$XPeng Inc.(XPEV)$, $NIO Inc.(NIO)$ and $Li Auto(LI)$ are gearing up to report China EV sales for July before Monday's U.S. stock market open. Chinese EV giant BYD (BYDDF) also reports July sales in early August, amid hopes for another huge month.
Nio stock and its startup peer Xpeng reversed higher amid subsidy news Friday. A state council meeting confirmed a renewal of the purchase tax exemption for electric vehicles, according to aCnEVPost reportlate Friday. The exemption was set to expire at the end of 2022. Beijing had strongly hinted at such a move in recent months.
China EV Sales Set To More Than Double
Retail sales of so-called new energy vehicles (which include fully electric, hybrid plug-ins and fuel-cell EVs) in China are expected to reach around 450,000 units in July, increasing 102.5% year over year, based on preliminary estimates from the China Passenger Car Association.
But July sales would be down 15% from a record June. Reports in early July spoke of a Covid outbreak in Anhui province, where Nio and BYD have major operations. Newer reports suggested that severe heat weighed on store visits and test drives in July.
Strong June sales capped a volatile Q2 for China EV makers. Li Auto said in June that parts suppliers have gradually resumed production but are yet to fully recover from a chip shortage and other shortages, which hit April sales.
The latest Chinese media reports suggest that the EV supply chain is stabilizing.
China EV Stocks Reverse Higher
Nio stock rose 1.2% to 19.73 in Friday'sstock market action, closing at session highs after reaching as low as 18.66. Xpeng also turned higher and closed at session highs, rising 0.7%. Highly ratedIBD 50 stockLi Auto dipped 0.3% Friday, but held above its 50-day line. BYDDF lost 2.2%, off session lows but below the 50-day.
U.S.-listed China EV stocks have fallen below their 50-day moving averages and theirrelative strength linesare lagging. Most rallied in May and June, but they have tumbled again in July as U.S. delisting fears rear up again.
In contrast,Tesla stockis well above the 50-day average and its RS line is improving. TSLA stock jumped 5.8% to 891.47 on Friday. Shares leapt 9.15% for the week after surging 13.4% in the prior week on strong Q2 earnings.
Nio Stock
The once-hot China EV stock and its peers face a high bar for July sales. Check back for results.
In Q2, Nio sold 25,059 EVs, up 14% year over year. That included 5,074 EV deliveries in April, 7,024 in May and a record 12,961 in June, up 60% from a year earlier. The Q2 EV deliveries were just above its forecast range but down slightly from Q1.
On Saturday, Nio's CEO said that a "bottleneck" in parts prevented July production of its flagship ET7 luxury sedan from increasing from June's 4,349.
Shanghai-based Nio was hit especially hard by Covid lockdowns.
Nio will release two new models in the third quarter.
Xpeng Stock
For Q2, Xpeng sold 34,422 EVs, nearly doubling year over year. That included 9,002 EV deliveries in April, 10,125 in May and 15,295 in June, the best month since December and more than doubling from a year earlier. The Q2 EV deliveries were just above its forecast range but down slightly from Q1.
Xpeng will release a new electric SUV later this year.
Li Auto Stock
In Q2, Li Auto sold 28,687 EVs, up 63% year over year. That included 4,167 EV deliveries in April, 11,496 in May and 13,024 in June, up 69% vs. a year earlier. The Q2 EV deliveries were well above its forecast range but down significantly from Q1.
Li Auto will begin deliveries of its premium L9, its second hybrid SUV, in late August.
BYDDF Stock
For Q2, BYD sold 355,021 NEVs, up 256% from a year earlier and 24% above Q1's 286,329. That was far above Tesla's 254,695, though the U.S. EV giant still leads in all-electric vehicles.
A Covid-19 resurgence hit Chinese EV supply chains and manufacturing earlier this summer. It's unclear what the current state of recovery is, though local media reports suggest the situation is stabilizing.
Amid challenges, the startups continue to grow EV sales at a robust pace. But the most impressive gains keep coming from BYD, which is backed by investing legend Warren Buffett.
On July 29, BYD launched the Seal EV, seen as a rival to the the Tesla Model 3. China is the world's fastest-growing market for electric cars. TheSeal reportedly undercuts the Model 3 in price, starting at RMB 209,800 ($31,130) vs. RMB 279,900 ($41,502) for Tesla's small sedan.
TheTesla vs. BYD rivalry is poised to intensify. Both China auto giants and startups are growing their EV lineups and international footprint.
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