To avoid trade barriers, Chinese companies are investing in Europe. Spain is ready to play the connector country between the European bloc and the People’s Republic. Its government agreed to work with Chinese turbine giant Envision Energy to build a €1 billion green hydrogen industrial park. Car makers are also scouting the old continent.
The threatened increase in tariffs on Chinese electric vehicles that could reach as much as 45% boosted the search for joint ventures and direct investments in Europe. Last spring the Chinese car maker Chery committed to a €400 million investment with Spanish Ebro EV Motors to produce vehicles in Barcelona. The battery supplier CATL (Contemporary Amperex Technology) is negotiating with car manufacturer Stellantis to expand its battery production. The €2.5 billion investment should land near Zaragoza in the Aragon region. Chinese car maker MG is also looking for a plant in Europe. Spain, Hungary and the Czech Republic are on its short list.
BYD, another car maker, is building a plant in Szeged, Hungary, that is expected to open in 2025. And Zhejiang Geely Holding Group, a Chinese automotive company that owns Volvo and Polestar, is searching for a possible site in Europe.
Spain, Hungary and other neighboring countries expect thousands of job creations and access to EV cutting edge technology because China is said to be one step ahead of its competitors. On the other hand, Chinese investors are buying the “made in Europe” tag that will spare them heavy trade tariffs. According to data firm Mergermarket, Chinese buyouts of European assets has climbed more than 48% in 2024, compared to 2023 to reach €9.4 billion. Chinese investors are not focused solely on Europe. They also look for the “made in America” label that will protect them from future Trump tariffs. For example, Gotion is building a $2.4 billion plant in Grand Rapids, Michigan, to produce lithium battery components. And CATL is negotiating for battery investments with Ford and General Motors. Geely, the owner of a Volvo plant in Charleston, South Carolina, is opening its doors to another brand of the group, Polestar.