Chinese EV Firms Shift Capital Abroad Amid Domestic Squeeze and Foreign Tariffs

Chinese electric vehicle manufacturers and battery suppliers are redirecting investments overseas at an unprecedented rate in 2024, marking the first year foreign factory spending eclipses domestic outlays. Rhodium Group data reveals a strategic pivot to localize production in target markets as trade barriers rise and homegrown competition intensifies.

Battery plants absorb 74% of offshore capital, with lithium-ion component facilities dominating the investment flow. Assembly operations trail in monetary terms but show rapid growth—even as China's internal EV factory expenditures plummet from $90 billion (2022) to a projected $15 billion this year.

The European Union's tightening regulations and global tariff escalations have forced this calculus. Companies now prioritize building where they sell, though absolute foreign investment values remain modest compared to prior domestic peaks. Rhodium confirms 2024's cross-border spending has narrowly exceeded shrinking home-market commitments for the first time.