EB SECURITIES released a research report stating that the year-end peak season and the phase-out of purchase tax incentives may drive auto orders to new highs, with a focus on model cycles. The firm expects sector-wide Beta to decline overall in 2026 but remains optimistic about structural investment opportunities in auto parts. Domestic passenger vehicle retail sales in 2026E are projected to see a slight year-on-year dip, while NEV exports are likely to maintain rapid growth, stabilizing wholesale sales performance. The report highlights strong earnings-driven Alpha opportunities alongside robotics-related Beta potential. Key takeaways include: 1. Since the start of the year (as of Oct 31), the auto sector has outperformed the market, with parts suppliers leading (current sub-sector PE-TTM valuations remain between the three-year average and +1x standard deviation). 2. Tesla’s Optimus V3 is nearing mass production, potentially keeping its supply chain in the spotlight. 3. The industry may see a high-then-low trend in 2025, with robotics-themed investments persisting throughout the year due to: - Scrappage subsidies providing volume support but facing funding imbalances; - Diverging export structures and profitability; - Slowing NEV penetration growth amid steady but less-hyped autonomous driving policies and R&D progress; - Robotics still in an information-driven, expectation-volatility phase. 4. In 2026, policy-driven demand may dominate, with automakers refocusing on model cycles and robotics poised for breakthroughs: - Scrappage policies may continue but taper off, with adjustments to eligible models and subsidy ratios; - OEMs may shift from price wars to feature-based competition (new/refreshed models offering more at stable prices), with ADAS becoming standard; - BEV/PHEV tech upgrades could intensify competition, leading to divergent model cycles; - Tesla’s Optimus V3 may achieve its first 10,000-unit annual output, making its supply chain a top 2026E investment theme. Risks include weaker-than-expected demand, delayed new model launches, order shortfalls, and policy/market volatility.