In a move that could send shockwaves through the electric vehicle (EV) industry, the European Commission is scrutinizing the possibility of imposing tariffs on cheaper Chinese EV imports.

Tariff Talks Ignite Market Speculation

Analysts are wasting no time in predicting the potential winners and losers in the face of heightened protectionism, as Forbes reported Wednesday.

French automaker Renault SA (OTC:RNLSY) and Italian giant Stellantis N.V. (NYSE:STLA) could emerge as net winners if tariffs become a reality, thanks to reduced competition in the European market, as highlighted by Bernstein analysts.

On the flip side, premium German automakers such as BMW AG (OTC:BMWYY), Mercedes-Benz Group AG (OTC:MBGAF), and Porsche Automobile Holding SE (OTC:POAHY) face greater risks due to their substantial exposure to the Chinese market, according to a recent Morgan Stanley note.

The broker forecasted that approximately one-third of BMW and Porsche’s revenues are tied to China, compared to about one-fifth for Mercedes and roughly 3% for Renault, with Stellantis at 1%.

Also Read: Global EV Market Share Reaches 15% In 2023: Top Players, Vehicles And Companies Dominating Sector

The Chinese EV Industry’s Turbulence

China’s electric car industry is not exempt from the fallout. BYD Co. Ltd. (OTC:BYDDF) and SAIC find themselves at a significant disadvantage if tariffs are imposed, according to Bernstein. This uncertainty took a toll on BYD’s stock, which fell by 2.7% during a volatile trading session on Wednesday.

Other Chinese EV makers, including NIO Inc. (NASDAQ:NIO) and Li Group Inc. (NASDAQ:LI) were 3.9% and 0.2% lower, respectively.

While Europe represents a relatively small portion of Chinese original equipment manufacturers’ (OEMs) overseas exposure, it is the largest EV market outside of China. Any trade restrictions imposed by the EU could have a detrimental impact on market sentiment, as highlighted by Bernstein.

The Chinese Chamber of Commerce has not remained silent amid these developments. It has raised concerns about the EU’s investigation, asserting that the competitive advantage in the EV sector is not solely due to subsidies.

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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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