Nio, Li Auto, XPeng and BYD reported strong July sales early Tuesday, with all four Tesla China rivals showing momentum. Li Auto stock scored a new high after more than doubling year to date, but its peers fell.
Li Auto deliveries surpassed 30,000 for the second straight month, with Li keeping the top spot among startups. Nio deliveries topped 20,000 for the first time. XPeng recovered further but lagged vs. startup peers.
In the second half of 2023, Deutsche Bank analyst Edison Yu continues to expect big volume improvements from Nio and XPeng as their new product cycles ramp up. Meanwhile, "Li Auto could be in a more defensive position as competition intensifies," he said in note to clients Tuesday.
BYD, China's EV and battery giant, set a monthly delivery record but was off track on its annual target.
Tesla, which triggered a price war, reports global EV sales on a quarterly basis.
Here are July sales results for the Chinese EV makers:
Tesla's China Rivals: Li Auto
Li Auto sold 34,134 hybrid SUVs in July, up 227.5% vs. a year earlier and up 4.8% vs. June. Deliveries crossed the 30,000 mark for the second consecutive month.
Recent launches include the L7, L8 and L9 SUVs. Li's first all-electric vehicle, a minivan, is due this year.
Li Auto, the leader among China EV startups in 2023, reports earnings for the second quarter on Aug. 8.
Shares of Li Auto rose 3.7% to 44.37 on the stock market today. LI stock made a 52-week high of 44.69 intraday.
Year to date, the EV stock has more than doubled, soaring nearly 118%.
The EV startup belongs to the IBD 50 list of top growth stocks. Li calls itself a leader in China's premium auto market for SUVs priced above RMB 300,000 (roughly $42,000).
Last Thursday, Morgan Stanley raised its price target on Li stock, Xpeng and Nio, following the launch of several new and more affordable electric vehicles.
"The lackluster first half of 2023 is now behind us, and we are starting to see an inflection point of meaningful operational improvement," Morgan Stanley's Tim Hsiao said in a note to clients. He cited "volume upturn, policy tailwinds, autonomous driving and technology monetization."
Nio
Nio sold 20,462 EVs in July, up nearly 104% vs. a year earlier and up 91.1% vs. June's 10,707.
Deliveries of the revamped ES6 SUV topped 10,000 in their first full month.
There had been a lot of social media buzz that Nio would break the 20,000 delivery mark in July.
In July, Nio's EV lineup was mostly new or totally overhauled and boasting lower prices after Nio joined an EV price war in June.
Nio stock fell 4.4% to 14.63 Tuesday. Shares have more than doubled from the 52-week low, set in June, as anticipation builds for a strong second half of 2023. The EV stock up about 50% year to date but remains below the September 2022 high.
XPeng
XPeng sold 11,008 EVs in July, down 4.5% vs. a year earlier but up 27.7% vs. June's 8,620. Deliveries have improved month-to-month for the past six months, XPeng said.
Deliveries of the all-new G6 crossover, a Model Y rival that's considerably cheaper, topped 3,900 after starting during the month. Management is reportedly targeting monthly sales of 10,000 units for the EV.
Separately, XPeng announced Tuesday that it will report Q2 earnings on Aug. 18.
XPEV stock declined 4.2% to 20.05.
Shares have more than doubled year to date, rocketing almost 103%. Xpeng stock remains below the 52-week high, set last August.
Last Wednesday, XPeng and Volkswagen announced a deal to jointly develop two electric cars, using the Chinese startup's platform and software. That could lead to more partnerships between global automakers and Chinese EV startups and reverse the old trend of Western technology underpinning the Chinese car industry, Morgan Stanley analysts said.
BYD
BYD sold a record 262,161 EVs in July, up 61.3% vs. a year earlier and 3.6% vs. June's 253,046. Of the 261,105 passenger vehicles, BYD sold 134,783 all-electric BEVs and 126,322 plug-in hybrids.
The EV and battery giant's sales are mostly in China, but overseas sales surged to a record 18,169 in July.
BYD seeks to sell at least 3 million vehicles in 2023. That means it has to sell roughly 290,000 per month in the second half, with July sales falling short of the mark.
The Warren Buffett-backed EV maker continues to launch both luxury and cheaper electric vehicles. It began delivering the N7, a crossover EV from its premium Denza brand, on Saturday. The Denza N7 is seen as a Model Y rival. The Denza N8 SUV will launch on Aug. 5.
Shares of BYD eased 1.4% to 35.18, near an 11-month high. BYD stock is in range of a 34.98 buy point from a flat base, base-on-base formation.
The EV stock has surged more than 43% year to date. It remains below the June 2022 decade high.
China EV Sales
Sales of new energy vehicles (NEVs) in China, including all-electric cars and plug-in hybrids, jumped more than 25% in June to 665,000. The overall car market shrank 2.9%.
In the first half of 2023, China EV sales surged more than 37% to 3.09 million. Demand for electric cars has steadily rebounded after a slow start to the year.
Analysts expect new and more affordable electric vehicles to boost second-half sales for Tesla's China rivals. China has also extended a tax break for purchasing EVs.
Still, the world's largest EV market is slowing.
China EV sales more than doubled in 2021 and 2022. They are expected to grow around 30% this year.
