“Relocate Westward” or “Stay Close to Cities”? The Warehousing Dilemma for NEV Makers

With extended government subsidies and trade-in incentives, the new energy vehicle (NEV) market continues to surge in 2025. However, rapid growth brings a critical supply chain challenge: whether to shift operations westward for cost benefits or stay close to eastern urban centers for faster customer response.

“Relocate Westward”: Pursuing Cost Efficiency

Many automakers are moving warehouses to central and western regions, drawn by lower land and labor costs, tax incentives, and industrial clustering. This strategy strengthens supply chain collaboration and taps into growing local markets.Yet, serving eastern consumers from the west increases delivery distances, making it difficult to meet urgent after-sales demand in key coastal cities.

“Stay Close to Cities”: Prioritizing Efficiency

While moving west cuts costs, establishing suburban warehouses prioritizes speed. These “forward deployment” sites enable faster after-sales service, reduce last-mile delivery costs, and offer flexibility to handle demand fluctuations.However, high land costs and limited storage space in urban areas pose constraints.

A Balanced Approach: Combining Cost and Efficiency

Rather than choosing one model, NEV makers can adopt a hybrid strategy based on product characteristics. This is precisely where the value of Forest Logistics Properties's nationwide logistics network lies.

• For bulky, stable-demand production components (e.g., power batteries), central distribution centers (CDCs) in key western hubs—such as Forest logistics parks in Xi'an, Chengdu, Wuhan, and Changsha—offer cost-efficient, large-scale storage.

• For high-frequency after-sales parts, regional distribution centers (RDCs) in coastal cities—like parks in Shanghai, Nanjing, and Guangzhou—ensure fast, responsive service.

Whether cutting costs or improving efficiency, a resilient supply chain is key to staying competitive. With a nationwide, diversified warehouse network, Forest Logistics Properties provides tailored solutions to help NEV makers adapt and grow in a fast-changing market.