As tariffs and other trade restrictions make direct sales into the U.S. and Europe harder, Chinese automakers are exploring other routes for expansion. South Korea is increasingly being viewed as a possible production hub that could help sustain electric vehicle growth as global trade becomes more political.
That shift could influence where cleaner cars are built, where factory jobs grow, and which companies look best positioned for growth.
What's happening?
Instead of leaning mainly on exports or purchases of foreign brands, Chinese automakers are pursuing Korean manufacturing tie-ups, co-development arrangements, and local production partnerships, according to UPI.
KGM plans to sell 108.1 billion won, or about $75 million, in convertible bonds to Chery Global Innovations, an affiliate of Chery Automobile.
If converted into equity, those bonds would give Chery an ownership stake of roughly 10% in KGM.
The first vehicle the companies are developing together, the SE10, is a large SUV set to debut in January 2027.
TCD Picks » Quince Spotlight
💡These best-sellers from Quince deliver affordable, sustainable luxury for all
Geely provides another case: It holds 34.02% of Renault Korea, whose Busan plant already builds the Polestar 4 electric SUV for export to North America.
Why does it matter?
The move highlights a broader tension in the auto industry: companies are pushing deeper into cleaner vehicles even as reaching major markets becomes more difficult.
The European Union has added countervailing duties to EVs imported from China, and the United States continues to impose steep tariffs on Chinese-made vehicles and parts.
The U.S. has also tightened restrictions on connected vehicles that use certain China-linked software, so assembling cars in South Korea would not automatically secure access to the American market.
South Korea still offers important advantages, including an established supplier network, skilled workers, strong manufacturing standards, and trade agreements with major markets.
As the world moves toward a cleaner economy, companies tied to electric vehicles, batteries, and advanced manufacturing are increasingly seen as growth plays, particularly as clean-tech businesses continue competing for capital, talent, and market share in ways fossil-fuel-focused models often struggle to match.
What's being done?
Automakers are responding by building partnerships that can spread risk and accelerate expansion.
Chery's investment in KG Mobility gives it a foothold in South Korea without having to start from scratch, while KG Mobility gains capital and product-development support.
For Geely, the appeal is the ability to use a Korean manufacturing base that already exists through Renault Korea. Producing vehicles there for overseas markets can help limit tariff exposure, draw on experienced labor pools, and improve supply-chain resilience.
The clean economy is still drawing major industrial investment even as trade rules change. More localized production can mean more factory work, more supporting jobs at parts suppliers, and more competition in the electric vehicle market.
Companies are building flexible, regionally diversified manufacturing networks, and resilience is becoming as valuable as scale.
Whether South Korea becomes a lasting bridge into Western auto markets will depend on trade policy and software rules. Still, the push is another sign that automakers see cleaner vehicles, smarter manufacturing, and international partnerships as central to the industry's future.
Get TCD's free newsletters for easy tips, smart advice, and a chance to earn $5,000 toward home upgrades. To see more stories like this one, change your Google preferences here.
