Thailand plans to raise the excise tax on imported battery electric vehicles and range-extended electric vehicles that meet certain conditions to 35% from 2027. JPMorgan believes the industry impact from Thailand alone is manageable, but the accumulation of overseas trade barriers will restrain export growth, while localization could also weigh on short-term margins.
GAC, SAIC, Changan and BAIC all reported third-quarter results below market expectations. JPMorgan believes their own brands cannot yet offset falling joint venture profits and expects a slow recovery in 2027.
Nomura estimates that domestic auto sales in China fell about 25% year over year in October 2026. BYD and XPeng grew on exports and new models, while deliveries weakened at NIO and Li Auto; taxes, costs and export requirements pose further challenges for the industry.
Morgan Stanley expects fourth-quarter orders to rise 10%–15% quarter on quarter, but sees no significant year-end sales push. With domestic demand weak and the boost from subsidies fading, export scale and overseas execution have become key factors differentiating automakers.
Europe’s accelerating electrification is driving a continued rise in Chinese brands’ share of the new-energy vehicle market; JPMorgan also expects lower export tax rebates and European import restrictions to weigh on automakers’ profits and sales in 2027.
