Global automakers seek deeper integration into China's smart supply chains

This photo shows the booth of AITO during the third China International Supply Chain Expo (CISCE) in Beijing, capital of China, July 16, 2025. [Photo/Xinhua]

As global supply chains undergo digital transformation, major automakers are looking to deepen their integration into China's advanced manufacturing and smart supply chain systems.

At the ongoing China International Supply Chain Expo in Beijing, industry leaders underscored how China's maturing electric vehicle (EV) ecosystem, technological depth and industrial scale are shaping the next phase of global automotive production.

For Tesla, China is not just a market; it has become a core pillar of its global supply chain strategy. The company's Shanghai Gigafactory, now producing one vehicle roughly every 30 seconds, has achieved a 95 percent local parts integration rate for its Model 3 and Model Y lines.

The company said the factory's output accounted for nearly half of Tesla's global deliveries as of June, with over 3 million vehicles having rolled off its assembly lines since its launch.

Beyond vehicle production, Tesla is expanding into energy storage with its first overseas Megapack factory, also located in Shanghai. Officially launched in February 2025, the facility was built and operational in just nine months, with an annual production capacity of 40 GWh. Megapacks from this factory are now being exported to markets across the Asia-Pacific, further embedding Tesla into China's smart energy supply networks.

"China has the world's most complete EV (electric vehicle) supply chain, with top-tier local suppliers and highly responsive manufacturing capabilities," an unnamed Tesla spokesperson told Xinhua.

He added that China's large talent pool in artificial intelligence (AI), EV engineering and advanced manufacturing has become essential to Tesla's localized R&D.

"Whether it's supply chain resilience, innovation capacity or market scale, China continues to offer unique advantages," said the spokesperson.

German auto supplier Bosch shared similar views. The company presented its localized innovations in electrified powertrains and driving assistance systems at the expo, emphasizing the rapid technology iteration happening in China.

"China leads the way in electrification, intelligence and the shift to software-defined vehicles," said David Xu, president of Bosch China. "Its consumers adopt new technologies quickly, which drives faster product evolution and continuous innovation in the auto sector."

Bosch is advancing its R&D and production capacity in China, a strategy it views as critical for keeping pace with the country's fast-moving automotive market.

Swedish carmaker Volvo returned to the expo for the third consecutive year. Sandra Liu, vice president of government affairs at Volvo Cars Asia Pacific, said the expo offers "a platform to promote collaboration across supply chain tiers, foster interaction among companies of all sizes, and integrate industry, academia and research."

Volvo's booth featured the newly launched S90 and its flagship electric SUV EX90, in a bid to engage global supply chain partners and demonstrate the brand's commitment to high-quality growth and sustainable mobility.

With geopolitical uncertainty still clouding global trade, China's combination of industrial depth and digital infrastructure is seen as a stabilizing force.

As electrification, automation and digitalization reshape the global auto industry, integration into China's supply chain is no longer optional -- it is strategic.