China to consider relaxing foreign EV maker restrictions
BEIJING: China is discussing a plan to allow foreign carmakers to set up wholly owned electric-vehicle businesses in its free-trade zones in a major revision of a fundamental principle governing the country’s auto industry policy since the 1990s, according to company officials briefed on the matter.
The plan, which is subject to change as a final decision hasn’t been made, could be put in place as early as next year, the people said, asking not to be identified as the deliberations are private. If the policy takes effect, it would be a landmark departure from the existing rules, which require foreign automakers to set up joint ventures with local counterparts.
A relaxation of the joint venture rule would give companies like Tesla Inc the opportunity to set up fully owned manufacturing operations in China, the world’s biggest market for electric vehicles.
Ford Motor Co is exploring setting up a joint venture to produce electric vehicles in China with Anhui Zotye Automobile Co. while Volkswagen AG has partnered with Anhui Jianghuai Automobile Group Corp to make electric cars. Volkswagen welcomes any liberalization of markets, in principle, a company spokesman said by phone.
No changes are being made to the automaker’s existing joint ventures or agreements in China.
Said Deep, a Ford spokesman, said it was too early to speculate on the potential policy change. Representatives for BMW AG, Daimler AG, General Motors Co and Tesla declined to comment.
BYD Co, the battery-car maker backed by Warren Buffett, jumped as much as 11% to HK$67.95, the highest intraday price in more than seven years. Geely Automobile Holdings Ltd gained as much as 7.5% to HK$24.40.
China’s Commerce Ministry, which is responsible for formulating policy governing foreign direct investments, said in an emailed response to Bloomberg News that it will “actively implement the opening up of the new-energy manufacturing sector to foreigners, together with other departments under the direction of the state council.”