Guotai Haitong continues to be optimistic about the demand for new energy in Europe, and Chinese new energy companies are not afraid of trade frictions.

Guotai Haitong released a research report stating that the updating of power equipment in Europe and the increase in new energy will create strong and sustained demand for related equipment. Chinese companies continue to deepen their supply-side cultivation, with the necessary technology and production capacity, without worrying about trade frictions. They continue to be optimistic about the demand for new electricity in Europe and maintain a "buy" rating for the industry. The impact of European trade risks on the new electricity sector is limited, and overselling may present an opportunity for positioning. Guotai Haitong's main points are as follows: The domestic lithium battery industry relies on domestic capacity and new capacity in Europe to support the development of the electric vehicle industry in Europe. According to the bank's statistics, the proportion of European business for mainstream battery factories in China is between 5% and 20%, and the overall scale is controllable. The trade risk between Europe and China is aimed at reducing the gap in manufacturing. Contemporary Amperex Technology's European base was the first to land and start production, while overseas factories for Eve Energy Co., Ltd. and CALB are expected to be completed around 2027. If the EU subsequently introduces tariff restrictions, the impact on battery companies that have completed their local capacity layout in Europe will be relatively weak. European companies are relatively weak in the field of batteries, with no European companies in the top ten global power and energy battery manufacturer list for 2025. The current industry structure is dominated by Chinese battery companies, supplemented by a small number of Japanese and Korean manufacturers. The mature and complete battery industry chain in China strongly supports the development of the European automobile industry, significantly speeding up the research and development process for new vehicles by local car manufacturers. The third quarter is the peak season for batteries, and it is expected that the performance of the lithium battery sector in the second quarter will be good. Due to the impact of European trade risks, there may be positioning opportunities due to overselling. Overseas power equipment demand is rising, with a tight supply, and Chinese companies playing an increasingly important role. Europe's power grid has entered a long-term investment cycle, with increasing electricity demand, aging existing equipment, large-scale integration of new energy sources, and growth in new types of loads. By 2030, the investment demand for the power grid will reach 584 billion euros, and by 2040, it will exceed 1.2 trillion euros. Currently, the delivery cycle for the top-tier overseas equipment suppliers has extended to 4-5 years, leading to a continued tight supply. Chinese exports of transformers and switchgear to Europe have grown by double digits year-on-year. With cost, delivery, and product advantages, local power equipment companies are seizing broad opportunities to expand overseas. The push for energy self-sufficiency and transition in Europe is boosting the prosperity of solar and energy storage. By 2026, China's exports of solar modules to Europe will continue to grow, and there is a significant shortage of local solar capacity in Europe, making it difficult to break away from supply chain dependency on China in the short term. At the same time, household storage and large-scale energy storage in Europe are increasing, leading to a significant increase in exports of energy storage and inverters. Although the EU has introduced policies such as local capacity requirements and financing restrictions, the overall impact is limited, and domestic companies can mitigate risks through localized cooperation. In addition, the export market structure for solar and storage from China continues to improve, with impressive growth in the Asia-Pacific, Africa, and other emerging markets, further expanding overseas deployment opportunities. Risk warning: risks related to raw material supply; risks related to industry policies.