🧠 Food for thought

Implications, context, and why it matters.

The export surge masks a deeper shift to overseas manufacturing

• Battery exports are rising partly because domestic overcapacity has cut China’s industry average utilization rate to about one-third of maximum capacity, which is pushing producers to find demand overseas 1.
• Companies are moving past shipments toward local factories, which can lower trade exposure while building a steadier foothold in priority markets 2.
• China Aviation Lithium Battery (CALB), a Chinese battery maker, signed a contract with the Portuguese government in January to build a lithium battery factory at the port of Sines with a total investment of 2.1 billion euros (US$2.43 billion). Haichen Energy Storage, a Chinese energy storage company, signed an investment intention letter with Spain in March for a planned 400 million euros (US$470 million) battery and energy storage system manufacturing plant 2.
• Outside Europe, Chinese battery and energy storage firms are also aiming at emerging markets such as the Middle East and Latin America, described as new growth engines for energy storage 3.

European anti-subsidy duties on battery electric vehicles are pushing Chinese automakers to shift toward plug-in hybrids

• Chinese EV exports still face pressure because the European Union (EU) has set definitive countervailing (anti-subsidy) duties of 7.8% to 35.3% on battery electric vehicles (BEVs) from China 4.
• Plug-in hybrid electric vehicles (PHEVs) are not covered by these duties, so Chinese automakers are steering sales toward non-BEV models to limit the hit 5.
• BYD and SAIC, two major Chinese automakers, are changing their EU mix. PHEV sales are on track to pass BEV sales in 2025 5.
• In March, PHEVs made up 41% of BYD’s EV sales in the EU 5.