Volume impact of US tariffs on China EV makers should be limited - Morgan Stanley
Although the potential 100% US tariff hike on Chinese electric vehicles appears aggressive, its direct impact on China's EV exports “should be limited,” Morgan Stanley analysts said in a Monday note.
In the meantime, key questions remain about the effect on Chinese EV/components imported from Mexico and whether the EU and NAFTA regions will follow the US with similar tariffs. Notably, Mexico is China's second-largest vehicle export destination, with 100,000 units shipped in Q1 2024, according to China Customs.
Although ASEAN, LATAM, and Middle East markets appear more favorable for Chinese EV exports, Chinese OEMs and parts makers are likely to increase overseas capital expenditure in the next 2-3 years, analysts noted, a move aimed at localizing production abroad to hedge against further protectionism.
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