China EV giant BYD joined China EV startups Li Auto, Nio and Xpeng Motors with lackluster February EV sales, amid several headwinds. BYD stock sank Friday.
Signs pointed to growing chip and battery shortfalls in China, the world's largest market for electric cars, with Tesla said Friday to push out EV deliveries by four weeks further.
In February, BYD and its China EV peers grew EV sales at a robust pace vs. a year ago. However, EV sales fell vs. January for each, including for BYD, the Warren Buffett-backed company said Friday.
The companies are challenging Tesla in China, the world's largest and fastest-growing market for electric vehicles.
BYD, Li Auto Outsell Nio, Xpeng
In February, BYD sold 87,473 so-called new energy vehicles, or NEVs, leaping 764% vs. a year ago but down nearly 6% from January. Sales of the flagship Han EV, a mid to large sedan, tumbled 27% last month vs. January. China's BYD is backed by Warren Buffett's Berkshire Hathaway.
Overall, BYD sold 90,268 vehicles last month, down from 95,422 in January. NEVs include pure electrics, plug-in hybrids and fuel-cell vehicles.
In February, Li Auto sold 8,414 Li One hybrid SUVs, up 266% vs. a year earlier but down sharply from 12,268 in January. Xpeng sold 6,225 EVs last month, up 180% vs. a year earlier but less than half of the 12,922 units sold in January. Nio sold 6,131 EVs last month, up 10% vs. a year earlier but well below 9,652 cars sold in January. The China EV startup trio reported February sales earlier this week.
For all four China EV stocks, January sales already fell vs. December.
Tesla, the leader in China luxury EV sales, reports global EV sales quarterly. Industry data will show Tesla China sales and exports later this month.
January and February tend to be a seasonally soft period for China auto sales, overlapping with the Chinese New Year. This year, other factors contributed to the month-over-month slowdowns.
"The holiday season and an outbreak of the pandemic in Suzhou have resulted in supply shortages and affected our production," said Yanan Shen, the co-founder and president of Li Auto, in Tuesday's sales news release.
And BYD raised prices of certain NEVs Feb. 1, citing higher input costs and the removal of government subsidies for new energy vehicles, according to local reports.
Meanwhile, during the Chinese New Year holiday in early February, Nio and Xpeng underwent planned downtime at assembly plants. Nio is preparing to start selling the ET7, its first electric sedan, in March.
China EV Sales: Battery Shortages
In addition to auto chips, Chinese EV makers face new hurdles due to battery supply shortages, the South China Morning Post reported Feb. 27. A senior Tesla sales manager in Shanghai told the publication that supply constraints for chips and batteries is weighing on EV sales and deliveries.
The shortages come amid soaring EV demand. In 2021, overall China EV sales, including hybrid vehicles, boomed 169%.
Tesla in China reportedly is now making customers wait for as long as five months, up from four months earlier, for Model 3 and Model Y deliveries, according to Chinese media reports Friday. And last week, Xpeng Motors again apologized to customers for delays in delivering its P5 sedans due to insufficient battery supply. It faced similar delays, leading to consumer complaints, last September.
Combined, all those issues have hit delivery times for vehicles and led to order backlogs.
Byd Stock, China EV Stocks
Shares of BYD tanked nearly 8%, near 27, on the stock market today. BYD stock further undercut a falling 50-day moving average, hitting its lowest level since last July. Among other China EV stocks, Nio stock lost 5.9% Friday and Xpeng shed 4.9%. Li Auto stock gave up 3.3%.
Tesla was unchanged, near 840, well below the 50-day average and testing the 200-day line.
On March 10, Nio shares are set to start trading on the Hong Kong stock exchange after a secondary listing, the company said in Tuesday's release.
Li Auto and Xpeng Motors are already dual-listed in the U.S. and Hong Kong.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
