China may make it easier for foreign electric car companies to operate in the country, and new competition could affect homegrown vehicle manufacturers.
The Chinese government claimed this week that it will remove foreign ownership caps for electric vehicle ventures this year. Beijing currently limits the size of the stake a non-Chinese company can hold in a joint venture.
The move, while significant, is unlikely to have a huge effect on already established joint ventures in China, according to James Chao, the managing director for Asia Pacific at research firm IHS Markit.
Chinese companies already operating with partners from outside China have "developed a management structure and operational cadence with their joint venture partners that frankly works, and they'll continue with that," Chao told CNBC's "Capital Connection."