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Domestic Value-added and Technological Independence in Chinese EVs

Author

Listed:
  • Yuqing Xing

    (National Graduate Institute for Policy Studies, Tokyo, Japan)

  • Peihao Yang

    (China Electronics Standardization Institute, Beijing, China)

  • Kun Cai

    (University of International Business and Economics, Beijing, China)

  • Zhi Wang

    (Institute of Global Development, Tsinghua University, Beijing, China
    Schar School of Policy and Government, George Mason University, USA)

Abstract

This paper examines supply-chain localization, domestic value capture, and technological dependence in Chinese electric vehicles using product-level teardown evidence from two representative battery-electric models: the BYD Seal and the Tesla Model 3 manufactured in Shanghai. We identify Tier-1 suppliers, classify them by location and ownership, allocate bill-of-material costs across major subsystems, and adjust domestic content using sector-level value-added and import coefficients from China’s 2023 input-output table. The results show that the supply chains of both vehicles are highly localized in China: 90.8% of BYD Seal suppliers and 96.7% of Tesla Model 3 suppliers are located in China. The estimated domestic value-added share is 82.9%–90.4% for the BYD Seal and 51.3%–57.9% for the Tesla Model 3. Chinese firms dominate batteries and several core EV subsystems, but foreign suppliers remain dominant in advanced automotive semiconductors, especially computing, memory, sensor, and microcontroller chips. The findings highlight both the depth of China's EV supply-chain capability and its remaining technological bottlenecks.

Suggested Citation

  • Yuqing Xing & Peihao Yang & Kun Cai & Zhi Wang, 2026. "Domestic Value-added and Technological Independence in Chinese EVs," GRIPS Discussion Papers 26-4, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:26-4
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