Mikkel Rosenvold
5 weeks ago

EU's New Tariffs on Chinese EVs Hit Tesla and BYD Stocks!

Tesla (TSLA) and BYD (1211) Stocks Plummet After EU Tariff Announcement

In a shocking move, the European Union (EU) has slapped new tariffs on imported Chinese electric vehicles (EVs), sending shockwaves through the stock market. Tesla and BYD saw their shares tumble early Wednesday following the announcement, raising concerns among investors and EV enthusiasts alike.

Unfair Competition or Protectionism?

The EU claims that Chinese EVs benefit from unfair subsidies, giving them an edge over European competitors. To level the playing field, the EU is imposing a whopping 38% tax on non-cooperative Chinese automakers and a 21% fee on others. Specifically, BYD faces a 17% tariff, while Geely (175) will be hit with a 20% tax. The highest penalty of 38% is reserved for SAIC. Tesla, although an American company, might not escape unscathed due to its Shanghai factory exports.

Tesla's Potential Tariff Woes

Tesla’s situation is particularly precarious. If the EU imposes a tariff on Tesla, it could significantly impact the company’s profitability. Tesla benefits from lower labor costs in China, but this advantage might diminish if tariffs are applied. Jeff Chung, a Citi analyst, noted that Chinese EV makers could still profit in Europe with a 30% tariff, albeit with tighter margins.

Global Repercussions

The EU’s decision is part of a broader trend of countries protecting their local industries from the flood of Chinese EVs. Turkey recently announced a 40% tariff, and the U.S. quadrupled its tariffs on Chinese car imports to a staggering 100%. Despite these hurdles, China remains the world’s top car exporter, with 3.8 million passenger vehicles sold outside its borders in 2023. Experts predict this number could double by 2029.

Market Reactions

Following the tariff announcement, BYD shares dropped 3.7% in overseas trading. U.S.-listed shares of NIO and Li Auto also took a hit, falling 3.6% and 2.3%, respectively. Even Tesla stock dipped slightly by 0.2%, showing the market’s nervousness.

What’s Next for EVs?

As countries like the EU and the U.S. implement tougher tariffs, the global EV market is bracing for more turbulence. Ford Motor CEO Jim Farley emphasized the need for fair competition, highlighting China’s massive car-making capacity compared to its domestic market size.

Stay Tuned!

For more updates on this developing story and other breaking news in the world of finance and macroeconomics, stay tuned to Macro Ticker. Don’t miss out on the latest trends and insights!

Disclaimer

The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

4 weeks ago Analysis: New Debate Rules Favor Biden New rules announced for the June 27th debate between Joe Biden and Donald Trump serves the President well.
4 weeks ago StanChart Becomes Among the First Global Banks to Launch Spot Crypto Trading StanChart breaks new ground by launching spot trading for Bitcoin and Ether, leading the charge among global banks in the cryptocurrency space.
4 weeks ago Crypto, Currently: June 21, 2024 - Market Bears Down on Major Cryptos Daily update on the five cryptocurrencies, we consider the most interesting right now.
4 weeks ago FX Daily: June 21, 2024 – Forex Market Update Daily update from the foreign exchange markets.
4 weeks ago Amazon Plans To Make Largest Reduction of Plastic Packaging in North America To Date Amazon's response to mounting criticism over its plastic waste with a new reduction plan.
4 weeks ago Ex-OpenAI Chief Scientist Ilya Sutskever Launches New Company Amid Criticism of ChatGPT Parent's Board Appointments Ilya Sutskever, former chief scientist at OpenAI, has co-founded a new company, Safe Superintelligence Inc., amidst ongoing scrutiny of OpenAI’s recent board appointments.
4 weeks ago FX Daily: June 20, 2024 - Mixed Movements in Global Currency Markets Daily update from the foreign exchange markets.