Cisco CSCO has expressed optimism about its growing relationship with Chinese electric vehicle (EV) manufacturers, despite escalating trade tensions. The tech giant sees the EV sector as its second-largest in the region, with most of its revenue coming from manufacturing companies.
What Happened: Ming Wong, vice president and CEO of Cisco Greater China, stated that the company is currently collaborating with at least 10 electric car customers as they expand their factories, offices, and research and development centers overseas, CNBC reported on Wednesday.
Despite increased tariffs on Chinese EV imports by the U.S. and potentially the European Union, Chinese EV manufacturers continue to expand globally. Companies like BYD are investing in local factories, undeterred by the trade tensions.
"At least as of now, we don't hear anything from the [EV] customers saying that, ‘Oh, because of this, we need to stop investing, or we need to slow down,'" Wong said.
"It's actually the other way around. A lot of things happening. They will keep pushing, going forward, and we'll see how this will evolve."
Wong remains hopeful that Cisco’s business in China can return to growth this year, as both state-owned and non-state-owned businesses turn to Cisco for their global expansion. Despite a 13% fall in total revenue in the latest quarterly reporting period, Wong expects the Asia-Pacific region to grow more quickly in the next one or two years.
Why It Matters: The optimism from Cisco comes despite a decline in its shares after its fiscal third quarter results. Meanwhile, China has been investing heavily in its EV industry, with more than $230 billion invested over the past decade. This investment has led to a rapid rise in China’s new industries, as stated by Premier Li Qiang at the World Economic Forum in Dalian, China. He defended China’s EV and lithium-ion battery industries against allegations of overcapacity and unfair subsidies from the West.
The ongoing trade tensions and potential tariffs on Chinese-made EVs by the U.S. and EU have not deterred the growth of Chinese EV manufacturers, nor Cisco’s optimism about its business ties with them.
Price Action: Cisco was trading 0.06% lower at $47.25 on Tuesday’s pre-market after it closed at $47.28, according to Benzinga Pro.
Image via Shutterstock
This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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