German car companies are deepening declines today after yesterday’s comments from Ursula von der Leyen, who confirmed that the EU will launch an investigation to look into ‘unfair advantages’ of Chinese electric cars imported into the EU. The declines come just days after Chinese electric manufacturers attracted attention at the high-profile IAA auto show in Bavaria and demonstrated EV manufacturing and design advantages over European concerns.

• EV sales from China in Europe have grown strongly recently and their market share is around 8% with an estimated increase to as much as 15% in 2025. European regulators may take action against Chinese exports to maintain the market competitiveness of European brands and stop the industry from further collapse;
• It seems that while the decision seems ‘positive’ for European brands, it exposes a decline in their competitiveness in a global context and may spawn analogous responses from China, which is an important market for sales and technology transfer for many European brands, including BMW (BMW.DE)
• Yesterday, Vokswagen (VOW1.DE) announced plans to lay off several hundred employees at Europe’s largest electric car plant in Zwickau, citing weakening demand for electrics. Porsche (P911.DE) is losing the hardest among German companies today, with declines of more than 3% already.

The European automotive sector (SXAP Index) is trading under pressure today, with the benchmark pulled down mostly by German automakers. Source: Bloomberg Finance LPPorsche (P911.DE) share price declines stopped at the 61.8 Fibonacci retracmenet, at €96 per share. Since this year’s peaks, the price has already slipped more than 20%. Source: xStation5