Deliveries in June from Chinese electric-vehicle producers
Li Auto,
XPeng,
and
NIO
were great but uneven. The results hold a couple of lessons for investors ahead of
Tesla
‘s closely watched delivery report due Sunday.
The Chinese EV trio delivered 51,902 vehicles in June, a record for any month and up from 41,280 delivered in June 2022. The result showed that EV demand in China has been growing.
That’s good news for investors in
Tesla
(ticker TSLA),
BYD
(1211.Hong Kong), and other EV makers. China is the largest market for new cars and, more importantly, new EVs. In 2022, more than 60% of all battery-electric vehicles sales took place in China.
Records are great, but the month for
NIO
(NIO),
XPeng
(XPEV), and
Li Auto
(LI) was very uneven.
Li Auto delivered 32,575 vehicles, up 150% from the 13,024 delivered in June 2022. It’s a record for the company and the first time it has exceeded 30,000 units in a month. Li accounted for more than 60% of combined deliveries.
NIO delivered 10,707 units in June, down about 17% from 12,961 units delivered in June 2022.
XPeng delivered 8,620 units in June, down 44% from the 15,295 delivered in June 2022.
Along with strong overall demand, results from the three Chinese EV start-ups showed not every company is winning and the strong have been getting stronger. That isn’t great news for XPeng, which has struggled the most lately. Shares of XPeng have fallen 56% over the past 12 months, while the
S&P 500
and
Nasdaq Composite
have gained about 16% and 24%, respectively, over the same span.
NIO stock has struggled too. Shares have declined about 55% over the past 12 months. Li stock has been the relative winner, dropping just 7% over that span.
The market likes growth. Li deliveries in 2023 have risen about 130% from last year. NIO has eked out 7% growth. XPeng’s year-to-date deliveries have fallen 40%.
Chinese EV leader BYD has grown battery-electric deliveries by about 90% year to date through May. (June deliveries are expected soon). The company’s shares have declined 20% over the past 12 months, but BYD’s market capitalization is still north of $100 billion.
In China,
Tesla
has grown deliveries in China by almost 50% this year. Its stock has gained about 15% over the past year. Tesla is the most valuable car company in the world with a market capitalization north of $800 billion.
As the EV industry matures, it’s getting harder for smaller companies to maintain momentum. That’s fine for Li, BYD, and Tesla. The news isn’t as good for the others.
As for Tesla, Wall Street is looking for roughly 445,000 units delivered in the second quarter, up from about 255,000 units in the second quarter of 2022 and up from about 423,000 delivered in the first quarter of 2023.
Write to Al Root at [email protected]
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