Chinese EV Stocks Surge, China-EU Negotiations on EV Tariffs
1min read The European Union and China have agreed to continue technical discussions on alternatives to tariffs on Chinese-made electric vehicles, according to statements from the European Commission and China's Ministry of Commerce on Friday. Potential alternatives under review include minimum price commitments from Chinese manufacturers or increased investments in Europe.
Chinese EV stocks rose broadly in U.S. trading today, with NIO, Li Auto, and Xpeng all posting gains.
Previously, the EU announced a roughly 35% tariff on Chinese-produced electric vehicles. In response, China launched investigations into European exports of dairy, pork, and brandy, and hinted at raising tariffs on large-engine vehicles from the EU.
China has advised its exporters to avoid separate agreements with the EU, seeking a unified approach for all manufacturers under one comprehensive framework, led by a Chinese trade association.
To bypass these tariffs, Chinese automakers are already considering establishing production facilities in Europe. State-owned GAC Group plans to open factories in Europe to lessen the impact of EU tariffs on Chinese EVs. Wei Haigang, GAC International's general manager, noted that European expansion is crucial to the company's growth strategy, with plans to bring a significant number of EVs to the European market next year.
Analysts said the EU duties were not enough to shut Chinese EVs out because some mainland carmakers would be able to digest the tariffs by taking full advantage of their production advantages. BYD has a cost advantage of 25% over traditional brands in the EU, according to UBS last year report.
