Chinese electric vehicle stocks were broadly weaker on Monday, with BYD at the forefront of losses after reports surfaced that the European Commission plans to consider extra tariffs on cars imported from China.
BYD fell by more than 4 percent, sliding to a level described as near a two-year low. Other Mainland and Hong Kong-listed EV makers also retreated in trading in Hong Kong - NIO, Leapmotor, Li Auto, and Chery each lost between about 3 percent and 4.1 percent.
The market moves followed a report in the Handelsblatt newspaper that said the European Commission is preparing to introduce countervailing duties on Chinese hybrid vehicles. According to the report, the proposed increase in tariffs could be enacted as soon as a majority of EU member states vote in favor of the measure.
Concerns among EU members were reported to include the bloc's large trade deficit with China and its significant dependence on China for rare earths and other critical materials. Those concerns are cited as part of the rationale behind the Commission's consideration of additional trade measures.
The Handelsblatt piece identified targeted manufacturers that could face added duties, including BYD, Chery, and SAIC. Among those named, BYD appears particularly exposed because hybrids account for a substantial portion of its sales into the European market.
The report noted that BYD has been substantially increasing deliveries in the EU over the past year. That expansion is described as part of a broader strategic push by many Chinese automakers to grow overseas sales, in part to relieve pressure from intensifying competition in the domestic Chinese market.
Market participants will be watching for signs of formal action from the European Commission and for the degree of support among EU member states, since adoption of any countervailing duties depends on member approval. Until there is an official decision, the situation presents a clear source of near-term uncertainty for Chinese automakers that have been expanding in Europe.
Market snapshot - BYD was the heaviest decliner in the group, falling over 4 percent to a near two-year low. NIO, Leapmotor, Li Auto, and Chery each dropped roughly 3 percent to 4.1 percent in Hong Kong trade.