Stocks of Chinese electric vehicle manufacturers significantly rose on Thursday morning subsequent to the European Union revealing increased tariffs of up to 38% on Chinese electric vehicles the day before. Hong Kong’s Hang Seng index surged 1.23% at the opening, predominantly fueled by gains in electric vehicle stocks.
The electric vehicle company BYD, which was the leading gainer on the HSI, leaped 8% during morning trading. Geely experienced an uptick of about 4%, while rivals Nio and Li Auto observed their shares climbing by 1.75% and 2.67% respectively. State-supported SAIC saw a decline of over 2%.
On Wednesday, the EU announced a surcharge on Chinese electric vehicle players with a significant presence in Europe. BYD will face additional tariffs of 17.4%, Geely 20%, and SAIC the highest at 38.1% – on top of the standard 10% duty already enforced on imported electric vehicles.
According to a statement by the EU, it provisionally concluded that Chinese electric vehicle makers enjoyed “unfair subsidization,” resulting in a “threat of economic injury” to the EU’s electric vehicle industry.
The additional tariffs were initiated after the EU commenced an investigation in October. The duties are currently provisional pending discussions with Chinese authorities. If no resolution is reached, they will be implemented from July 4. Definitive measures will be enacted within four months of the provisional duties’ imposition.
Joseph Webster, a senior fellow at the Atlantic Council’s Global Energy Center, stated that the EU appears to be cautioning Chinese state-backed SAIC to establish a manufacturing facility within Europe to avoid tariffs.
“Both BYD and Geely have significant investments in Europe,” noted Webster.
It was reported in December that BYD pledged to construct a new electric vehicle plant in Hungary after inaugurating an electric bus manufacturing facility in the country. Geely, owner of the Swedish car manufacturer Volvo, has begun shifting the production of certain vehicles from China to Belgium.
In reference to the EU’s decision, one analyst remarked that the tariff increment was “moderate” compared to the duties imposed on Chinese electric vehicles by the United States.
