A number of China’s largest carmakers are on the hunt for manufacturing capacity, as they plan to make use of idle plants and team up with legacy automakers in order to bring cars to market faster.
Many legacy automakers are keen to forge partnerships with Chinese EV brands, seeing as they clearly have the lead on battery technology and software, and can produce vehicles at extremely low cost using the latest manufacturing advances.
What’s more, the slow-burning demand for many Western electric vehicles has left manufacturers exposed, with some plants, of which many have been re-tooled and refreshed at great expense, currently operating at a fraction of their capacity.
“In the short-term, European carmakers need to optimize their factories and Chinese automakers want to enter the market, so it makes sense. But I do worry about what that actually means long-term,” Julia Poliscanova, senior director for vehicles and e-mobility supply chains at the campaign group Transport and Environment, told CNBC.
“Once they help the Chinese brands get that brand awareness and once people get the car and see that it’s not such a bad car, I think it can be a point of no return,” Poliscanova added.