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<Research>M Stanley: CN New EV Subsidy Policy to Remove Uncertainty in Battery Industry in 2026
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While China's 2026 national subsidy policy will link subsidy amounts to car prices, an arrangement different from the fixed subsidy in 2025, the subsidy cap and covered car models remain largely unchanged, Morgan Stanley wrote in its research report. Accordingly, the recent market concerns about the sustainability of subsidies and a potential nosedive in electric passenger vehicle (PV) sales in 1Q26 have now been eliminated. From Morgan Stanley's perspective, the continuation of electric PV subsidies will ensure high single-digit growth for the electric vehicle battery industry in 2026, and the strong performance of electric trucks and energy storage systems will further enhance industry profitability. Should strong demand lead to a continuous rise in battery material prices, Morgan Stanley believes that CATL (03750.HK) will pass on cost pressures through pricing strategies. The broker named CATL's A-shares (300750.SZ) as its industry top pick with a rating of Overweight and a target price of RMB490. AAStocks Financial News |
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