Magna’s European Contracts Boost Chinese EV Sales, Shares Surge
Magna International Inc. experienced a significant surge in its share price, rising by 18 percent, following positive sales forecasts for 2026. This growth is driven by the company’s new assembly contracts with Chinese electric vehicle manufacturers, including Xpeng and GAC.
Impact of New Contracts on Sales
Phil Fracassa, Magna’s finance chief, announced that despite a flat global auto production forecast for this year, the contracts in Europe would boost the company’s sales figures. As a result of these contracts, Magna commenced the assembly of electric vehicles for Xpeng and GAC at its plant in Graz, Austria, which has a rich history of producing over four million vehicles for various prestigious brands.
Opportunities in the Electric Vehicle Market
The demand for electric vehicles in Europe is increasing, prompting Chinese automakers to collaborate with Magna for local production. This strategic move is expected to enhance growth opportunities in Magna’s complete vehicles business.
Financial Projections and Analyst Insights
Looking ahead, Magna projects sales for this year to range between $41.9 billion and $43.5 billion, marking a potential increase of 3.5 percent compared to 2025. For 2026, the company anticipates an adjusted profit per share between $6.25 and $7.25, surpassing analysts’ expectations of $5.99, according to LSEG.
Recent Financial Performance
- Profit for 2025 decreased by 20%, totaling $829 million or $2.93 per share.
- Revenue fell by 2% to $42 billion compared to 2024.
- For the fourth quarter of 2025, Magna reported a loss of $1 million, contrasted with a profit of $203 million the previous year.
Market Conditions and Challenges
Magna faces pressures from global market conditions, including the impact of tariffs introduced by the former U.S. administration. Despite these challenges, the company has managed to pass most of the tariff costs onto customers, mitigating their financial impact.
The automotive landscape in the European Union is also showing a shift, with battery-electric and hybrid-electric cars capturing 17% and 14% of the market, respectively, according to the European Automobile Manufacturers’ Association. This trend highlights the growing acceptance and demand for electric vehicles, a sector in which Magna is increasingly involved.
With a focus on enhancing its production capabilities and adapting to market changes, Magna International is positioned to benefit from its strategic partnerships and forecasts for steady growth.
