This article first appeared on GuruFocus.
BYD Company Limited (BYDDF) stock climbed after the European Commission said it may replace steep import tariffs with a minimum price system for electric vehicles.
Investors see the proposal as a potential margin boost for Chinese automakers selling into Europe. Shares of BYD jumped as much as 4.8% in Hong Kong trading.
Xpeng (NYSE:XPEV) rose about 5.3%, while SAIC Motor’s Shanghai-listed shares gained roughly 3.6%. Under the plan outlined Monday, Chinese exporters would submit minimum import prices, shipment limits, and future investment commitments in Europe.
Regulators would then review those proposals before deciding whether to drop existing tariffs. If approved, the framework would replace tariffs that currently reach as high as 35% on Chinese-made EVs.
Those levies also affect vehicles built in China by foreign brands, including Tesla (TSLA). The proposal signals a softer stance from European regulators as they balance domestic industry protection with affordability and supply concerns.
To Chinese EV manufacturers, a price floor may help ease uncertainty levels, ensure margins, and increase sales in major European markets as the world continues to increase in the level of competition.