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Citigroup analyst Jeff Chung sees sales in August and September as important for Chinese EV stocks.
Hector Retamal/AFP via Getty Images
Demand for electric vehicles in China is fluctuating. It can do that
Tesla
investors are nervous on Thursday.
Deliveries for Chinese EV manufacturer
Li Auto
(ticker: LI ) was down 52% in August from a year earlier.
of XPeng
(XPEV) report was much better. Still,
XPeng
shipments were down 17% from July. Monthly numbers from NIO (
NIO
) appear to be the strongest of the three. The company managed to increase deliveries in August compared to the previous month.
Li said deliveries last month were 4571 compared to 9,433 a year earlier. XPeng delivered 9,578 cars in August, compared to 11,524 in July and 7,214 vehicles in August 2021. Delivered NIO 10,677 cars in August compared to 10,052 delivered in July and 7,102 delivered in August 2021.
In total, the three automakers delivered 24,826 vehicles in August. This is the second consecutive monthly decline and the worst number since April 2022, when the Covid lockdown affected results.
American depository shares of
Li Auto
fell 2% in premarket trading Thursday. XPeng was down 2.2% and NIO shares fell 2.6%.
and
futures fell 0.8% and 0.6%, respectively.
Tesla
(TSLA) availability may also be affected by China shipping figures. China is the largest market for new electric cars in the world and
Tesla
generates about a quarter of its sales in the country.
Preliminary estimates from the China Automobile Association showed that Tesla produced about 77,000 vehicles in China in August. That’s a good month and would be the second-best month since the company’s Shanghai plant. This preliminary figure also includes exports. The breakdown of domestic sales and export sales should be available later in the month.
Tesla shares were down about 1.8% in premarket trading.
Li Auto and XPeng have already reported second-quarter numbers and provided third-quarter delivery guidance. It’s easy to see what August deliveries mean for September. NIO reports its second quarter numbers on September 7.
XPeng expects to deliver about 30,000 vehicles in the third quarter, down from 34,422 delivered in the second quarter. XPeng delivered 11,524 in July. Including the August figure, XPeng needs to deliver about 8,900 vehicles in September to meet the guidance. This will of course be lower than the August number.
Li Auto expects to deliver about 28,000 vehicles in the third quarter, down from 28,687 delivered in the second quarter. Li delivered 10,422 vehicles in July. Including the August figure, Li should make about 13,000 vehicles in September. If Li does this, it will essentially be a monthly supply record.
Lower deliveries in the third quarter compared to the second quarter were blamed by management teams on seasonality – July and August are slow months – and ongoing demand issues from the Covid lockdown.
This increases the importance of the numbers of the following months. Citigroup analyst Jeff Chung wrote recently that he thought September sales should show a consistent improvement for shares for work in the end of the year.
Li’s guidance suggests demand will improve. The XPeng manual does not. The conflict will keep investors nervous in the coming weeks.
As of early trading on Thursday, NIO shares have fallen about 38% this year. Shares of Li and XPeng are down about 10% and 63%, respectively. S&P 500 and
have fallen by 17% and 24% respectively.
Rising interest rates have taken some of the steam out of growth stocks like these three. Rising tensions between US and Chinese officials haven’t helped either.
Write to Al Root at [email protected]