Among the famous Hong Kong stocks, NIO Inc. (HK:9866) and XPeng, Inc. (HK:9868) confirmed that they will continue to drive ahead in European markets despite the additional tariffs on Chinese-made electric vehicles (EVs). Both NIO and XPeng will face a weighted average import duty of 21%. Meanwhile, BYD Co. Limited (HK:1211) is hit by 17.4% of duty, Geely Automobile Holdings (HK:0175) faces 20%, and SAIC Motor Corp. has to pay 38.1%. These are on top of the current 10% tariff already imposed on these companies.
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As of writing, NIO shares lost 1.46%, while XPeng fell 3.5%. Other Chinese automobile companies also experienced declines, with Geely and Li Auto, Inc. (HK:2015) down 3.2% and 1.86%, respectively. BYD traded up 0.085%.
More About EU Tariffs
Earlier in June, the European Union (EU) announced its plans to impose tariffs of up to 38% on EVs imported from China due to the unfair advantage of subsidies. On Thursday, Europe confirmed these tariff hikes, prompting criticism from automakers.
Additionally, these tariffs will affect European companies manufacturing cars in China and U.S.-based Tesla (NASDAQ:TSLA), which operates a factory in Shanghai.
Chinese automakers have been aggressively expanding into Europe with competitively priced offerings, posing a threat to the region’s leading automakers. Overall, countries in the EU remain divided over the new tariffs.
NIO, XPeng Stay Committed
NIO stated that it will keep the pricing of its current models consistent in European markets for now. However, it also didn’t rule out a price hike in the future as a result of these tariffs. NIO also remains optimistic about reaching a solution with the EU before November, when these duties will take effect for the next five years. Currently, these tariffs are provisional, and negotiations between China and the EU are ongoing.
On the other hand, XPeng mentioned that it is actively evaluating the possibility of setting up local manufacturing operations in Europe to meet customer demand. It also assured its customers that there would be no price hikes due to these tariffs for orders placed before the tariffs take effect.
Is NIO a Buy Right Now?
As per the consensus among analysts on TipRanks, 9866 stock has been assigned a Moderate Buy rating based on one Buy and two Hold recommendations. The NIO share price target is HK$41.25, which implies an upside of 10% from the current price level.
Is XPeng a Good Stock to Buy?
On the contrary, 9868 stock has received a Hold rating on TipRanks based on one Buy and three Hold recommendations. The XPeng share price forecast is HK$35.51, which is 13.3% above the current level.
