CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

EU considers sanctions on Chinese EV manufacturers ⚡

18:37 13 September 2023

Chinese electric car manufacturers today are performing poorly and recording declines as the EU looks to halt imports of cheaper cars from China, fearing a deepening crisis in European industry and a decline in the competitiveness of European companies. EU regulators have already launched an investigation amid fears of a flood of cheap 'electrics,' potentially creating a retaliatory reaction from China. As a result, shares of European car companies such as Volkswagen (VOW1.DE) and BMW (BMW.DE) also recorded mixed reactions today.The situation looks like a continuation of a certain 'geopolitical' puzzle in which the 'West' is limiting China's economic potential.

  • According to Ursula von Der Leyen's comments, China artificially lowers the price of cars through state subsidies and then exports them, creating unfair competitive advantages in the market. 
  • According to the data, the share of Chinese electric vehicle brands in the EU last year was 8%. With Chinese models about 20% cheaper than domestic ones, it is expected that by 2025 they could control 15% of the EV market.

In practice, of course, Europe doesn't want China to prove too attractive to consumers again, which would hit the sales and financial health of many automotive giants - perhaps even escalating to a wave of layoffs (a similar situation happened about 10 years ago when Chinese solar panels made European manufacturers uncompetitive).

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The share of Chinese EV sales is increasing year by year. Source: Bloomberg Finance L.P.

  • Following von der Leyen's announcement, European auto sector stocks initially rose on the prospect of a state umbrella, but then gave back gains. The potential sell-off was fueled by concerns about the reaction of China and European automakers, which have stronger exposure to the country.

Europe's largest automakers said earlier this month that they were concerned about the competitive threat posed by new Chinese companies as the auto industry transitions to a significant EV presence. Source: Bloomberg Finance L.P.

 The EV industry appears to be the future of the auto industry, so the battle for market share is likely to intensify. Source: Bloomberg Finance L.P.

Xpeng (XPEV.US) shares continue their upward trend - however, a potential saucer formation has been challenged by a second lower peak after a big rise in July. Source: xStation5

This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.

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