China Automakers to Accelerate EU Production to Bypass Trade Barriers

Dow Jones10-14

0236 GMT - China's auto industry will see accelerated localized production in the European Union to circumvent trade barriers as vehicles produced within the EU aren't subject to import quotas for hybrid plug-ins and tariffs for full battery EVs, Daiwa analysts say in a note. The brokerage also foresees front-loading of exports for hybrid plug-ins and full EVs from 4Q26 to 1Q27 to avoid the impact of lower export-tax rebates. That would also lead to higher inventory levels for Chinese automakers in the EU, but not necessarily stronger competition as there is no rush to clear inventories, they add. In the long term, it would benefit Chinese automakers with EU production capability, such as BYD, Geely, XPeng, Leapmotor, Chery and SAIC.

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