It’s the time of the month when Chinese electric vehicle makers disclose their monthly deliveries, and this time around, the country's COVID-19 restrictions and lockdowns have cast a cloud on both production and demand.
Tough November? Nio, Inc. NIO's October deliveries report that was released Nov. 1 gave a taste of things to come. The Shanghai-based EV maker said that its October production and delivery were constrained by operational challenges and supply chain volatilities due to the COVID-19 situation in certain regions of China.
Nio’s domestic peers XPeng, Inc. XPEV and Li Auto, Inc. LI were tightlipped and did not explicitly mention the predicament.
Since Nov. 1, the situation has only worsened.
On Nov. 29, mainland China reported COVID-19 cases comprising 33,540 asymptomatic and 4,288 symptomatic cases, according to data from China’s National High Commission. This represented an easing from the 38,645 new cases reported a day earlier. Ahead of that, new cases made new records for four straight days.
The latest statistics show that Guangdong province, where XPeng has its main factory, is among the worst hit. Incidentally, the Guangzhou-headquartered company’s third-quarter earnings release neither referenced COVID-19 nor production and supply disruptions. Yet the company guided to a roughly 40% year-over-year drop in fourth-quarter deliveries and a 40%-44% fall in revenue.
How EV Trio Fared In October: Nio reported a 174% year-over-year increase in October deliveries, partly helped by easier comparisons. Li Auto’s year-over-year growth was a modest 13% and XPeng underperformed with a 50% annual drop.
Shipments of the three came in at 10,059 units, 10,052 and 5,101 units, respectively. On a month-over-month basis, all three reported declines.
Li Auto had hinged its future performance on its Li L8 SUV, the deliveries of which began on Nov. 10. The company hinted at increased orders for its newest model. The company also said its Li L9 premium electric SUV orders were robust.
XPeng’s CEO He Xiaopeng said in early November that he expects the P7 and G9 models, both built on the Edward platform, to comprise a larger proportion of total deliveries in the coming months.
As recently as this week, Jefferies analyst Johnson Wan downgraded XPeng shares from Hold to Sell and drastically reduced the price target from $18.60 to $4.20, Barron’s reported. The muted outlook was blamed on the price war set in motion by EV pioneer Tesla, Inc. TSLA in China, the withdrawal of government subsidies and higher costs of lithium, a metal used in EV batteries.
Warren Buffett-backed EV maker BYD Company Limited BYDDY BYDDF has proved to be the most resilient and has grown its deliveries through the COVID years.
EV Price Action: Chinese EV makers have seen their stocks plummet over the year amid delisting fears and China's regulatory clampdown. The vagaries seen in production and sales have also weighed down on these stocks.
On Wednesday, the shares of the EV trio are soaring amid optimism over China hinting at easing COVID-19 curbs.
According to Benzinga Pro data, Nio shares were skyrocketing 16.71% to $12.26, XPeng was jumping 37.61% to $10.10 and Li Auto was surging up 16.78% to $21.64.
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Photo courtesy of Nio.
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