{"id":196326,"date":"2023-09-15T11:45:00","date_gmt":"2023-09-15T15:45:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=196326"},"modified":"2023-09-15T13:02:16","modified_gmt":"2023-09-15T17:02:16","slug":"grinding-gears","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/grinding-gears\/","title":{"rendered":"Grinding Gears"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-what-s-going-on\">What&#8217;s going on?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">China\u2019s accelerating pace in the electric vehicle (EV) world has&nbsp;<a href=\"https:\/\/www.bnnbloomberg.ca\/china-paper-warns-europe-of-retaliation-after-ev-subsidies-probe-1.1971178\">triggered<\/a>&nbsp;a little road rage from the EU.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-does-this-mean\">What does this mean?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">China\u2019s been looking to growth in EVs and green tech to offset its wobbly property sector. And so far, it\u2019s working out. Just peek at Europe: Chinese EV brands are zipping through the market, and look set to claim 15% of Europe\u2019s EV pie in a mere two years. But not everyone\u2019s happy about that. The EU, for one, is crying foul, complaining that these affordable Chinese rides are only kept so cheap by hefty state subsidies. But China\u2019s not one to be backseat-driven, and it responded to the bloc\u2019s investigation pretty predictably: by claiming that its lead is down to nothing but innovation and efficiency. So watch this space \u2013 the EU\u2019s probe could lead to tariffs on Chinese EVs, much like those already in force stateside.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-why-should-i-care\">Why should I care?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><strong><em>For markets:&nbsp;<\/em><\/strong><em>Good news for everyone else.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Chinese EV giants like BYD and Nio, eager to conquer Europe, didn\u2019t anticipate this kind of speed bump \u2013 and this sudden disruption to their expansion plans saw their stocks take a dip. For lagging European automakers, that could provide a welcome chance to catch their breath. And as for the market leader, Tesla \u2013 well, the firm\u2019s probably relishing the reduced threat of clashing bumpers with its arch nemesis BYD on European turf.<br><br><strong><em>The bigger picture:&nbsp;<\/em><\/strong><em>Equal and opposite reaction.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This EU-China tiff is the latest episode in the global trade drama. But it\u2019s a risky game. Higher EV prices could slow adoption and slam the brakes on Europe\u2019s green transition. And if China hits back, then Europe\u2019s car giants could feel the pinch \u2013 especially since China holds the keys to the EV battery kingdom. Plus, less competition might also mean less innovation in the longer run, and that\u2019s a road no one wants to take.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8212;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Originally Posted September 14, 2023 &#8211; <a href=\"https:\/\/go.finimize.com\/wp\/news\/grinding-gears\/\">Grinding Gears<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>China\u2019s accelerating pace in the electric vehicle (EV) world has\u00a0triggered\u00a0a little road rage from the EU.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[4,5,18,8,9,22,26,3],"tags":[196,313,2015],"contributors-categories":[13597],"class_list":["post-196326","post","type-post","status-publish","format-standard","category-asia","category-europe-middle-east-africa","category-macro","category-region","category-securities","category-stocks","category-text-articles","category-traders-insight","tag-asia","tag-europe","tag-ev","contributors-categories-finimize"],"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Grinding Gears | Traders&#039; 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