China EV sales jumped in June and the second quarter for EV giants BYD and Tesla. Li Auto led the way among EV startups with record June and Q2 sales, while Nio and XPeng deliveries picked up. China EV stocks rallied broadly Monday.
"June EV sales surprised to the upside as demand picked up, likely signaling some normalization in consumer behavior and release of pent-up demand from buyers taking advantage of low prices," Deutsche Bank analyst Edison Yu said in a note. An EV price war is ongoing in China, but may be easing.
XPeng stock spiked last Friday, after launching its Tesla Model Y rival Thursday.
On Sunday, Tesla reported global Q2 sales well above views after price cuts.
Here are June and Q2 sales results vs. expectations for the Chinese EV makers.
China EV Sales: BYD
BYD sold a record 253,046 vehicles in June, up from 240,220 in May and 210,295 in April. June sales included 251,685 passenger vehicles, comprising 128,196 battery electric vehicles (BEVs) or all-electric vehicles, and 123,489 plug-in hybrids. BYD also sold 1,361 commercial vehicles in June.
For all of Q2, BYD sold 703,561 vehicles, up 27.4% vs. Q1. It sold 700,244 passenger vehicles in Q2, comprising 352,163 BEVs and 348,081 plug-in hybrids.
By comparison, Tesla delivered 466,140 BEVs worldwide in Q2, beating estimates of around 445,000. Tesla does not report sales by country but China accounts for a big chunk of its global sales.
In the first six months of 2023, BYD has already sold more than 1.2 million EVs, including hybrids. For context, BYD sold more than 1.8 million EVs, including hybrids, all of last year. The automaker has a 2023 goal of selling at least three million vehicles. To do that, BYD will have to sell roughly 290,000 a month in the second half.
The homespun EV giant continues to launch cheaper versions of its electric vehicles, including the Yuan Pro and Song Pro in late May. It also began delivering the cheap and small Seagull in May. On Monday, BYD will launch the Denza N7, a premium crossover and the second vehicle from Denza's line.
BYD stock climbed 3.4% to 33.10 Monday. Shares show a 31.07 buy point.
Li Auto
Li Auto delivered 32,575 vehicles in June, up from 28,277 in May and 25,681 in April. For all of Q2, Li delivered 86,533 vehicles, well above prior guidance for 76,000-81,000 and up from 52,584 in Q1.
The maker of premium vehicles said it has already surpassed its total 2022 deliveries in the first half of 2023. Analysts have singled out Li among startups for its superior execution.
"Our monthly deliveries exceeded 30,000 for the first time, making Li Auto currently the only Chinese premium brand to achieve this milestone," Li added in the June and Q2 sales release.
For Q3, the hybrid SUV maker aims for monthly deliveries for the L8 and L9 of more than 10,000, and hoping to hit 15,000 monthly sales of the L7. For Q4, Li is looking for overall monthly deliveries of 40,000. It'll also roll out its first all-electric model in Q4, the Mega minivan.
LI stock popped 3.4% in Monday's stock market trading, but pared gains. Li Auto stock jumped has soared roughly 80% so far this year, far outperforming its startup rivals.
Nio Deliveries
Nio delivered 10,707 vehicles in June, up sharply from 6,155 in May and 6,658 in April.
For Q2 as a whole, Nio delivered 23,520 vehicles in Q2, near the low end of its target for 23,000-25,000 deliveries. That was down from 31,104 in Q1.
June sales got a boost from the "speedy ramp up" of its ES6 SUV, analysts at Deutsche Bank said.
Nio has joined the EV price war started by Tesla, after long insisting it wouldn't do so. On June 12, the maker of premium EVs slashed prices by 30,000 RMB (roughly $4,200).
On May 24, Nio launched the new ES6 of its bestselling electric SUV. It recently began delivering the new ES8 and ET5 Touring. Both the ES6 and ES8 are totally overhauled, second-gen versions of existing models.
NIO stock advanced 3.5% to 10.03 Monday.
Smaller EV makers could be most vulnerable in a prolonged China price war, due to their thinner margins and dwindling cash reserves, analysts say.
XPeng
Xpeng delivered 8,620 vehicles in June, up from 7,506 EVs in May and 7,079 in April. It was the fifth straight month-to-month gain, following a sales slump. For Q2, XPeng delivered 23,205 vehicles, above the top end of its guidance for 21,000-22,000 deliveries. That was up 27% quarter over quarter.
In July, Xpeng will begin delivering the G6, which launched June 29 and for which it has high hopes.
The G6 will start at RMB 209,900 ($28,941), significantly lower than the Tesla Model Y's starting price of around RMB 263,900 in China.
Management is reportedly targeting monthly sales of 10,000 units. The G6, based on a next-generation technology architecture, is the most competitively priced SUV in China in the RMB 250,000 range, XPeng claims.
Analysts at Deutsche Bank say the embattled startup could be making its "last stand" with the G6.
XPEV stock surged 11% in Monday's premarket trading. But Xpeng shares trimmed gains to 4.2%, at 13.98, in the regular session.
Last week, XPeng stock leapt 36% amid the G6 launch. XPEV stock continued its June rebound, which has taken shares back above the 50-day and 200-day averages.
Shares on Friday cleared a deep consolidation going back to early December, with buy points at 11.95 and 13.10.
China EV Sales
Retail sales of passenger new energy vehicles (NEVs) in China reached 638,000 units in June, up 10% from May, CnEVPost.com reported, citing preliminary data from the China Passenger Car Association (CPCA). NEVs include all-electric, hybrid-electric and fuel-cell vehicles.
Analysts expect new and more affordable electric vehicles to boost second-half sales. In June, China extended a tax break for purchasing EVs beyond 2023.
The world's largest EV market is showing slowing growth.
China EV sales more than doubled in 2021 and 2022. They are expected to grow around 30% this year.
