In China electric vehicles are subsidized, but only those produced with batteries made by companies on a specially approved list of manufacturers. Only one country is home to all 57 manufacturers on the list, China. So while foreign batteries aren’t illegal in Chinese electric vehicles, they are made completely noncompetitive because their Chinese competition is subsidized. Trefor Moss reports:
SUZHOU, China—Batteries have emerged as a critical front in China’s campaign to be the global leader in electric vehicles, but foreign auto makers and experts say it is rigging the market to favor domestic suppliers.
Tianjin Lishen Battery Co. here in eastern China recently agreed to sell its battery packs to Kia Motors for the EVs the South Korean company makes in China and is now in talks to supply General Motors , Mercedes-Benz and Volkswagen , a supervisor for the Chinese company said.
But that is largely because Tianjin Lishen has little foreign competition.
Foreign batteries aren’t banned in China, but auto makers must use ones from a government-approved list to qualify for generous EV subsidies. The Ministry of Industry and Information Technology’s list includes 57 manufacturers, all of them Chinese.
Foreign battery companies declined to discuss their absence. But analyst Mark Newman of Sanford C. Bernstein said the government has cited reasons such as paperwork errors to exclude foreign suppliers.
“They want to give their companies two to three years” without foreign competition to secure customers, achieve scale, and improve their technology, Mr. Newman said.
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