BYD has just slashed prices on the updated versions of its Han and Tang EV models that come with upgraded driver-assist features among other tech upgrades, after similar cuts across other models previously, while its closest competitor Tesla has further discounted its selling price of Model Y after earlier cuts in that model as well as Model 3 in the Chinese market. These moves are taking the price war into both ends of the EV market: budget and mid-to-high end, so that no market segment is now spared from the prevailing price war that has been raging for the past 1-2 years.
After strong results and optimistic outlook from $LI AUTO-W(02015)$ this week, $NIO-SW(09866)$ will be releasing its earnings results for the fourth quarter and full year of 2023 on 5 March before the US stock market opens, followed by $XPENG-W(09868)$ on 19 Mar. With the raging price war, focus will be on the gross margins of the EV makers and their guidances for future deliveries. With weakening demand and intense price wars, I do not share the optimism on the Chinese EV market and believe that there will be more pain ahead for the EV makers.
Alibaba has a turbulent year last year that was marked by major corporate restructuring, scrapping of its cloud business spin-off and stepping down of its former CEO. Alibaba will be in need of some catalysts to propel its share price. Meanwhile, Alibaba's losses may present opportunities for its competitors $Sea Ltd(SE)$ and $JD.com(JD)$ as they capitalise on Alibaba's loosening grip of the market leadership to build their market shares. As they gain traction and popularity among e-commerce users, they are sure to give Alibaba a hard run of its money. Hence, I'm optimistic that their earnings results will bring back cheers to the e-commerce arena when Sea and JD.com report their earnings results on 4 March and 6 March respectively before the US market opens, In fact, with their stocks trading near multi-year lows, risk/reward ratios of the duo are are looking increasingly tempting.
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