On June 13th, Guolonghui reported that the interim tariffs disclosed by the European Commission were slightly lower than the market's previous expectation of 25%. The bank believes that some car companies with economies of scale and supply chain advantages are still competitive with tariffs of about 20%. However, smaller players such as NIO and XPENG, who rely on production in China and then transportation to enter the EU, have a greater impact. The bank predicts that localized production will become the main global strategy for Chinese car companies to enter the European market in the future. The purpose of the EU's tariffs is different from that of the United States. Its main goal is to reduce Chinese car companies' reliance on cost advantages to export low-cost electric vehicles from China to Europe. Therefore, it is believed that more Chinese car companies will build factories locally in Europe, which will help establish their own brand image, save transportation costs, and avoid potential tariff increases. The potential impact of EU tariffs can be controlled and it is difficult to impede the international expansion of Chinese car companies. BYD, Geely, and Great Wall Motors have completed their export layouts and overseas sales are expected to maintain growth.