Domestic Value-added and Technological Independence in Chinese EVs

Yuqing Xing, Peihao Yang (), Kun Cai () and Zhi Wang ()
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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

No 26-4, GRIPS Discussion Papers from National Graduate Institute for Policy Studies

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.

Keywords: electric vehicles (EVs); global value chains (GVCs); value added; industrial policy; technological independence; China (search for similar items in EconPapers)
Pages: 53 pages
Date: 2026-07
New Economics Papers: this item is included in nep-bec
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