Chinese electric vehicle (EV) giants BYD Co. Limited (HK:1211), Geely Automobile Holdings Ltd. (HK:0175), and SAIC Motor Corp. have come under the European Union’s (EU) investigators’ lens as part of an ongoing probe to assess the imposition of punitive tariffs for protecting European EV manufacturers.
Chinese EVs Under Investigation
The investigation commenced in October 2023 and is slated to span 13 months. The main motive is to ascertain whether Chinese-made EVs, which benefit from state subsidies, gain an unfair advantage in terms of pricing compared to European automakers.
The commission is scheduled to conduct its visits at the premises of the Chinese automakers during the first two months of 2024. BYD’s stock was trading down by 1.71%, while Geely’s shares lost 1.24% at the time of writing today.
Based in China, BYD and Geely are leading automobile manufacturers. SAIC Motor, on the other hand, is a state-owned Chinese automotive manufacturer.
Europower Shift: Chinese EVs Seek Growth in Europe
Over the last few years, China has emerged as a significant contender in the global EV market. Most Chinese EV companies are shifting their focus toward international expansion to reduce their dependency on the home market.
This has prompted increasing concerns from both European automakers and governments alike. The rising market shares of Chinese EVs and their highly competitive pricing are contributing to these apprehensions. According to the European Commission, China’s market share of EVs sold in Europe has increased to 8% in 2023 and could reach 15% by 2025. These models typically sell for 20% less than those manufactured within the EU.
Is BYD a Good Stock to Buy Now?
According to TipRanks, 1211 stock has received a Strong Buy consensus rating, backed by six Buys and one Hold recommendation. The BYD Co. share price target is HK$322.92, which implies an upside of 53% from the current trading level.
