EV Giant BYD’s Shares Soar

By Douglas A. McIntyre Published Jun 13, 6:40AM EDT

EV Giant BYD’s Shares Soar — © Leon Neal / Getty Images)

24/7 Insights

Shares of Chinese EV-maker BYD soared in Hong Kong despite tariffs in the European Union.

It was broadly believed that tariffs the European Union put on Chinese electric vehicles (EVs) would slow their sales considerably. Based on stock market activity, that is not true. The bull case for BYD, the largest EV manufacturer, is that the tariffs are not high enough to block the sales of its low-price, high-quality EVs.

According to CNBC, tariffs as high as 38% per vehicle needed to be increased even more to help EU manufacturers. The news site reports, “Chinese EV-maker BYD, the top gainer on the Hang Seng Index, jumped 8% during morning trade.” One Citi analyst pointed out that the tariffs were “generally benign.” A Morningstar analyst called the increases “modest.”

The lack of market reaction to the tariffs will likely show two things. One is that the local EU companies will face price points they cannot hit yet because their EVs remain comparatively expensive. The other is that China’s retaliation by putting tariffs on EU-made cars is less likely. Why start a trade war if your companies are not likely to be hurt by the EU tariff decision?

U.S. manufacturers will probably avoid the new trouble facing EU car companies, at least in their home market. The American tariffs are 100%. That means the price of Chinese EVs will be a hurdle to sales. Chinese car companies may enter North America through Mexico, and then the United States. The chess match over what Chinese EVs cost in America has not ended.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.