Nio managed to increase deliveries of its electric vehicles in August compared to July. However, rivals Li Auto and Xpeng saw shipments fall sharply. EV players continue to face supply chain disruptions for the Covid resurgence in China, as well as weaker consumer demand due to a difficult economic environment in the country.
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Shares in Chinese electric vehicle makers Nio, Li Auto and Xpeng slumped on Thursday after the latter two startups reported sharp falls in auto deliveries in August.
Here are the August delivery figures for the three companies:
- Li car: Deliveries of 4,571 vehicles in August, down 56% from July’s 10,422 vehicles. That number is also down 51% year over year.
- Xpeng: Deliveries of 9,578 vehicles in August, down 16% from July’s 11,524 vehicles. However, this represents an increase of 33% compared to the previous year.
- no: 10,677 vehicles were delivered in August, 6% more than in July with 10,052 vehicles. That was also an 81.6% increase year over year.
Nio was the only company to grow on a monthly basis in August, but US-listed shares of the EV startup closed over 5% lower. Shares in Li Auto fell 3%, while Xpeng fell more than 6%.
In Friday morning trading, Hong Kong-listed shares of Nio and Li Auto fell 0.6% and 0.3%, respectively. Xpeng shares in the city fell 2%.
The Chinese economy is facing a number of challenges, including a resurgence of Covid-19 that has seen major cities like Shanghai locked down. In recent days, Shenzhen, China’s tech hub, has enacted Covid restrictions, and on Thursday the megacity of Chengdu went into lockdown.
While some cities may have reopened, consumer sentiment remains fragile and uncertainty reigns over China’s “zero Covid” policy.
The world’s second largest economy is also facing a power crisis that is affecting EV charging stations. Over the past month, Tesla and Nio have suspended some of their charging services.
These problems permeate the sale of electric vehicles.
Read more about electric vehicles from CNBC Pro
Bill Russo, CEO of Shanghai-based Automobility, told CNBC the numbers reflect “ongoing supply chain issues as well as the fact that they’re at the high end of the price range and with the economy flagging, people are looking at affordability and that’s crowding out some.” of the more expensive models.”
Last month, Xpeng said it would ship between 29,000 and 31,000 electric vehicles in the third quarter of the year. This forecast disappointed investors.
Xpeng President Brian Gu said the guidance reflects the fact that the industry is entering a “relatively slow season” and that there is less traffic in stores due to the Covid situation.
Yanan Shen, president of Li Auto, said in an earnings call last month that the Covid outbreak has “seriously impacted” the company’s supply chains and that “disruptions and difficulties” remain.
Shen also said there has been a slowdown in orders for its flagship Li One sports utility vehicle.
Li Auto started delivering its new L9 car to customers at the end of August. And the company said it plans to launch and deliver a large SUV called the Li L8 in early November. According to Russo, this could affect sales of the Li One.
“Li has big new product launches with the L9 and L8, which also affects consumer demand for Li One. When new products come out, demand for the older model often suffers,” Russo said.
To spur demand, China announced last month that it would extend its tax exemption for new-energy vehicle purchases to the end of 2023.
Competition in the Chinese electric vehicle market continues to intensify. Besides Li Auto’s new cars, Xpeng plans to start deliveries of its new G9 SUV in October and launch two new vehicles next year.
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