EU probe unlikely to affect Chinese carmakers’ global expansion; BYD’s share prices could see more volatility – research
POLICY & REGULATION VIEWS & ANALYSIS
EU probe unlikely to affect Chinese carmakers’ global expansion; BYD’s share prices could see more volatility – research
POLICY & REGULATION VIEWS & ANALYSIS

EU probe unlikely to affect Chinese carmakers’ global expansion; BYD’s share prices could see more volatility – research

 

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The EU’s anti-subsidy probe into Chinese electric vehicles is unlikely to affect Chinese brands’ plans for global expansion and even if the EU introduces protective measures to slow the pace of development, it won’t halt such plans, Morgan Stanley said in a note.

However, the uncertainty of the EU’s policy and the tense US-China relationship may cause Chinese brands to increase their development in other emerging regions, particularly in ASEAN countries, and they may also refocus on the local market, increasing local price competition, it said.

Much of China’s subsidies to EV manufacturers are related to support for R&D and production facilities, making it difficult to quantify how much is export-related, the broker noted.

The direct impact on this year’s sales will be small, but companies with higher market share in China and ambitions for Europe, such as BYD Company, could see more volatility in their share prices, it said.

In the short term, NIO and Xpeng Motors could be affected, but they have sufficient growth in China to offset the negative impact, and auto parts makers that already have a presence in Europe may benefit, including Minth Group and Fuyao Glass, it said.