EV Deliveries Continue To Fall In China As The Competitive Battle Rages On

On Monday afternoon, the China Passenger Car Association released February delivery figures. Upon the release of the data, shares of Nio Inc NIO and XPeng Inc XPEV were down about 8.3%. Li Auto Inc LI tumbled nearly 14%. Even the EV king, Tesla Inc TSLA suffered a share drop of 7%. So did BYD Company Limited BYDDY, which dethroned Tesla in the fourth quarter of 2023 as the top EV maker, as its shares were off about 1% upon the news of February shipments. On Tuesday, Nio released its fourth quarter results that showed its losses widened as the EV battle in China continues to intensify.

EV Deliveries In China Continue To Fall

According to data from the China Passenger Car Association via Bloomberg, Tesla shipped 60,365 vehicles from its Giga Shanghai China factory. This was its lowest level since December 2022, translating to a drop of 16% month-on-month and a YoY decrease of 19%.

Even BYD observed its February sales tank 37% month-on-month to 122,311 units. This is also the lowest sales figures BYD reported since May 2022.

Li Auto reported it delivered 20,251 vehicles in February, translating to a YoY rise of 21.8%, but a month-on-month drop of 35% from January. 

Nio delivered 8,132 cars in February, falling 19% from January and 33.11% from last year’s comparable quarter. 

XPeng observed a 44.9% month-on-month drop in deliveries to 4,545 vehicles. 

Nio reported dissapointing fourth quarter results and first quarter outlook.

Nio reported its fourth quarter revenue rose 6.5% YoY and 10.3% quarter-on-quarter to $2.4 billion. Despite better-than-expected sales, Nio reported a fourth quarter net loss of 5.4 billion yuan which brings its annual loss to about $ 2.9 billion. Annual deliveries fell short of its targets.

Unlike its rivals XPeng and Li Auto, which are now making money, Nio also hasn’t announced any major product launch plans for this year. However, Nio is expected to unveil a mass-market brand that would compete with Tesla, more precisely, its made-in-Shanghai Model Y. For the first quarter, Nio guided expects to hand over between 31,000 and 33,000 vehicle shipments, therefore forecasting a sharp fall of 34.1% to 38.1% compared to 2023’s fourth quarter deliveries that amounted to 50,045 EVs. Even Li Auto guided for a quarter-on-quarter slump of 24.1% in the January-March deliveries. Nio also guided for revenue of 11.1 billion yuan that is a far cry from analyst estimates. 

 The EV price war in China is raging as the competition continues to intensify, and only a few EV makers reached the profit shore, with many such as NIO having yet to break even.

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