China EV makers Li Auto, Nio, XPeng and perhaps industry titan BYD reported a sharp drop in January deliveries on Thursday, confirming a slow start to 2024. But the hard-hit EV stocks rallied Thursday.
Meanwhile, Tesla announced new Model Y discounts in China on Feb. 1, following official price cuts on the Model Y and Model 3 in January. TSLA stock also rose.
Insurance registrations had signaled sharp declines for Li Auto, Nio, XPeng, BYD and Tesla, which will not release monthly figures. That comes despite significant discounts for Li, Nio, XPeng and BYD, as well as outright price cuts by Tesla.
EV and overall auto sales tend to be sluggish early in the year. There's often a drop-off from a year-end sales peak. Also, the long Lunar New Year holiday hits production and demand. Lunar New Year starts on Feb. 10 in 2024. That points to another weak month of EV sales.
Meanwhile, China's economy is sluggish, further weighing on purchases. Also, new or revitalized entrants, such as Huawei-backed Aito, are putting further pressure on EV makers.
Li Auto
Li Auto delivered 31,165 vehicles in January, up 106% vs. year earlier but down 38.1% from December's record 50,353.
Li sells three SUVs, all extended range electric vehicles (EREVs), essentially a form of plug-in hybrid. It will begin selling its first all-electric battery vehicle, the Mega MPV, this spring.
Li Auto has offered big discounts of roughly $5,000 across its existing lineup, in part due to 2024 face-lifts for the L9, L8 and L7 SUVs.
Li stock rose 5.6% Thursday. Shares are down 26% in 2024, through Wednesday, hitting an eight-month low of 26.43 on Jan. 22.
Nio
Nio delivered 10,005 vehicles, up 18% vs. a year earlier but down 44% vs. December's 18,012, its third best month ever.
Like Li Auto, Nio is providing hefty discounts for its 2023 models ahead of 2024 face-lifts.
Nio stock advanced 1.2% Thursday. Intraday Wednesday, shares hit 5.43, the lowest since June 2020. Nio is off 38% in 2024 through Wednesday.
XPeng
XPeng delivered 8,250 EVs in January, up 58% vs. a year earlier but down 59% vs. December's 20,115.
January's total includes 2,478 X9 MPV, which began deliveries in early January.
XPeng is offering discounts, some very large, on some of its other models.
Shares climbed 2.2% to 8.51 Thursday after hitting a seven-month low Wednesday. XPEV stock had dived 43% in 2024 through Wednesday.
BYD
BYD sold 201,493 EVs in January, up 33% vs. a year earlier but down 41% from December's record 341,043, including 340,178 passenger vehicles. That's despite overseas sales hitting a new record of 36,174, up just 0.2% vs. December but 247.5% vs. January 2023.
BYD also benefitted from rising sales of its new premium off-road vehicles, the new Fangchengbao Ba0 5 and the superpremium Yangwang U8 is at 1,493.
BYD on Monday reported preliminary 2023 profit that's up 74.5%-86.5% vs. a year earlier, but implied Q4 earnings below views.
BYD stock, which trades over the counter in the U.S., edged up 0.7% to 22.65. Shares fell 1.3% to 22.50 on Wednesday. Shares plunged nearly 19% in 2024 through Wednesday, hitting a 10-month low.
Tesla Discounts
Tesla is offering an RMB 8,000 subsidy on Model Y inventory with HW 3.0, as its Shanghai plant begins to produce the Model Y with HW 4.0.
Meanwhile, customers who order the Model 3 or Y before Feb. 29 will pay just RMB 2,000 for all paid paint if they take delivery by March 31. Tesla offers both EVs with free black plant, with all other options costing RMB 8,000-12,000.
Finally, Tesla is offering discounted interest rates on purchases.
In January, Tesla cut prices modestly in China, followed by bigger reductions in Europe.
Tesla China Sales
Tesla doesn't break out China monthly sales, but industry data give a fairly clear picture.
Insurance registrations are at 35,200 so far in January.
In December, Tesla sold 94,139 China-made vehicles. That included 78,505 EVs sold in China and 18,334 sold overseas.
Traditionally, Tesla Shanghai has exported the bulk of its production in the first half of the quarter, then focused on domestic deliveries.
However, exports have been waning over the past several months. Much of that reflects waning demand in Europe. Tesla Berlin, which is running well below capacity, halted production for two weeks starting Jan. 29.
Tesla stock edged down 0.3% Thursday. TSLA has tumbled 25% in 2024, which much of that coming on weak Tesla earnings guidance.
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