Chinese EV stocks surge after EU slaps up to 38% additional import tariffs
Shares of Chinese electric vehicle makers mostly surged on Thursday after the European Union announced higher tariffs of up to 38% on Chinese EVs a day earlier.
Chinese EV-maker BYD, which was the top gainer on the Hang Seng Index, jumped 8% during morning trade but pared some gains to trade at about 6% in the afternoon. Geely was up about 4% initially, while counterparts Nio and Li Auto saw their shares climb about 1.5%. State-backed SAIC was down 1.5% in later afternoon trade.
Citi analysts said the EU's additional tariffs were "generally benign," while one analyst from Morningstar pointed out that the additional duties were "modest" in comparison to U.S. hikes on Chinese EVs last month.
On Wednesday, the EU said it would impose extra tariffs on Chinese EV players with a large footprint in Europe. BYD will be subject to additional tariffs of 17.4%, Geely will get an extra 20% duty. SAIC will have to pay additional duties of 38.1% – the highest among the three. This is on top of the standard 10% duty already imposed on imported EVs.
All three manufacturers were sampled in the EU probe, which is ongoing.
Other Chinese EV firms, which cooperated in the investigation but have not been sampled, would be subjected to 21% in extra tariffs while those which did not cooperate in the investigation would face 38.1% in additional duties, the commission said.
The EU said in a statement it has provisionally concluded that Chinese EV makers benefits from "unfair subsidization," which resulted in "threat of economic injury" to EU's EV industry.
"The move is modest compared with the stiff 100% tariffs on Chinese EV imports into the U.S., hiked from 25% last month, by the Joe Biden administration and the 25% provisional duties are in line