Tesla archrival BYD returned to buy range on Monday after setting an EV sales milestone for October. Chinese EV startups XPeng and Nio also rose but Li Auto fell, as global markets braced for Tuesday's U.S. presidential election and a Fed policy vote, as well as China's annual parliamentary meeting. Tesla stock set off a sell signal following weak China-made EV sales.
China Fiscal Stimulus, China EV Sales
The highly awaited meeting of China's Parliament began Monday and concludes on Friday. Beijing is expected to announce more details on fiscal support. Investors hope that new stimulus may improve China's outlook and further fuel EV sales.
New measures to support the electric-vehicle industry could include an increase in EV purchases by government agencies, Bloomberg reported last week, citing an official media outlet.
In October, China EV sales continued their strong growth. Sales of passenger electric vehicles reached 1.4 million units, up 58% vs. a year ago and up 14% from September, the China Passenger Car Association said in a report on Monday. Warren Buffett-backed BYD drove gains last month.
BYD Stock, China EV Stocks
Shares of BYD popped 3% on the stock market today. The Chinese EV giant's stock pulled back slightly below a 36.27 buy point last Friday but regained the entry on Monday.
Investors also could view the latest entry as a handle in a long consolidation going back to June 2022. Shares broke out past three buy points in late August, late September and early October amid several stimulus measures.
Tesla stock fell on Monday, triggering the 7%-8% sell rule, amid weak China EV deliveries.
Among startup China EV stocks, XPeng jumped almost 5% on Monday and Nio also rose, but Li Auto fell amid an analyst downgrade to strong sell.
The 50-day moving averages for XPeng stock and Nio stock are rising again after a long slide. Those short-term support levels crossed above their longer-term, 200-day counterparts in October amid signs of EV sales momentum.
Record Sales For EV Giant; Startups Challenge Tesla
China's EV and battery giant BYD sold 502,657 electric vehicles and hybrids in October, surpassing the half-million monthly mark for the first time. That also represented the fifth straight month of record EV sales, with BYD's October sales jumping 20% from September, sales data tracking firm CnEVPost said.
In October, XPeng's EV sales rose 12% month over month. Nio registered basically flat sales vs. September. By comparison, Li Auto's EV sales fell 4% from September.
Meanwhile, Tesla's deliveries of made-in-China Model 3 and Model Y EVs tumbled almost 23% in October from September, CPCA data showed on Monday. Its sales were down 5% vs. a year ago.
XPeng reported solid sales for the M03, a Tesla Model 3 rival from its affordable new Mona brand. Market watchers expect the company to launch the P7+ on Thursday. The car will be packed with artificial intelligence features, the company says. It will reportedly be 10% cheaper than a base Model 3.
Nio grew sales of the L60 SUV — from its new mass-market Onvo brand — in its first full month of sales in October. The flagship, premium Nio brand posted declining sales last month. Nio's Onvo is expected to release two more models next year, including one by end of March.
On Monday, analyst Aaron Ho of CFRA Research downgraded Li Auto stock from sell to strong sell. He cited China EV competition and "multiple product strategies." Li Auto plans to add more battery electric models and supercharging stations. It is also mulling a push into overseas markets, reports say.
Please follow Aparna Narayanan on X @IBD_Aparna for more coverage.
