Classification of NuWays AG to EBRO MOTORS GROUP EV SA

Company Name:	EBRO MOTORS GROUP EV SA
ISIN:	ES0105725008
Reason for the research:	Update
Recommendation:	BUY
Target price:	EUR 14.50
Target price on sight of:	12 months
Last rating change:
Analyst:	Jorge Gonzalez

EU hybrid import quota could accelerate Chery contribution

New details on the EU–China hybrid vehicle agreement could materially strengthen EBRO's investment case. Following Friday's announcement of an agreement to restrict Chinese hybrid vehicle exports to the EU, The Guardian now reports that Brussels plans to introduce an annual quota of 350k China-built hybrids from December 2026. Crucially, EU-assembled vehicles would reportedly be exempt, potentially increasing the strategic value of EBRO's Barcelona factory for Chery.

• A significant restriction on Chinese hybrid imports. The EU reportedly intends to use WTO safeguard measures to impose an initial annual quota of 350k HEV/PHEV vehicles for four years, with the cap increasing by 6% annually. This represents c. 45% of the annualised 8M26 EU registrations of BYD, SAIC, Chery and Leapmotor (c. 780k vehicles), excluding EBRO and Volvo. While this comparison covers all powertrains, the Commission reportedly expects c. 800k China-built hybrid imports in 2026, implying a reduction of more than 50% against the current run-rate.
• Barcelona's strategic relevance could increase substantially. According to The Guardian, vehicles assembled within the EU, including those expected from BYD's Hungarian operations and future production in Spain, would be exempt from the quota. If confirmed, this could materially strengthen Chery's incentive to allocate additional production to EBRO Factory. With an estimated annual capacity of c. 130k vehicles across its existing lines at three shifts, Barcelona offers substantial headroom relative to the c. 32k EBRO-branded vehicles expected to be produced in 2026 (eNuW).
• Potential for significantly higher Chery volumes, albeit with execution constraints. Our estimates currently assume Chery assembly volumes rising from c. 6k initially to c. 40k at medium-term maturity, equivalent to only c. 23% of Chery's annualised 8M26 EU registrations. A more restrictive import environment could support substantially higher allocations and stronger fixed-cost absorption. However, both Chery and EBRO Factory would require time to adapt production, supply chains and manufacturing processes, while the final quota terms, applicable exemptions and Chery's allocation decisions remain unconfirmed.

Our valuation sensitivity highlights substantial upside from higher Chery production volumes. For instance, the assembly of more than 70k Chery vehicles annually could already support a valuation of over € 17 per share. While we consider it premature to incorporate additional volumes into our forecasts until the reported regulatory details are officially confirmed, the latest developments reinforce the investment case outlined in our initiation report published yesterday (link here). EBRO combines the heritage of a historic Spanish automotive brand and an established manufacturing base in Barcelona with Chery's technology and procurement scale. Strong initial commercial traction, reflected in a c. 2.2% market share in Spain in only its second year, provides a solid foundation for further growth through portfolio expansion, access to corporate fleets and internationalisation. Meanwhile, additional Chery assembly volumes offer substantial potential to improve plant utilisation, fixed-cost absorption and profitability. We therefore maintain our estimates, BUY recommendation and € 14.50 PT, with further scenario analysis on the following page.

You can download the research here: ebro-motors-group-ev-sa-2026-10-13-update-en-533de
For additional information visit our website: https://www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Offenlegung möglicher Interessenkonflikte nach § 85 WpHG beim oben analysierten Unternehmen befindet sich in der vollständigen Analyse.
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