Nio (NIO), Xpeng (XPEV) and Li Auto (LI) reported a bounce back in May EV sales on Wednesday after China’s Covid lockdowns slammed the EV startups in April. Chinese EV and battery giant BYD (BYDDF) is due later this week. Nio stock and other Chinese EV makers rose Wednesday after strong gains Tuesday amid easing lockdowns and new EV subidies.
China passenger-car sales in May are expected to drop 19% vs. last year, following a 35% plunge in April, according to the China Passenger Car Association. However, local reports are pointing to government subsidies to bolster car sales in China for the second half of the year.
For example, the report says Shanghai’s municipal government will reduce some passenger-car purchase taxes and increase the quota of license plates for passenger cars by 40,000 this year. People who buy pure EVs will also get a subsidy of 10,000 yuan ($ 1,503).
In Shenzhen, the high-tech hub in South China’s Guangdong Province, buyers of qualified new energy vehicles who register them in the city can get a subsidy of up to 10,000 yuan per vehicle.
The Chinese government will encourage affordable EV and hybrid sales in rural areas. Local media have reported that a rural subsidy is likely, though Tuesday’s official announcement didn’t mention any. A rural push would help BYD, which has several low- to moderate-priced EVs and hybrids, but not Nio, Xpeng and Li Auto.
Tesla (TSLA) China production and sales likely rebounded in May after the Shanghai plant was shut down from March 28 to April 18. But Tesla Shanghai output is still not back to full capacity. Investors will get Tesla China production and deliveries data in a week or two.
Tesla stock slipped a fraction on Tuesday to 758.26, snapping a three-day positive streak. TSLA stock fell 1% early Wednesday. Shares are far below key levels.
Nio EV Sales
Nio delivered 7,024 vehicles in May, up 38% vs. April and nearly 5% vs. a year earlier. In April, sales plunged nearly 50% to 5,074, down 29% vs. April 2021
The company is opening up Nio stores in Shanghai, its biggest market, with deliveries starting there on June 2.
Nio will report Q1 results June 9. Earlier in May, Nio gave weak revenue and EV delivery guidance.
NIO stock rose more than 1% before the open on the stock market today. On Tuesday, shares advanced nearly 5% to 17.39, clawing back toward the 50-day moving average, according to MarketSmith chart analysis.
Xpeng EV Sales
XPeng delivered 10,125 vehicles in May. That was up 12.5% vs. April and 78% vs. May 2021. The EV maker delivered 9,002 vehicles in April, down 42% vs. March.
On May 23, Xpeng gave lackluster revenue and EV delivery guidance after losses and revenue both swelled in the first quarter, amid supply disruptions. Xpeng said then that it was expected to deliver 31,000-34,000 EVs in Q2, a 78% -95% year-over-year jump but below Q1 deliveries of 34,561 EVs.
XPEV stock climbed about 2% early Wednesday. Shares popped 4.4% to 23.50 on Tuesday, still below the 50-day line. XPEV stock has plunged more than 50% since hitting a high of 56.45 on Dec. 1, 2021, amid an overall decline among EV stocks.
Li Auto EV Sales
Li Auto delivered 11,496 Li One SUVs in May, up 176% vs. April 166% vs. a year earlier. The Li One is a hybrid, with a small gas engine as a range extender. In April, Li One deliveries dived 62% to 4,167 vs. March’s 11,034 and fell 25% below a year earlier.
Li last month predicted it would deliver 21,000-24,000 vehicles for the second quarter, an increase of 19.5% to 36.6% from Q2 2021. But May’s total suggests Li will easily top that forecast.
LI stock popped 3.3% on Tuesday to 25.07, after reclaiming its 50-day line on Friday.
Tesla Rebounds As China EV Rival Flashes Buy Signal
BYD EV Sales
Warren Buffett-backed BYD will likely report May sales on Friday. Last month BYD launched preorders for the Seal EV, a Tesla Model 3 competitor. The Seal will begin deliveries in the next couple of months.
BYD reported record sales of 106,042 EVs and hybrids in April, up 313% vs. a year earlier. The auto giant’s in-house chip and battery operations shielded it from supply-chain issues.
BYD is ready to buy six lithium mines in Africa, according to local media. That would provide enough lithium to satisfy its battery needs for a decade. BYD already has some investments in lithium operations.
BYDDF stock is not yet active Wednesday. It added 2.5% to 35.69 on Tuesday. Shares are in a deep cup base with a 41.34 buy point. BYD stock is still in range from an early entry of 34.60.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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