Nio Down 9%, Xpeng Skids 12%: Why Are Hong Kong EV Stocks Crashing Today

Shares of Tesla Inc. TSLA rivals and U.S.-listed Chinese firms Xpeng Inc NIO,  Li Auto LI, and NIO Inc XPEV took a heavy beating in Hong Kong on Tuesday as the market opened after a long weekend.

Stocks of these Chinese automakers ended on a similar note in U.S. markets.

Global Markets Recap: The overall benchmark Index Hang Seng plummeted 2.58% – nearly touching its two-month low. This came amid the weakening outlook of the Chinese economy and the hefty overnight losses in the U.S. stock market that saw the tech-heavy Nasdaq Composite dropping more than 5%.

Elsewhere, Australia's ASX 200 slipped 1.36%, and Japan's Nikkei 225 was down 0.93%, while Shanghai's SSE Composite Index erased early losses to gain 0.43%.

The Macro Factors: Data released over the weekend showed China's unemployment rate climbed to 5.8% in March, with Chinese Premier Li Keqiang calling it a "complex and grave" situation as the country grapples with a resurgence in COVID-19 cases.

Data also showed that China's exports grew by 3.9% in April compared with a year earlier – the slowest in 2 years as it likely took a hit from President Xi Jinping's "dynamic zero-COVID" policy.

Company In News: On Friday, U.S. regulatory officials arrived in Beijing seeking to settle a long-running dispute over the auditing compliance of U.S.-listed Chinese firms. JD.com, Nio, XPeng, and Baidu are among the 80 companies that would be impacted by the regulatory crackdown.

Li Auto is set to release its quarterly earnings report on Tuesday. Analysts estimate it will report a loss per share of 10 cents.