The Zhitong Finance App learned that Morgan Stanley released a research report saying that following the EU's comments on restricting China's hybrid/plug-in hybrid (PHEV) exports from October 9 to 10, the two sides have yet to confirm specific provisions, and the October 15 European Council meeting will be the next key observation point. The bank believes that market access, rather than tariffs, has become a new battleground for the Chinese automobile industry; Europe is shifting from taxing Chinese cars to negotiating conditions for Chinese brands to enter its market.
The bank pointed out that clear rules are better than endless debates. Establishing a rules-based quota framework will provide Chinese electric vehicle manufacturers with the visibility they have always sought, make it easier for management to plan plant investments, pricing strategies and model cycles based on known terms, and help reduce the tail risks that drag down sector valuations. European automakers may have a four-year window instead of building a wall. Global growth will shift from exports to Europe to local production, from price-driven market share to profit-based positioning, and expand from a single export channel to multiple market layouts, which will benefit the rapid adjustment of Chinese electric vehicle leaders that already have a scale, balance sheet, and European manufacturing plans.
The bank believes that the quota framework is a typical voluntary restriction arrangement, and scarce rents tend to shift to exporters; for example, in Japan's situation in the US in the 1980s, restricted exporters often moved their product positions upward, pushing Chinese competition into a market segment with higher profits for European automakers. If the report indicates that the implementation on December 1 is true, there are still about seven weeks left for early shipment. From October to November, vehicles arriving at the port may still be registered in early 2027; the quota is measured by shipment, customs clearance, or registration, and the scale of early shipment will be determined.
According to the bank, the plant schedule favors pioneers: BYD shares (01211) and Chery Auto (09973) have or are expected to have European production capacity in 2026, and most of the growth during the quota period can be absorbed through local facilities; Geely Auto (00175) and SAIC Motor Group (600104.SH) /MG may have to wait until the 2027-2028 planned plants are put into operation, imports are limited by quotas; Xiaopeng Group-W (09868) and Zero Sports Auto (09863) are generally not within the hybrid framework (pure electric vehicle increase) Electric vehicles are taxed). European production lines have become scarce assets, and capital expenditure has replaced tariffs as the main threshold; shifting production and British policies are the main second-round risks, and the Middle East, Latin America, and ASEAN may see more aggressive pricing to offset Europe's short-term volume gap. The bank rated China's car and ride-sharing industry as “In-Line” (In-Line).