US Treasury Secretary Yellen's focus on addressing Chinese exports impacts solar, EV, and battery makers.
From The Edge Communications Sdn. Bhd.: 2024-04-05 06:19:00
US Treasury Secretary Janet Yellen’s focus on addressing the threat of cheap Chinese exports is impacting solar panel, electric car, and battery makers in China. Major producers like Longi Green Energy Technology Co and BYD Co are underperforming due to overcapacity and domestic competition, leading to concerns about potential tariffs. Concerns about geopolitical risks like tariffs are affecting the equity risk premium in China, according to experts.
In the solar-module sector, Chinese manufacturers are facing record-low prices and increased scrutiny, resulting in stock declines. China’s dominance in global solar cell production poses a threat to US factory plans despite incentives. Speculation about the Chinese government’s action to maintain industry capacity growth is growing, prompting Yellen to consider ways to protect the US clean energy sectors.
China’s electric vehicle exports have surged, with the European Union being the primary destination. However, high tariffs and local content requirements hinder exports to the US. The Biden administration is offering tax credits for US-made EVs, while Chinese automakers are focusing on overseas expansion to address domestic market saturation. Companies like BYD are facing challenges in growth amid domestic price wars and slowing market growth.
The case for duties on lithium batteries may be challenging as China dominates world production capacity in lithium-ion batteries. China’s Contemporary Amperex Technology Co has seen stock growth this year, while peers like Eve Energy Co and Gotion High-tech Co have experienced declines. Some argue that while there may be overcapacity in solar and batteries, Chinese EV makers remain efficient. Goldman Sachs economists anticipate potential risks from tariffs and global growth slowdown in the future.
Read more at The Edge Communications Sdn. Bhd.: A trader’s guide to Chinese stocks in focus as Yellen visits