China Auto Industry Policy crosswinds: EU's defense vs. China's support

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China Auto Industry Policy crosswinds: EU's defense vs. China's support

Asia Pacific Equity Research

19 June 2026

China Auto Industry

Policy crosswinds: EU's defense vs. China's support

• EU tightens while China stimulates: Two China auto-related policy moves Head of APAC Auto Research

AC were discussed and announced on June 18: 1) In Europe, the EU summit has Nick Lai

not yet voted on new car tariffs on Chinese PHEV). It will keep the current anti- (65) 6801-3176

subsidy tariff on BEVs while signaling potential next-step tools (minimum nick.yc.lai@jpmorgan.com

price/volume caps) as BEV flows rotate towards PHEV. Our view remains that J.P. Morgan Securities Singapore Private

Chinese OEMs’ Europe share gains are structural, supported by a) value for Limited/Limited/ J.P.J.P. MorganMorgan SecuritiesBroking (Hong(AsiaKong)Pacific)

money product strategy and b) multiple powertrain choices. Localization will be Limited

key to mitigating LT tariffs or non-tariff barriers. 2) In China, the govt issued a Rebecca Wen

new round of rural subsidies to support domestic demand, although we think a (852) 2800-8505

lack of consumer confidence may limit upside potential; at this stage, we do not rebecca.y.wen@jpmorgan.com

anticipate a meaningful reversal of auto demand in 2H26. J.P. Morgan Securities (Asia Pacific) Limited/

• EU Summit (Jun 18–19, 2026): China autos / trade policy: There was no J.P. Morgan Broking (Hong Kong) Limited

new car tariff vote. The summit reframed the issue into an “overcapacity + Jiajie Shen, CFA

rebalancing” agenda and tasked the Commission with developing stronger (86-21) 6106 6352

jiajie.shen@jpmchase.com

defensive tools; the existing BEV countervailing duties (~30%) plus the

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