Chinese electric vehicle stocks gained in early action on Monday after President Donald Trump claimed trade relations with the U.S. and China will all be fine in a quick reversal of Friday’s warning of a “massive” increase of U.S. tariffs.
In general, Chinese EV stocks are highly sensitive to concerns about a trade war between the U.S. and China due to the threat of export restrictions, high tariffs, and rising trade barriers, which could all threaten the profitability and growth prospects of EV firms in key global markets. Even though the U.S. is not the biggest destination for Chinese EV exports, U.S. policy changes have a global impact and can influence Europe and other regions to adopt similar measures. Meanwhile, U.S. automakers such as Tesla (TSLA), General Motors (GM), and Ford Motor (F) are active in selling EVs in China and are considered at risk if a hostile trade war broke out.
NIO (NYSE:NIO) broke 4.4% higher in premarket trading on Monday, while XPeng (NYSE:XPEV) gained 2.9%, ZEEK Intelligent (NYSE:ZK) rose 1.1%, and Li Auto (LI) was up 0.7%. Tesla (TSLA) was up 1.9% in the early session, and Faraday Future Intelligent Electric (FFAI) was up 3.1%. BYD Company (OTCPK:BYDDF) fell earlier in the day in Hong Kong trading as it was playing catch-up with the Friday developments.