EU imposes up to 38% additional tariffs on Chinese EV stocks, causing surge in prices.

• On Thursday morning, shares of Chinese EV manufacturers experienced a rise, following the EU's imposition of tariffs of up to 38% on Chinese EVs the previous day.
• Vincent Sun, equity analyst at Morningstar, stated in a Wednesday note that the move is modest compared to the stiff 100% tariffs on Chinese EV imports into the U.S., which were increased from 25% last month.
• According to Joseph Webster, senior fellow at the Atlantic Council's Global Energy Center, the EU appears to be urging SAIC to establish manufacturing operations within Europe.

On Thursday morning, shares of Chinese electric vehicle manufacturers experienced a rise, following the European Union's announcement of increased tariffs of up to 38% on Chinese EVs the previous day.

At the open, EV stocks propelled Hong Kong's stock market to surge by 1.23%.

The EV company, who was the top gainer on the HSI, jumped 8% during morning trade. Its counterparts saw their shares climb by 1.75% and 2.67% respectively, while the state-backed company was down more than 2%.

In contrast to the significant U.S. tariffs on Chinese electric vehicles, the EU's tariffs were considered "modest."

The EU announced on Wednesday that it would impose additional tariffs on Chinese EV players with a significant presence in Europe. BYD will face an extra 17.4% duty, Geely will receive a 20% additional tariff, and SAIC will have to pay an extra 38.1% duty - the highest among the three. These tariffs will be added to the standard 10% duty already imposed on imported EVs.

All three manufacturers were sampled in the EU probe, which is ongoing.

The commission stated that other Chinese EV firms that cooperated in the investigation but were not sampled would be subjected to an additional 21% in tariffs, while those that did not cooperate would face an additional 38.1% in duties.

The EU has provisionally concluded that Chinese EV makers receive unfair subsidization, which poses a threat to the EU's EV industry.

According to Vincent Sun, equity analyst at Morningstar, in a Wednesday note, the move is modest compared with the stiff 100% tariffs on Chinese EV imports into the U.S., hiked from 25% last month, by the Joe Biden administration and the 25% provisional duties are in line with market expectations of 20%-25%, in our view.

The EU launched a probe in October and is currently considering imposing provisional duties on Chinese goods. If discussions with Chinese authorities do not result in a resolution, the duties will be introduced from July 4. The bloc has stated that definitive measures will be placed within four months of the imposition of provisional duties.

According to Joseph Webster, senior fellow at the Atlantic Council's Global Energy Center, the EU is giving Chinese state-backed SAIC a warning to construct a production facility within Europe or face tariffs.

The maximum tariff rate of 38.1 percent was received by China's SAIC group. Although the automaker has a limited presence on the continent, it has not yet decided on a location for its first European production facility, despite having considered it for nearly a year, according to Webster in a Wednesday report.

Webster stated that both BYD and Geely have significant investments in Europe.

In December, BYD has pledged to construct a new EV factory in Hungary following the establishment of an electric bus manufacturing plant in the country. Geely, the parent company of Volvo, has begun shifting production of certain vehicles from China to Belgium.

– CNBC's Lim Hui Jie contributed to this report.