Key Points
- China and the EU are reportedly close to eliminating tariffs on Chinese EV imports, with discussions focusing on setting a minimum price for EVs in the EU.
- The news surged shares of Chinese EV makers, including NIO Inc., Geely Automobile Holdings Ltd., Li Auto, BAIC Motor Corp Ltd., and BYD Co.
- The EU had earlier imposed tariffs of up to 45.3% on Chinese EVs, citing concerns over unfair subsidies.
- Chinese President Xi Jinping and German Chancellor Olaf Scholz recently discussed the issue at the G20 summit, emphasizing dialogue.
Chinese electric vehicle (EV) stocks rallied in Hong Kong trading on Monday amid reports of significant progress in resolving tariff disputes between China and the European Union (EU). According to Bernd Lange, chair of the European Parliament’s trade committee, Brussels and Beijing are close to an agreement that could eliminate tariffs on Chinese EV imports into the EU.
Speaking to German broadcaster n-tv, Lange revealed that the proposed solution might involve China setting a minimum price for EVs sold in the EU. “This would eliminate the distortion of competition through unfair subsidies, which is why the tariffs were originally introduced,” Lange stated without providing additional details.
The news fueled gains in EV stocks. Shares of NIO Inc. (HKG:9866) rose nearly 4.45% or 1.60 to 37.55 HKD, while Geely Automobile Holdings Ltd. (HKG:0175) saw a 1.25% or 0.16 increase to 13.00 HKD. Li Auto (HKG:2015) climbed 1.75% or 1.50 to 87.05, with BAIC Motor Corp Ltd. (HKG:1958) rose 1.75% or 0.04 to 2.33 HKD and BYD Co. (HKG:1211) advancing by 0.39% or 1.00 to 259.60 HKD.
The tariff issue has been a contentious point in EU-China relations. Earlier this year, the EU imposed up to 45.3% tariffs on Chinese-made EVs, citing unfair subsidies that distorted competition. Lange’s comments follow discussions between Chinese President Xi Jinping and German Chancellor Olaf Scholz during the G20 summit in Rio de Janeiro. President Xi highlighted the global significance of resolving EV tariffs and reiterated China’s commitment to constructive dialogue.
Although neither the European Commission nor China’s Ministry of Commerce has officially confirmed the developments, both sides have indicated that technical progress has been made. Reports suggest that discussions are ongoing, with key details of the potential agreement still under wraps.
If finalized, the resolution could reshape the competitive landscape of the European EV market. By committing to a minimum price, China could address EU concerns about undercutting local manufacturers while maintaining access to a vital market.
Market watchers are optimistic that the deal will bolster trade relations and reduce tensions between the two economic powerhouses. Investors in Chinese EV firms closely monitor the situation, as eliminating tariffs could significantly boost sales in the lucrative European market.
