Investing.com — Chinese automakers invested close to $101 billion in overseas electric vehicle and battery projects from 2019 to 2025, while U.S. companies invested just over $38 billion during the same period, according to Atlas Public Policy, a think tank tracking clean tech investments.
American companies led Chinese firms in foreign direct investment through 2021, but the pattern reversed after that year, the data showed.
“We’re facing a situation where companies like BYD from China are becoming essentially the new GMs and Fords of the EV era,” said Kyle Chan, a fellow at the Brookings Institution. “They’re benefiting from scale from building out these global supply chains, from long-term investments all around the world. And they will be increasingly difficult to dislodge from their position increasingly as a market leader in this space.”
Three factors have driven Chinese automakers to expand abroad. China’s domestic car market has become saturated, with price wars and excessive factory capacity making it difficult to generate profits. This has pushed companies to seek opportunities in global markets.
Many countries have introduced trade barriers in response to Chinese EV exports, either to protect domestic industries or to use Chinese market interest as leverage for creating manufacturing jobs.
Chinese investment has concentrated in countries that either represent major markets themselves or provide access to larger markets, Chan said. A Chinese factory in Hungary, for instance, enables tariff-free access to the European Union market.
Building a global presence allows automakers to expand market share, establish complete supply chains and distribution networks, and develop technologies beyond basic electric vehicles, including software, sensors and power trains.
“That has spillover effects into other industries that are actually kind of connected, like robotics,” Chan said. “And so I think for Americans, we might feel like, ‘Oh, EVs, they’re OK. We’re not losing out too much.’ But you have to see what else we are missing when we skip this crucial step in the evolution of this broader technology wave.”
Chinese automakers have announced investments and built factories across multiple continents, including Europe, Asia, North Africa and Latin America.
“China’s doing a process that I call industrial diplomacy,” Chan said. “The countries that they are investing in … [are] countries where China either has a pretty good relationship or seeks to cultivate a better one.”
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