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China’s Battery Firms Urged to Proceed Cautiously with Overseas Expansion Amid Policy Uncertainty

Published: Nov. 14, 2025 3:29 a.m. GMT+8

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SVOLT Energy Technology Co. Ltd.’s battery plant in Changzhou, Jiangsu province, on Oct. 22, 2023.

China’s battery makers should exercise greater caution when building factories in Europe and the U.S. due to fast-shifting policy environments, a senior industry executive warned Tuesday.

Yang Hongxin, chairman and CEO of Chinese battery startup SVOLT Energy Technology Co. Ltd., told the World Power Battery Conference on Tuesday that regulatory uncertainty and sharply higher operating costs overseas pose major risks to Chinese companies planning global expansion.

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Chinese battery makers face major risks expanding in Europe and the U.S. due to regulatory uncertainty and higher costs, with German factory costs 50% above Chinese levels.
The EU's 2035 ban on ICE vehicles boosted battery demand and localization, but EV adoption and policy support remain uncertain; some automakers urge policy review.
U.S. policy changes, including the 2025 repeal of EV tax credits under Trump, and waning EV demand have triggered job cuts and production pauses at American plants.

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Who’s Who

SVOLT Energy Technology Co. Ltd.: SVOLT Energy Technology Co. Ltd. is a Chinese battery startup. Its Chairman and CEO, Yang Hongxin, advised Chinese battery makers to be cautious when building factories in Europe and the U.S. due to policy changes and high operating costs. SVOLT once declined a large order from BMW due to the high cost of building a plant in Germany.

Contemporary Amperex Technology Co. Ltd.: Contemporary Amperex Technology Co. Ltd. (CATL) is a Chinese battery maker that has significantly invested in Europe, with factories in Germany, Hungary, and Spain. They promote a "license-and-operate" model, providing technology and operating factories financed by automakers, as seen in their venture with Ford Motor Co. This approach allows them to avoid some risks associated with direct overseas expansion.

BMW: BMW had proposed a significant battery order to SVOLT Energy Technology Co. Ltd., contingent on the Chinese battery startup building a factory in Germany. However, SVOLT ultimately declined due to the high construction and operational costs in Germany, which were estimated to be 50% higher than in China.

General Motors: General Motors announced job cuts in October 2025 at its Michigan and Ohio plants due to weakening demand for electric vehicles. Additionally, two of their associated battery factories are slated to halt production in January 2026 for upgrades.

Ford Motor Co.: Ford Motor Co. is mentioned in the context of a "license-and-operate" model venture with CATL. In this arrangement, CATL provides technology and operates factories that are financed by automakers like Ford. This collaboration is already under construction.

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What Happened When

2023-08：: A revised EU Battery Regulation was enacted, introducing subtle localization requirements for battery production.

2025-07：: President Trump’s “Big and Beautiful Bill” was passed, revoking many EV-related tax incentives previously granted under the 2022 Inflation Reduction Act.

2025-09：: Related U.S. tax credits for EVs expired following the revocation by the 'Big and Beautiful Bill.'

2025-10-29：: General Motors announced 1,700 job cuts at plants in Michigan and Ohio due to softening EV demand. Two associated battery factories were scheduled to halt production in January 2026 for upgrades.

2025-11-12：: Yang Hongxin, CEO of SVOLT, spoke at the World Power Battery Conference, cautioning Chinese battery makers about overseas expansion risks.

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