In a major setback to Chinese automakers, Reuters reported on Friday that the European Commission will investigate whether it is necessary to impose tariffs on them to protect European automakers from cheaper Chinese EV imports. Chinese EV majors like Li Auto (LI), XPeng (XPEV), and NIO (NIO) were trending lower on Friday following the news.
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According to the report, the EU inspectors will visit the plants of Chinese automakers like BYD (BYDDY), Geely (GELYF), and SAIC. However, the investigators will not visit the plants of non-Chinese brands produced in China, like Tesla (TSLA).
This probe was launched in October last year and is expected to last 13 months. China has opposed the investigation, resulting in strained relations between the EU and Beijing. According to Reuters, the investigation is in the “initiation stage,” with verification visits scheduled by April 11.
The share of Chinese EVs in the European market, currently at 8%, is steadily increasing and is projected to reach 15% by 2025. These EVs are often priced 20% lower than their EU-made counterparts.
What Companies are in KARS ETF?
For investors interested in getting exposure to the EV sector, the KraneShares Electric Vehicles & Future Mobility Index ETF (KARS) is a viable option, even as the KARS ETF has slid by more than 20% over the past year. The ETF holds EV majors like Tesla, Aptiv (APTV), and Rivian (RIVN).
