China EV stocks rise above key level as Great Overhang begins to lift

China EV stocks rise above key level as Great Overhang begins to lift

Sales of electric vehicles in China are expected to increase in a seasonal November, with Nio (NIO) is poised to rebound as supply headwinds ease and new models surge. XPeng (XPEV) surged on Wednesday, driving Chinese electric vehicle stocks sharply higher after a better-than-expected fourth-quarter delivery outlook. More signs emerged on Wednesday of a shift in China’s ultra-tough Covid policy, which has weighed on automakers.


On December 1, Nio, XPeng and their Chinese counterpart start electric vehicles Li-Auto (LI) are expected to report November sales. The Chinese electric vehicle giant BYD (BYDDF) should follow in a few days.

All of these electric vehicle manufacturers are increasingly in competition with You’re here (TSLA) in the world’s largest electric vehicle market.

NEV retail sales are expected to hit 600,000 in November, according to estimates from the China Passenger Car Association. That would be up 58.5% from a year ago and also about 8% from October. Unlike BYD, the startups all saw their October sales fall from September amid the shutdowns.

“New Energy Vehicles,” or NEVs, include all-electric, hybrid-electric, and fuel-cell vehicles.

“Historically, car sales in China have risen sharply in the last few months of the year,” Deutsche Bank analyst Edison Yu wrote in a Nov. 25 note. He expects new models, including the Nio ET5 and the Li L8 and L9, to boost November sales.

The country’s electric vehicle subsidies are set to expire at the end of the year, which could push some of the demand forward.

Chinese electric vehicle stocks surged on Tuesday and climbed further on Wednesday. Local authorities continued to relax some ‘zero-Covid’ rules on Wednesday after protests against the policy erupted in several towns over the weekend. China’s top leaders are also pushing for a more “targeted and precise” approach to the fight against the coronavirus, local media said.

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See you Thursday for the November results. In October, Nio delivered 10,059 electric vehicles, down 7.5% from September but up 174% from a year earlier.

Investors will be watching the November ET5 numbers in particular. Lockdowns and supply issues dampened October volumes of the new sedan, a Tesla Model 3 rival.

Deutsche Bank’s Yu predicts that Nio will deliver a record 13,500 EVs in November, up 34% from October, and 19,500 EVs in December.

Nio itself guided record fourth-quarter shipments on Nov. 10, while posting a worse-than-expected third-quarter loss.

It expects to deliver 43,000 to 48,000 electric vehicles in the fourth quarter, up 72% to 92% from a year earlier. It would also be up 36% to 52% from 31,607 electric vehicle deliveries in the third quarter.

These deliveries will include a small but growing number of European sales. Nio has extended deliveries from Norway to several European countries.

Nio stock jumped 17.3% to 12.31 in trading today, breaking above its 50-day intraday line. Shares of Nio and its China EV peers remain below the 200-day line after falling over the past year.

XPeng Sales

Check back later for November results. XPeng sold 5,101 electric vehicles in October, down nearly 40% from September, continuing a rapid deterioration in month-on-month sales.

Early Wednesday, XPeng reported a bigger-than-expected third-quarter loss of 39 cents per ADR share. Revenue rose 19.3% to RMB 6.82 billion, or $959.2 million.

It forecast fourth-quarter deliveries of 20,000 to 21,000 electric vehicles, down about 50 to 52 percent from a year earlier and down significantly from 29,570 in the third quarter. With October shipments underway and November sales likely similar, this implies that XPeng shipments will rebound to around 10,000 in December.

Deutsche Bank’s Yu had forecast XPeng to deliver 19,500 electric vehicles in the fourth quarter. New models, such as the G9 SUV, are growing slowly, while some older models are being phased out, he said.

XPeng stock soared more than 36% at 10:01 a.m. Wednesday, breaking above its 50-day line. Shares jumped 6.5% to 7.34 on Tuesday.

On Wednesday, the southern Chinese city of Guangzhou, where XPeng is based, eased Covid-19 restrictions in various districts. Other major Chinese cities, including Shanghai and Zhengzhou, home to the world’s largest iPhone factory, also said on Wednesday they were lifting Covid lockdowns.

Auto Sales Li

Check back later for November results. Li Auto sold 10,052 vehicles in October, down 13% from September and up 31% from a year earlier.

Li Auto experienced slight delivery delays for some new L8 and L9 models due to parts shortages in November, according to local media. But weekly record data suggests that Li Auto will easily exceed 10,000 deliveries.

Li began L9 SUV deliveries on August 30 and L8 deliveries on November 10. He gradually phased out his original One model.

On December 9, Li Auto will release its third-quarter results before the market opens. It is also expected to give a delivery estimate for the fourth quarter at that time.

Li Auto’s stock jumped 16% to 21.53 on Wednesday, returning above a 50-day long slippery line. Shares climbed 8.7% to 18.53 on Tuesday.

WORLD of sales

Check back later for November results. In October, BYD sold a milestone of 103,157 all-electric electric vehicles, up 150% from a year ago. It sold 217,816 all-electric and hybrid-electric vehicles, combined, in October.

BYD is on track to sell nearly one million all-electric vehicles in 2022.

Exports remain a small share of total sales but are growing rapidly. The Warren Buffett-backed electric vehicle maker has a massive international expansion underway. On Tuesday, BYD announced that it will enter the personal electric vehicle market in Mexico next year.

On December 9, BYD is preparing to launch the Frigate, a hybrid SUV. This will add to a slew of new electric vehicle launches. The BYD Seal, a Tesla Model 3 rival, was launched in late August.

BYDDF stock jumped 7.7% to 50.21, returning above its 50-day line for the first time since early August. Shares jumped 5.2% on Tuesday. BYD trades over-the-counter in the United States

Tesla Stock

Tesla isn’t reporting China-only sales, but weekly record data suggests a strong month for local sales in China. A late-October price drop and various other incentives, along with Tesla’s sharp production ramp-up and soon-to-expire Chinese subsidies for electric vehicles, are likely contributing factors.

Tesla stock rose 1.1% during the day. On Tuesday, shares fell 1.1%, trading below major major averages.

Sales of electric vehicles in China

The Chinese electric car market remained hot in the first 10 months of 2022, despite headwinds.

Over that period, NEV sales soared 110%, while the broader passenger car market grew just 14%, according to data from the China Association of Automobile Manufacturers. In October alone, all-electric sales in China jumped 70% to 508,000.

“Over the past 10 months, the (NEV) segment has recorded seven triple-digit monthly growths on a year-on-year basis, supported by strong underlying demand and fiscal incentives offered by the government,” analysts said. Deutsche Bank in their November report. 25 grades.


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