Morgan Stanley: New Vehicle Subsidy Policy Adjustment Benefits Premium Models, Favors Li Auto-W (02015), NIO-SW (09866), and Zhongsheng Holdings (00881)

Morgan Stanley released a research report stating that the National Development and Reform Commission's announcement yesterday (the 30th) to extend the new vehicle subsidy policy into next year aligns with the bank's expectations. The subsidies are set at RMB 20,000 for new energy vehicles and RMB 15,000 for internal combustion engine vehicles, with local governments offering additional subsidies of RMB 15,000 and RMB 13,000, respectively, for replacing old vehicles with new ones. The bank indicated that the new policy considers vehicle prices, implying that subsidies for cars priced below RMB 150,000 have decreased year-on-year. Vehicles priced between RMB 150,000 and RMB 200,000 can maximize the benefits, while premium models remain unaffected by the subsidy policy adjustments. Among automakers, the bank expresses a preference for those offering premium models, such as Li Auto-W (02015), NIO-SW (09866), and automakers collaborating with Huawei. The policy is also seen as favorable for premium brand dealers like Zhongsheng Holdings (00881). Mass-market brands are expected to face greater headwinds due to reduced subsidies and a 5% increase in the purchase tax for new energy vehicles. Regarding suppliers, the bank believes that companies like Xingyu Holdings (601799.SH), Desay SV Automotive (002920.SZ), and Huayang Group (002906.SZ) will benefit from their exposure to the domestic market.