China’s government is reportedly considering a relaxation of its rules applying to foreign inward investment in order to boost the EV market and sector in the country.
Bloomberg reports that Beijing is discussing a plan to allow foreign carmakers to set up wholly owned EV businesses in its free-trade zones. It would be a major change as China has insisted, since the 1990s, that foreign automakers operate with local partners in joint ventures.
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The report said that the change could take place next year, although the final decision has yet to be made. Bloomberg cited anonymous sources in the report.
Such a policy relaxation could be good news for companies such as Tesla who may be looking to set up operations in China; under the new policy they would have much more control with wholly owned subsidiaries. Earlier this year it was reported that Tesla was in talks over a potential manufacturing site in Shanghai. However, some commentators have suggested that China’s free-trade zones are heavily geared to encourage exports and that operating from them to supply China’s domestic market may still require partnering with a local firm. The details accompanying any change to regulations will clearly need to be closely scrutinised by potential overseas investors.
A number of Western OEMs are working on EV partnerships with local partners in China.
China is planning a big push in EVs and plug-in hybrids and wants to quadrouple so-called New Energy Vehicle (NEV) sales to over 2m units by 2020.
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