Investing.com– SAIC Motor Corp Ltd (SS:) was slapped with substantially higher-than-expected provisional import tariffs by the European Union this week, which Morgan Stanley analysts said could serve as a “major setback” for the Chinese automaker.
SAIC was hit with a 38% import tariff on all new energy vehicle (NEV) exports to the EU, the highest among its peers. SAIC had earlier projected tariffs of 20%.
The tariffs were announced earlier this week, and were imposed amid concerns among EU lawmakers over increased competition for local automakers from Chinese EV makers.
The duties will go into effect from July 4, although a final decision over their imposition and scale will only be made in November.
MS analysts said that while the decision presented a major setback for SAIC, they still expected the firm to introduce measures to offset their impact. The firm exported between 80,000 to 100,000 NEV units to the EU in 2023, amid growing demand for its MG brand.
MS analysts also said that the company had space till November to defend itself.
Chinese media reports said SAIC was “deeply disappointed” by the tariffs, and that negotiating with the EU may prove difficult for a single company.
SAIC’s Shanghai shares lost 1.6% on Thursday. MS is Overweight on the stock with a price target of 17.50 yuan, representing an upside of nearly 14% from current levels.
Several of SAIC’s Chinese peers were slapped with import tariffs ranging between 17% to 38%. BYD (SZ:) saw the lowest tariffs amongst its peers.
