The Chinese government has instructed the country's electric vehicle manufacturers to use domestically produced components, including semiconductors, a diplomatic source said Sunday, amid a global chip shortage.
The move appears to be aimed at limiting the access of companies from other nations such as Japan and the United States from the Chinese market, as the country strives to establish a self-contained supply chain for producing EVs, the source said.
With China's EV market, which is the largest in the world, continuing to grow more competitive, the latest decision will likely affect Japanese automakers' strategies and their ability to collaborate with Chinese firms, the source added.
According to the source, a former ministerial-level official of China's Ministry of Industry and Information Technology urged the country's automakers last year to set numerical targets for using domestically produced components in EV semiconductors.
The government may impose penalties on Chinese automakers if they fail to meet the targets, the source said, while many of them have so far been able to acquire technology through joint ventures with Japanese, U.S., and European companies.
