China EV Sales: Xpeng, Nio, Li, BYD rise above key level as Covid Overhang starts to pick up

By | November 30, 2022

China EV sales are expected to increase in November seasonally strong, with no (NIO) is poised for a strong recovery as supply headwinds ease and new models increase. XPeng (XPEV) surged on Wednesday, leading a broad rise for China’s EV stocks after a better-than-feared fourth-quarter delivery outlook. More signs emerged on Wednesday of a shift in China’s ultra-strict Covid policy that has weighed on automakers.




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On December 1, Nio, XPeng and their Chinese EV startup Read Auto (LI) are set to report November sales. Chinese giant EV BYD (BYDDF) should occur within a few days.

All these EV manufacturers are increasingly competing with tesla (TSLA) in the world’s largest EV market.

Retail sales of NEVs are expected to reach 600,000 in November, estimates the China Passenger Car Association. This would represent an increase of 58.5% year-on-year and also about 8% year-over-year. Unlike BYD, all startups saw October sales drop from September amid lockdowns.

“New energy vehicles,” or NEVs, include all-electric, hybrid-electric, and fuel-cell vehicles.

“Historically, car sales in China have risen sharply in the holiday months,” Edison Yu, an analyst at Deutsche Bank, wrote in a Nov. 25 note. He expects new models including Nio ET5 and Li L8 and L9 to boost November sales.

The country’s EV subsidies are due to expire at the end of the year, which could increase demand.

Chinese electric vehicle stocks surged on Tuesday and rose again on Wednesday. Local authorities continued to ease some ‘covid zero’ rules on Wednesday after protests against the policy erupted in several cities over the weekend. China’s top leadership is also pushing for a more “targeted and precise” approach to fighting the coronavirus, local media said.

No Sales

Check out the November results on Thursday. In October, Nio delivered 10,059 electric vehicles, down 7.5% from September but up 174% from a year earlier.

Investors will especially watch the November ET5 numbers. Blockages and supply problems held back October volumes of the new sedan, a Tesla Model 3 rival.

Deutsche Bank’s Yu predicts Nio will deliver a record 13,500 EVs in November, up 34% from October, and 19,500 EVs in December.

Nio itself guided record fourth-quarter deliveries on Nov. 10, while posting a worse-than-feared third-quarter loss.

It expects to deliver 43,000-48,000 EVs in the fourth quarter, up 72% to 92% year-over-year. It would also be a 36% to 52% increase from the 31,607 EV deliveries in Q3.

These deliveries will include a small but growing number of sales in Europe. Nio has expanded deliveries from Norway to several European countries.

Nio shares surged 17.3% to 12.31 in the stock market today, bouncing above its 50-day intraday line. Shares of Nio and its EV peers in China remain below the 200-day line after a dip last year.

XPeng sales

Check back later for November results. XPeng sold 5,101 EVs in October, down nearly 40% from September, continuing a rapid month-on-month deterioration in sales.

Earlier on Wednesday, XPeng reported a larger-than-expected third-quarter loss of 39 cents per ADR share. Revenue increased by 19.3% to RMB 6.82 billion or US$959.2 million.

It sees Q4 deliveries of 20,000 to 21,000 EVs, down approximately 50% to 52% year-over-year and a significant drop from Q3’s 29,570. With October deliveries in hand and November sales likely to be similar, this means that XPeng deliveries will recover to around 10,000 in December.

Deutsche Bank’s Yu predicted that XPeng would deliver 19,500 EVs in the fourth quarter. New models such as the G9 SUV are slowly growing while some older models are being phased out, he said.

Shares in XPeng were up more than 36% by 10:01 am on Wednesday, moving above the 50-day line. Shares surged 6.5% to 7.34 on Tuesday.

On Wednesday, the southern Chinese city of Guangzhou, where XPeng is headquartered, relaxed Covid-19 restrictions in several districts. Other major Chinese cities, including Shanghai and Zhengzhou, home to the world’s largest iPhone factory, also said on Wednesday they were lifting Covid lockdowns.

Li car sales

Check back later for November results. Li Auto sold 10,052 vehicles in October, down 13% from September and up 31% from a year earlier.

Li Auto is facing minor delays in the delivery of some new L8 and L9 models due to parts shortages in November, based on local media reports. But weekly registration data suggests that Li Auto will easily exceed 10,000 deliveries.

Li started L9 SUV deliveries on August 30 and started L8 deliveries on November 10. It phased out its original One model.

On December 9, Li Auto will report third-quarter earnings ahead of market opening. It is also expected to provide a fourth quarter delivery estimate at that time.

Shares in Li Auto rose 16% to 21.53 on Wednesday, returning above a 50-day long slip line. Shares were up 8.7% to 18.53 Tuesday.

BYD sales

Check back later for November results. In October, BYD sold a milestone 103,157 all-electric EVs, up 150% year-over-year. It sold 217,816 all-electric and hybrid-electric vehicles combined in October.

BYD is on track to sell nearly one million all-electric vehicles by 2022.

Exports remain a small share of total sales, but they are growing rapidly. The Warren Buffett-backed EV maker has a massive international expansion underway. On Tuesday, BYD said it would enter the personal electric vehicle market in Mexico next year.

On December 9, BYD is set to launch the Frigate, a hybrid SUV. This will boost a number of new EV releases. The BYD Seal, a Tesla Model 3 rival, was launched in late August.

BYDDF shares rose 7.7% to 50.21, back to the 50-day line for the first time since early August. Shares were up 5.2% on Tuesday. BYD trades over-the-counter in the US

Tesla stock

Tesla doesn’t just report sales in China, but weekly log data suggests a strong month for local sales in China. A late-October price cut and various other incentives, along with Tesla’s big production increase and China’s soon-to-expire EV subsidies, are likely contributing factors.

Tesla shares were up 1.1% on the day. On Tuesday, the shares fell 1.1%, trading below major averages.

EV sales in China

China’s electric car market remained buoyant in the first 10 months of 2022 despite headwinds.

During that period, NEV sales were up 110%, while the broader passenger car market grew by just 14%, according to data from the China Association of Automobile Manufacturers. In October alone, China’s all-electric sales increased by 70% to 508,000.

“Over the past 10 months, the (NEV) segment has seen triple-digit monthly seven-figure year-on-year growth, supported by strong underlying demand and tax breaks offered by the government,” analysts at Deutsche Bank said in a November 25 note.

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