China's Global Investments in the EV Value Chain
A new interactive dashboard from the China Cross-Border Monitor investigates China's investments across the whole EV value chain.
Research Note
- China’s domestic electric vehicle (EV) industry is in a state of significant overcapacity. Battery production capacity in 2024 was double domestic demand and 20% greater than global demand, triggering a 90% collapse in new domestic investment compared to the policy-fueled investment boom in 2021–2022.
- Chinese firms are accelerating globalization to escape domestic price wars. Chinese outbound foreign direct investment (OFDI) in the EV value chain soared from an annual average of $8.5 billion in 2018-2021 to $30.4 billion in 2022-2024, driving an overall rebound in China’s global outbound investment. In 2024, EV investment by Chinese companies was greater overseas than domestically for the first time, a historic reorientation of capital as companies seek profitability outside of a domestic market facing “involution.”
- The momentum for new investment has cooled but completed investments are reaching record highs. Since 2024, announced EV investment have dropped nearly 50% from 2022–2023 levels, but the share of completed Chinese FDI going to EVs continues to grow. In 2021, only 5% of Chinese FDI was dedicated to the EV value chain, but by 2024, that had grown to 25%.
- The geographic focus is shifting from Europe toward Asia and the Middle East and North Africa (MENA). Before 2024, Europe received 41% of announced Chinese EV investment. Since then, flows have shifted to Asia and the MENA region, drawing 33% and 25% of new investment, respectively.
- Chinese investment is diversifying across the EV value chain. Battery cell projects are no longer the sole focus. Firms are increasingly establishing overseas facilities for battery materials and vehicle components, while downstream assembly projects gather momentum in response to foreign market-access requirements and protectionist trade measures.
- Private firms dominate China’s global EV investment push. They account for more than 85% of total investment and signal the rise of commercially competitive, globally ambitious Chinese companies. While overseas investors are diverse, they are more concentrated than in domestic markets: The top five investors represent 38% of total value and CATL alone is responsible for nearly 11% of all investments in the EV value chain.
China's Global Investments in the EV Value Chain
See a short slide deck overviewing the main findings of the China Clean Tech Investment Dashboard.
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This dashboard tracks China's outbound investment in clean technology sectors, with an initial focus on the electric vehicle (EV) value chain. Coverage will expand to include all clean technologies in future updates.
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