Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

China EV Stocks Gain on New Stimulus Plan to Drive Car Demand

Published 07/07/2022, 07:06 PM
Updated 07/07/2022, 07:06 PM
©  Reuters

© Reuters

By Senad Karaahmetovic

China’s Ministry of Commerce announced Thursday a set of new measures to drive car demand, including a potential tax break for electric vehicles (EVs) and plans to make additional charging stations, as well as reduced charging fees.

The announcement was part of a joint statement between the Ministry of Commerce and 16 other departments. Shares of local automakers including Geely Automobile Holdings Ltd (HK:0175) (OTC:GELYY) and Great Wall Motor Company Ltd (HK:2333) (OTC:GWLLY) both jumped 6%.

Shares of NIO Inc (HK:9866) (NYSE:NIO) and Xpeng Inc (HK:9868) (NYSE:XPEV) (XPEV) are up 2.3% and 3.9%, respectively, while Li Auto Inc (HK:2015)  (NASDAQ:LI) stock is up 1.3%.

The move comes after a challenging period for China’s car market, the largest in the world, as the government reopens Shanghai and several other cities following strict coronavirus lockdowns.

Last month, the Chinese authorities reduced the car purchase tax to 5% for vehicles that cost less than 300,000 yuan ($45,000) and have 2.0-liter or smaller engines.

Additionally, those who bought certain fully and partly electric cars were not obliged to pay the purchase tax since 2014. The government initially wanted to restore the tax but that plan may now be canceled, the ministry said.

The decision to cut the car purchase tax significantly boosted the market rebound in June, with passenger car sales soaring 22% to 1.9 million units in that month, compared to the same period last year.

Furthermore, EV sales jumped 130% to 546,000 units in June, representing almost 30% of all vehicle sales. Sales of the local EV market leader BYD (HK:1211) (OTC:BYDDY) more than tripled to 134,000 units.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.