Welcome to the Daily 5 report for Monday, Aug. 18.
There's new evidence the Chinese are willing to invest more money into electric vehicle manufacturing abroad despite pending trade negotiations with the U.S. and the ongoing threat of new tariffs.
In fact, Chinese companies involved in EVs invested more overseas than domestically for the first time in 2024, Bloomberg reported today. And those foreign projects still face higher costs, delays and risks.
Firms along the supply chain invested around $16 billion overseas last year — mostly in battery production, and just ahead of the $15 billion spent at home, research company Rhodium Group said in this story from Bloomberg. The figures represent a "historic shift" after years of directing about 80 percent of investment domestically, Rhodium said in the report.
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In short, Chinese EV companies face overcapacity at home and they want to avoid tariffs or other sanctions in the U.S. and Europe. Foreign customers want localized production, Bloomberg's story says.
"The fact that overseas investments now outpace domestic ones reflects a saturated Chinese market and the strategic appeal of expanding abroad for higher returns," Armand Meyer, senior research analyst at Rhodium and an author of the report, told Bloomberg.
The stakes are high for the future of EVs in North America. For now, automakers must face the reality that they still need Chinese EV expertise, particularly in the supply chain.
In other highlights, we introduced the quarterly Auto Industry Confidence Index, a measurement by Automotive News of both how this broad global industry feels about its current state and how it feels about the next six months. Stay tuned for more stories from this index all week.
We're also launching the latest chapter of our annual Future Product Pipeline report focusing on Hyundai Group brands, with today's emphasis on Hyundai.
As Carly Schaffner wrote, the Hyundai brand continues to lean into its strategy of becoming a leading automaker with a plethora of powertrains and body styles for U.S. consumers.
Hyundai Motor North America CEO Randy Parker said: "Whichever way the market pivots, we'll pivot with it to take care of our customers."
That's it for now. If you want to see this story in your browser, click here.
— Philip Nussel, online editor
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