Takeaways

• In a recent note, we highlighted the uncertainties surrounding the adoption of electric vehicles in Western countries.
• In many publications, we have never doubted the inevitable rise of EVs to replace ICEs; today, the slowdown in growth is only a slowdown and not a question.
• In June 2024, the EU announced taxes on imports of Chinese electric vehicles which it found to benefit “heavily from unfair subsidies” and pose a “threat of economic injury” to EV producers in Europe.
• On 20 August 2024, the EU “disclosed to interested parties the draft decision to impose definitive countervailing duties on imports of BEVs from China”.
• Why is this announcement important and revealing of topics that we regularly discuss about European (and US) EV ecosystems?
• We believe that such an adjustment is only a reflection of the great weakness of the European ecosystem, not only on the downstream aspects of the value chain but also on all upstream aspects.
• We also suggest several elements that lead us to question the justification for the substantial valuation gap between Tesla and BYD, beyond the political and state governance risk in China.