China Automobiles: Expert call takeaway: Expect positive domestic retail growth in 2027 amidst policy headwinds

We hosted an expert call on China Auto policies implementation on Oct 15, where the expert shared views and insights regarding 1) potential EU safeguard measures for hybrids, 2) export tax rebate reductions signalling a domestic government policy shift, 3) expectation of emerging regulatory risks and industry consolidation, 4) while remaining positive on 2027 volumes (the expert expects 2%-3% yoy retail growth and 20% yoy export growth). Key takeaways: the EU is likely to impose four-year safeguard measures on hybrid vehicles, capping Chinese hybrid volumes at approximately 300k-400k units annually; export tax rebates for batteries decline from 13% to 0% between 2024 and 2027 (0% starting January 2027), implying around 4% of FOB value loss for exporters;