Chinese Autos: The second shoe has dropped — Export VAT rebate cut confirmed. Clearing event ahead?

Chinese autos export VAT rebate cut from 13% to 9% confirmed, effective April 1, 2027. After the Hong Kong market close today, China's Ministry of Finance and State Taxation Administration announced that the export VAT rebate for new energy vehicles (NEVs), including BEVs and PHEVs, will be reduced from 13% to 9%. By overseas NEV sales exposure, BYD ranks highest at c.45%, followed by Chery (36%), SAIC (27%), and Geely and Leapmotor (24%); actual exposure is likely lower as these include vehicles produced at overseas plants, and BYD's effective exposure could fall below 40% as production localizes. We do not expect OEMs to meaningfully raise prices given intense competition;