Chinese EV makers are outpacing U.S. automakers in overseas investments
China has a saturated domestic market, which has led Chinese companies to look elsewhere to sell electric vehicles.
China has a saturated domestic market, which has led Chinese companies to look elsewhere to sell electric vehicles.
Already dominant electric vehicle exporters, Chinese automakers have been expanding their footprint by announcing investments and building factories on virtually every continent.
Those auto companies have been outpacing American automakers in investments, said analysts, who told CNBC that the U.S. risks becoming isolated and less competitive in comparison as China builds up its presence.
"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."
Ford and General Motors did not respond in time to a request for comment.
Atlas Public Policy, a think tank that tracks clean tech investments, found that Chinese companies announced overseas EV and battery investments totaling close to $101 billion from 2019 to 2025. The group said U.S. companies invested just over $38 billion in the same period.
Analysts disagree about just how much should be counted when tracking Chinese investments abroad.
For example, Rhodium Group analyst Armand Meyer and his colleagues estimate that foreign direct investments since 2014 by Chinese companies in all clean tech sectors — solar, wind and EVs — was around $173 billion. That estimate is far lower than what they called "loose tallies of deal announcements" by other tracking groups that have totaled close to $400 billion. Rhodium Group also said that only about half of the announcements they tracked, roughly $85 billion, actually materialized in the form of completed factories or facilities.
"It's just probably less of a threat than we expect in terms of size," Meyer said.
Tom Taylor, senior policy analyst at research firm Atlas Public Policy, attributes discrepancies to different tracking approaches in which facilities and years are counted.
Still, American companies had been leading Chinese ones in foreign direct investment through 2021, according to Atlas Public Policy data. After that, it flipped.
There have been three factors behind that. For starters, China's "brutal" domestic car market is saturated, Chan said, suffering from price wars and excessive factory capacity.
"The net effect of that within China is it's a really tough place to make profits," Chan said. "So what's the next alternative? The next alternative is to export or to look to global markets."
Overseas demand has also been strong for Chinese EVs. Eighty percent of electric vehicles sold in Latin America are Chinese, for example, according to auto industry analyst Felipe Muñoz.
"The unprecedented growth of the Chinese cars demand outside China is accelerating," Muñoz wrote in a report this month.
According to Muñoz's data on new light vehicle sales from 86 markets around the world in the first quarter, Chinese vehicle sales grew 51% year over year. Growth was faster in developed economies, such as Europe and Australia.
Factories are long-term investments — a deeper commitment than container ships of cars showing up in a port somewhere. But the timing of the surge also indicates a third factor: tariffs.
In the face of a flood of Chinese EVs, many countries have erected trade barriers to either protect local industries or leverage the Chinese desire for market access to grow manufacturing employment.
