China Autos & Shared Mobility: PHEV Duty Concerns

Research evidence excerpt

China Autos & Shared Mobility: PHEV Duty Concerns

Idea

June 22, 2026 09:29 AM GMT

Morgan Stanley Asia Limited+MChina Autos & Shared Mobility | Asia Pacific Tim Hsiao

Equity Analyst

PHEV Duty Concerns Tim.Hsiao@morganstanley.comMorgan Stanley Europe S.E., Madrid Branch+ +852 2848-1982

Javier Martinez de Olcoz Cerdan

Concerns over the EU potentially extending countervailing EquityJavier.Martinez.Olcoz@morganstanley.comAnalyst +34 9141-81289

duties to PHEVs have furthered the recent China auto sector

Morgan Stanley Asia Limited+

unwind. We think the sell-off prices in a worst-case scenario and Peggy Wang

think OEMs will adapt accordingly. ResearchPeggy.Pc.Wang@morganstanley.comAssociate +852 3963-3934

Potential duties on PHEV: Beyond the broader index correction, we think today's 3- Shelley Wang, CFA

5% decline across OEMs vs. HSI (-0.5%) is likely driven by concerns over potential Shelley.Wang@morganstanley.com +852 3963-0047

EU countervailing duties being imposed on Chinese-made PHEVs, after a June 19 Joey Xu, CFA

report in Handelsblatt (see here for details). The EU has not commented. Chinese- EquityJoey.Xu@morganstanley.comAnalyst +852 3963-0337

made BEVs have attracted EU duties since 2024, and OEMs have shifted their

European export mix accordingly. If duties were imposed on PHEVs, this could raise

costs and alter this strategic pivot. We note the sharpest auto share price declines

are concentrated in those with significant southbound floats, rather than those with

the highest direct PHEV exposure.

China Autos & Shared Mobility

PHEV shift after BEV duties: The EU's 2024 BEV duties (7.8-35.3% plus the 10% Asia Pacific

Industry View In-Line

base tariff) exempted PHEVs, prompting Chinese OEMs to redirect exports

accordingly.