China’s top car exporter’s senior executive said the company is open to partnerships with U.S. automakers as it looks to expand in North America.
Analysts warned that despite strict restrictions, Chinese automakers can still find ways to enter the U.S. market.
“We’re very open to different options, even a potential partnership with American automakers,” Vice President Charlie Zhang of Chery told Reuters on Oct. 21.
Chery is one of several Chinese automakers that have flooded European and Latin American markets with their cheaper, new-technology cars, especially electric vehicles (EV).
Zhang did not reveal any specifics as to what kind of partnerships the company is seeking.
Chery has aimed for its debut in the Canadian market in early 2027. The Chinese automaker is behind the global export-focused automotive brands Omoda and Jaecoo.
The United States has so far effectively blocked Chinese cars through high tariffs and data security regulations.
“The United States, obviously, we are trying to look for different options there,” Zhang said.
So far, Volvo, a subsidiary of automaker Geely, is the only Chinese company to have officially received specific authorization from the U.S. Department of Commerce, having successfully navigated U.S. restrictions on connected vehicle technology from China and secured a written exemption.
Volvo was originally a European automaker, Wang He, a U.S.-based senior China analyst, noted.
“Although it was acquired by China’s Geely, it has maintained independent brand operations,” Wang told The Epoch Times.
“It made several critical commitments to the U.S. government regarding corporate governance, technical architecture, and data security, which have effectively ensured a complete separation in terms of both data and governance.”
The vehicles Volvo imports into the United States are essentially all manufactured either in Europe or within the United States, Wang added.
“The technical architecture derived from Geely—the parent company—accounts for only a very small portion.”
The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) enforces the Connected Vehicle Rule, which bans the sale and import of connected vehicles and software linked to China and Russia starting with the 2027 model year.
Zhang said he was confident that Chery would find a way to target the U.S. market, saying it would be possible to build a car that was not reliant on Chinese hardware or software.
“Definitely from a technical point of view, we will be able to find a China-free solution in terms of hardware and software,” he said.
Possible Ways Into US Market
Simply switching brands, finding U.S. distributors, or rerouting exports through Mexico or Canada will not automatically bypass the restrictions, Sun Kuo-hsiang, a professor of international affairs and business at Nanhua University in Taiwan, told The Epoch Times.
Furthermore, transactions involving the acquisition of U.S. companies, certain types of investments, or real estate deals may be subject to review by the Committee on Foreign Investment in the United States, Sun said.
“Chinese automakers must adjust their operational practices and technical arrangements to improve their chances of gaining U.S. market access.”
Both analysts said that for Chinese automakers, a more viable approach is to gradually integrate into the U.S. industrial supply chain through technical and capital partnerships, the supply of components, and local production—with the latter being effectively led by the American side.
Another path is to acquire overseas brands and then sell their products into the U.S. market, which is the “Volvo model,” Wang said.
Wang also warned that Chinese automakers can still find ways into the U.S. market through Mexico and Canada.
“Canada has now reached a deal with the Chinese regime regarding importing electric vehicles from China: they may enter the Canadian market subject to a maximum quota of 49,000 units and a tariff rate of 6.1 percent,” Wang said.
“Furthermore, the automotive emissions standards and various safety regulations in the United States and Canada are essentially identical.”
Survival-Driven Expansion
Currently, Chery is one of China’s largest automotive exporters, generating significant sales and profits across Europe, the Middle East, Latin America, and Southeast Asia.
However, the Chinese automotive industry is affected by China’s sluggish economy, production overcapacity, and low domestic demand.
Automakers have to engage in aggressive price-cutting, which squeezes already slim profit margins in the domestic market.
China has now become the world’s largest exporter of automobiles, Wang said.
“While the domestic market is super-competitive—it’s a cutthroat environment. For Chinese automakers to survive, they must expand into overseas markets, where profit margins are very high.”
Chery has already secured substantial capital and generated significant profits overseas; therefore, it is fully capable of entering the U.S. market, Wang said.
Major Chinese automakers still possess the capital and capability to negotiate partnerships with Western companies, Sun said.
However, whether such deals can materialize depends more on the U.S. side’s willingness to shoulder the associated commercial and political risks, as well as whether the proposed collaborations can pass muster under U.S. regulatory controls, Sun pointed out.
By looking for a U.S. partner, Chery is seeking to enter the U.S. market leveraging its own capital and technical expertise, Wang said.
“Once it has established a firm foothold in Canada, the next logical step will be to expand into the United States,” he said.
Six major U.S. automotive industry groups have sent a joint letter to the federal government, demanding that it continue to strictly block Chinese automakers from entering the U.S. market—whether through domestic production or imports.
The U.S. domestic automotive industry is firmly opposed to Chinese automakers’ attempts to find ways into the U.S. market, Wang said, which will put continuous pressure on the U.S. government to uphold the restrictions.
In addition, “The U.S. government has continued to pressure Mexico and Canada to prevent them from allowing Chinese-made components to enter the United States through changing production origin,” Wang noted.
Luo Ya and Reuters contributed to this report.
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