What's New :
Mains PYQ Practice Programme. Visit Here

China’s Role in the Global Supply Chain

Published: 3rd May, 2024

Context

Elon Musk, the CEO of Tesla, arrived in Beijing to promote Full Self-Driving (FSD), after cancelling his highly anticipated trip to India, highlighting the significance of China in the global supply chain for the most valuable electric vehicle manufacturer in the world. Musk was there to promote Full Self-Driving (FSD).

  1. Dimension: China's hegemony in battery manufacturing
  • More than half of all electric vehicle (EV) sales worldwide are made in China, mostly due to the country's near-monopoly status in battery production, which is essential to the creation of EVs.
    • Contemporary Amperex Technology Co Limited (CATL), a significant Chinese battery manufacturer produces Two-thirds of the world's batteries, which also supplies Tesla.
  • Tesla's Dependence on China: China is now a key source of development for Tesla, outpacing the US and Europe in the production of electric vehicles.
    • The largest production plant of the EV behemoth was constructed in Shanghai in 2018 as a result of a new Chinese regulation that allowed foreign automakers to establish wholly-owned subsidiaries in that city.
  • China’s supply-chain advantage: Advanced material,skill levels, automation, logistics networks, policy-driven investment and commercial spending on research and development (R&D), dominance of certain natural resources and infrastructure to support the manufacturing ecosystem.

  1. Dimension: Challenges & Opportunities for India:
  • India faces challenges in establishing a robust EV supply chain, historically relying on battery imports.
  • The Indian government is incentivizing battery production through the PLI scheme for advanced chemistry cell (ACC) battery storage, aiming to capture a significant share of the global battery market by 2030.
  • Increased scrutiny of Chinese EV exports in Europe and the US presents opportunities for India to emerge as a competitive player in the global EV market.

Fact Box:

  • Six nations manufacture at least 3% of the world total. China is followed by the United States, Japan, Germany, India, and South Korea. 
  • Sector dominated by China: Automotive tech, computers, communications and electronic equipment, machinery, medicines, raw-chemical materials and metal products. 

Verifying, please be patient.

Enquire Now