due to past instances where the Indian government has seized factories from foreign companies. This creates a risk that China does not want its automakers to face.
What is China's Ministry of Commerce's role in automakers' foreign investments?
-China's Ministry of Commerce has instructed automakers to notify them before making any foreign investments, especially in countries like Turkey, to ensure alignment with China’s broader economic and technological interests.
How has the Chinese government’s stance affected automakers like BYD (Build Your Dreams) that have already invested in India?
-While the Chinese government has discouraged investment in India, companies like BYD have already built factories there. Despite this, BYD may not receive the same level of government incentives as other automakers for their India ventures.
What impact have Chinese automakers had in markets like Thailand?
-Chinese automakers have significantly disrupted the Thai automotive market, which was traditionally dominated by brands like Toyota. Chinese EV manufacturers have built factories in Thailand, targeting local consumers and reshaping the market landscape.
How does the Chinese government’s strategy impact automakers' globalization efforts?
-The strategy of keeping key production within China and limiting the scope of foreign factories to assembly lines could hinder Chinese automakers' ability to fully globalize, as it limits their technological integration in foreign markets.
Why does the Chinese government believe that foreign governments could trick their automakers into investing abroad?
-China is cautious that some foreign governments, particularly India, may use policies like tariffs or factory seizures to trick automakers into investments that would ultimately disadvantage Chinese companies. This belief is based on historical instances of foreign government intervention in industrial operations.
Outlines
🔧 China’s EV Manufacturers Told to Limit Tech Sharing Overseas
China's government is advising its manufacturers, especially in the electric vehicle (EV) sector, to avoid sharing their advanced technology with other countries. While Chinese companies like BYD and Xpeng are building factories worldwide in places such as Mexico, Europe, and Thailand, China fears that this will expose its technological edge to rivals. The government is urging manufacturers to retain key innovations domestically, including the use of cutting-edge tech like 800-volt platforms and Giga casting. Despite joint ventures with major global automakers, China is becoming more protective of its EV advancements.
🚗 BYD and Other Chinese Automakers Face Restrictions in India and Turkey
Chinese automakers, including BYD, are expanding operations internationally, such as building factories in India, but are encountering opposition from the Chinese government. China has restricted automakers from making investments in India due to geopolitical concerns and fears of losing technological control. Automakers are required to notify the Chinese government if they plan to invest in Turkey. These restrictions reflect China's increasing caution regarding global competition, even as Chinese automakers seek to grow globally to offset domestic market challenges.
Mindmap
Keywords
💡EV Technology
💡Knockdown Kits
💡Giga casting
💡Globalization Efforts
💡Trade Barriers
💡Assembly Plants
💡Advanced EV Technology Export Control
💡Joint Ventures
💡CKD/SKD Models
💡Foreign Investment Restrictions
Highlights
Chinese manufacturers are expanding their operations globally by building factories in countries like Mexico, North Africa, Turkey, Europe, Thailand, and Brazil.
China's government is discouraging its automakers from sharing advanced EV technology with other countries, aiming to retain their technological edge.
Chinese automakers are developing highly advanced electric vehicles (EVs), including 800-volt platforms and giga casting technology, which can charge from 10% to 80% in just 19-20 minutes.
Chinese automakers are forming joint ventures with global companies, including Volkswagen, Mercedes-Benz, and Audi, investing heavily in China's EV sector.
China's Ministry of Commerce is advising automakers to focus on assembling cars abroad, rather than manufacturing key components outside of China, to protect EV technology.
China is promoting knockdown kits (CKD and SKD models) for overseas factories, allowing final assembly abroad while retaining core manufacturing in China.
Some automakers, like Great Wall Motor, have adopted the knockdown kit strategy, partnering with international assembly companies such as EP Manufacturing in Malaysia.
China's government has banned auto-related investments in India, urging automakers to avoid the market due to past issues with nationalization and risk of losing control of assets.
China is closely monitoring automakers' investments in Turkey and other countries, requiring government approval before proceeding with overseas ventures.
China's strategy of retaining key production in the country could slow the globalization efforts of Chinese automakers seeking to expand into competitive international markets.
Despite government restrictions, some Chinese companies, such as BYD, are building factories in India, reflecting a complex relationship between the company and Chinese authorities.
Many Chinese automakers are facing tough competition in their domestic market, pushing them to expand aggressively into foreign markets.
Chinese manufacturers are disrupting traditional auto markets, such as Thailand, where they are challenging Japanese automakers like Toyota by building factories and capturing significant market share.
Chinese EV companies are playing a crucial role in reshaping the global auto industry by expanding overseas, despite the government's concerns about sharing technology.
China's caution about sharing EV technology stems from fears that rivals in other countries could use it to catch up and compete more effectively in the global EV market.
Transcripts
China is telling its manufacturers but
guys n just decided to build factories
in Mexico B is building factories in
Mexico in North Africa in uh turkey in
Europe as well they're building them in
Spain in Brazil all over the world
different manufacturers are doing this
in Thailand there's various factories
going up from different Chinese
manufacturers of EVs and China the
government of China is saying we don't
want this we don't want you to share
your technology with other countries
we're are more advanced than the rest of
the world you need to hold on to this
technology make sure it doesn't get into
the hands of Rivals hello my friends
welcome to the channel I'm Sam Evans
you're watching the electric Viking
great to have you with us now for some
context here guys I have pre-ordered a
car um I paid the deposits I haven't I
haven't paid the full amount yet it's
the X Pang G6 and I'll put a link in the
description if you want to check that
out so you know I understand what China
is saying I mean if you look at the
charging speed it is it is amazing they
can charge in from what I've seen in the
real world about 19 or 20 minutes from
10 to
80% that's insane I mean that technology
is incredible the 800 volt platforms
they're using the Giga casting they're
using yeah Tesla does it but China does
it in some ways China's doing it even
better the software they're using is
actually quite Advanced as well I mean
why else with the Volkswagen group
mercedesbenz Audi they're all investing
billions and billions of dollars into
China into these joint ventures what
about santis with leap motor they're all
investing massive amounts into these
joint bener Partnerships with Chinese
car companies and these Chinese car
companies are planning on building all
these factories overseas and Chinese
government's like hang on a minute uh we
now have the technology I don't think we
want this going into your hands because
then that gives you an opportunity to
catch up now I'm not saying that's
actually true but that's what the
Chinese government believes and China is
asking makers to not actually
manufacture all these Key Parts outside
of China they're saying yes that's fine
build a factory but do what the electric
Vikings said you were going to do now
guys I did say this a many times I said
these factories are not really going to
be factories they're going to be
assembly plants and that's what the
Chinese government's saying as well
China is strongly advising its
automakers to ensure that advanced EV
technology stays at home in China and
has told them that want them to build
knockdown kits for these foreign
factories so all these foreign countries
all these countries around the world
obviously a lot of Chinese car
manufacturers are aing to get around
these tariffs these tariffs on Chinese
carts by building factories outside of
China then shipping the cars into
consumers in
Europe but these factories as I've
mentioned they're not really car
factories I mean yeah they are but
they're going to be assembly lines
essentially so all the parts will be
sent over the kit that's what China is
saying they want to encourage these
manufacturers to do send all the parts
over to the kit and then like
essentially an assembly plant now don't
get me wrong that's still a huge part of
manufacturing a car so this doesn't mean
that I mean that's probably more than
60% of the work it's a huge part of the
job but it's still not really
technically like say a Tesla gigafactory
where everything happens inside that
factory China has said that it's
encouraging automak is to export
knockdown kits meaning that key
components of the cars will be produced
domestically in China then shipped to
destination markets for final
assembly localization efforts through
knockdown kits assembly typically
include completely knockdown which is
called CKD and skd which is semi knocked
down now this makes it sound like you
actually build the car then knock it
down and then rebuild it in its
destination country or in its
destination Factory that's not actually
the case it's it's that's kind of um a
misnomer so what it actually is is they
send the parts the finished products it
might even been mean the structural
battery pack is already completed it's a
large part they'd send that and then of
course they do the the final assembly at
the location at the destination Factory
some chinaese automakers have already
adopted the strategy in international
market markets such as Great Wall motor
which in January finalized the signing
of a vehicle assembly partnership with
Malaysian company EP manufacturing burad
based on the CKD model so that is like a
contract
manufacturer or contract assembly
company and obviously greatwell Motors
sends them all the stuff and they put it
together China's Ministry of Commerce
held a meeting with more than a dozen
automakers in July and told them not to
make any auto related investments in
India so they've been told and I'm not
sure how the Chinese government though
feels about by cuz B have invested in
India they're actually building several
factories in India so yeah I mean maybe
that's one of the reasons why Bo has a
lower tax rate than other Chinese
manufacturers maybe B are not really
getting any incentives from the Chinese
government but now they're too big for
the Chinese government to really kind of
take them down they're just saying yeah
okay we're going to do what we want
that's kind of interesting to hear that
sort of a disconnect here between by and
the Chinese government automakers
looking to invest in Turkey should first
notify the ministry of industry and
information and technology in China
which oversees China's evb sector and
the Chinese Embassy in Turkey so they've
got to you know really run this by the
government if they want to invest in
Turkey India's been to they've been told
no India turkey
maybe mofcom's guidelines require that
key production should remain within
China which could hurt automakers
globalization efforts as they look for
new customers to offset stiff
competition and sluggish domestic sales
says the report they noted at the
meeting that the countryes inviting
China's automakers to build plants are
usually those that are enacting or
considering trade barriers to Chinese
cars except for the United States the
United States is like no we don't we
want nothing to do with you China go to
hell everywhere else is like yeah you
know well many other places obviously
Europe in particular yeah you can build
factories here and sell here but um
otherwise we're going to tax you pretty
significantly so that's one way to get
them to build f in Europe but it is a
bit of a trojan horse you can't of Crea
a trojan horse there I think officials
told at attendees that manufacturers
should not blindly follow Trends or
believe foreign governments calls for
investment so they're saying foreign
governments could trick them now I
believe they're referring to India here
when they say that um this kind of their
rationale for saying don't invest in
India or you're not allowed to is
because it's true the Indian government
has basically seized factories from
major factories from companies just says
no we want that now go away that has
happened so not saying it will happen
again but it has happened so there is a
possibility it is a little a risk you
have to consider and that's why I've
said a number of times I don't believe
Tes will ever build a factory in India
you never know though I could be wrong
Chinese automakers are stepping up their
efforts to build factories overseas says
cenf post.com as competition in the
domestic Market gets tougher and tougher
and if you look at it they've done this
incredibly well in some places already
like for example Thailand was just
Toyota Toyota country was Thailand now
all these Tha these Chinese
manufacturers have started building
factories in Thailand targeted the Thai
market and that has completely changed I
mean these Chinese automakers have
completely disrupted the Thai auto
market they will do the same in many
other countries many other locations but
the Chinese government is still wary
that could be giving away their
technology to their Rivals now I don't
think this is really true I think um
that's unlikely to actually be all that
relevant but what do you guys think let
me know what you what your thoughts are
about all this in the comments thanks
for watching
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