Nio was able to increase its electric vehicle shipments in August versus July. However, competitors Li Auto and Xpeng saw a sharp drop in deliveries. Electric vehicle players are still facing supply chain disruptions due to the resurgence of COVID in China as well as weak consumer demand due to the difficult economic environment in the country.
Publishing in the future | Publishing in the future | Getty Images
Inventories of Chinese electric car makers Nio, Li Auto and Xpeng tumbled Thursday after the latter two companies reported sharp declines in vehicle deliveries in August.
Here are the August delivery numbers for the three companies:
- Lee Otto: 4,571 vehicles were delivered in August, down 56% compared to July’s count of 10,422 vehicles. This number is also down 51% year over year.
- Xpeng: 9,578 cars were delivered in August, down 16% compared to July’s count of 11,524 cars. However, this represents a 33% increase year over year.
- New10,677 vehicles were delivered in August, an increase of 6% compared to July’s number of 10,052 vehicles. That was also up 81.6% year over year.
Nio was the only company that grew month-over-month in August, but the US-listed shares of the EV company closed down 5%. Li Auto shares are down 3% while Xpeng shares are down more than 6%.
In morning trading on Friday, Hong Kong-listed Nio and Li Auto shares fell 0.6% and 0.3%, respectively. Xpeng shares in the city fell 2%.
The Chinese economy faces a number of challenges, including the resurgence of Covid-19 that has seen major cities like Shanghai shut down. In the past few days, the China Tech Center in Shenzhen, imposed restrictions on Covid, and on Thursday, the mega-city of Chengdu was closed.
While some cities have reopened, consumer sentiment remains fragile and uncertainty reigns as a result of China’s “zero COVID” policy.
The world’s second largest economy is also facing an energy crisis affecting electric car charging stations. Last month, Tesla and Nio suspended some of their charging services.
These issues are filtered down to electric vehicle sales.
Bill Russo, chief executive of Shanghai-based Automobility, told CNBC that the numbers “reflect lingering supply chain issues as well as the fact that they are at the upper end of the price range and with the economy weakening, people are looking toward affordability and this is putting pressure on some of the higher models.” pricey.”
Last month, Xpeng said it expects to deliver between 29,000 and 31,000 electric vehicles in the third quarter of the year. This directive disappointed investors.
Xpeng President Brian Gu said the guidance reflects the fact that the industry is entering a “relatively slow season” and that shop traffic is less due to the Covid situation.
Yanan Xin, president of Li Auto, said in an earnings call last month that the Covid outbreak had “severely affected” the company’s supply chains, and that there were “disruptions and difficulties” remaining.
Shen also said there is a slowdown in demand for its flagship Li One sports car.
Li Auto started delivering its new L9 to customers at the end of August. The company said it plans to launch and deliver a large SUV called the Li L8 in early November. That could affect Li One’s sales, according to Russo.
“Li has launched major new products with L9 and L8 which also affects consumer demand for Li One. When new products appear, the demand for old model is often affected,” said Russo.
To stimulate demand, China said last month it would extend the tax credit for new energy vehicle purchases until the end of 2023.
The competition continues to heat up in the electric vehicle market in China. Along with the new Li Auto vehicles, Xpeng plans to start deliveries of its new G9 SUV in October and launch two new vehicles next year.