Nio stock and Tesla’s China rivals rallied Monday on an EV subsidy report after April sales cratered due to Covid-19 lockdowns. child (CHILD) also signaled headwinds are easing and affirmed a new electric vehicle remains on track for a September launch.
Nio’s April sales fell 49% vs. March, the EV startup reported Sunday. That compared to declines of 42% for Xpeng (XPEV) and 62% for Li Auto (LI), after both Nio rivals flagged production and delivery concerns earlier in April. Chinese EV giant BYD (BYDDF), seemingly less affected, will likely follow a couple days later.
China’s local governments are “likely to reintroduce cash subsidies” to increase sales of electric vehicles (EVs) after the savage Covid-19 hit to April sales, South China Morning Post reported Monday, citing analysts. Sources at car manufacturers and dealers also told the publication that they are lobbying local governments to follow Guangdong province, which spearheaded such a move.
Chinese EV makers are emerging rivals to Tesla (TSLA). China EV sales boomed 169% in 2021 and stayed hot in the first quarter of 2022. That changed in April.
Nio EV Sales
Nio delivered 5,074 vehicles in April, off 49% from March and down 29% vs. a year earlier. Production was shut down for part of the month as new Covid-19 outbreaks hit suppliers’ output and shipments.
“The vehicle production has been recovering gradually,” Nio said in Sunday’s release. It’s working with supply partners “to accelerate the recovery of production to its full capacity.”
April’s tally included 693 ET7s, the first full month of deliveries for Nio’s first EV sedan. On April 29, the first batch of “tooling trial builds” of the smaller ET5 electric sedan rolled off assembly lines and Nio expects to start deliveries in September, it said.
Nio also has there electric SUVs, with a fourth coming in a few months.
Nio stock fell 2.8% last week to 16.70. Shares rose nearly 4% on the stock market todaystill below the falling 50-day moving average.
Xpeng EV Sales
Xpeng delivered 9,002 vehicles in April, down 42% from March but up 75% vs. a year earlier.
That backs up Deutsche Bank analyst Edison Yu, who wrote on April 27 that Xpeng had been less affected by Covid lockdowns than other China EV startups. Yu noted that Xpeng’s supply chain management also appears more resilient than those of its startup peers.
The company is “continuing to actively navigate through the Covid situation, which in turn is affecting the overall supply chain, manufacturing and transportation of automobiles in China,” Xpeng said in Sunday’s release. It reports first-quarter earnings on May 23.
In mid-April, Xpeng CEO He Xiaopeng warned that all automakers might have to suspend production in May if lockdowns didn’t ease, Reuters reported. Soon after that, Shanghai did allow manufacturers, including Tesla, to resume operations with staff living on site in a “closed loop.”
Xpeng stock rose 3.1% last week to 24.61. XPEV stock gained 3.5% Monday, still below a fast-falling 50-day line.
Li Auto EV Sales
Li Auto delivered 4,167 Li One hybrid SUVs, down 62% vs. March’s 11,034 and 25% below a year earlier. Many suppliers completely shut down, severely affecting vehicle production, Li said in Sunday’s sales release.
“At present, we are working with our supply chain partners to restore production capacity, aiming to shorten the delivery waiting time for Li One users, while meeting all pandemic prevention and containment requirements,” Yanan Shen, co-founder and president of Li Auto , added. The company reports for Q1 May 10.
Li President Yanan Shen warned of a production hit earlier in April, apologizing for delivery delays. The startup delayed the April 16 unveiling of its second EV model, the L9 SUV.
Li Auto stock edged up 0.45% last week to 22.43, but is below key moving averages. Shares rose 3% Monday.
BYD EV Sales
EV and battery giant BYD will report April sales in early May, possibly Tuesday.
BYD, which makes its own chips and batteries, could be more insulated from supply snarls.
In March, BYD sold a record 104,878 electric and hybrid vehicles, up 333% vs. a year earlier and up 20% from February. Fully electric sales jumped 229% and plug-in hybrid sales vaulted 615%.
In April, Warren Buffett-backed BYD shifted to producing only hybrid and electric vehicles, ditching pure gas and diesel cars. remarkably, BYD’s Q1 hybrid and EV sales nearly equaled Tesla’s all-electric sales. They will almost certainly be No. 1 in Q2, with Tesla Shanghai shut down for much of April and still operating below normal levels.
BYD is due to release several new EVs and hybrids in the coming months. The BYD Seal is expected to be a big Tesla Model 3 rival, but with longer range, faster acceleration — and for $10,000 less.
BYD stock dipped 0.85% last week to 29.02, but rebounded to close back above its 50-day moving average. Shares climbed 1.3% Monday.
Tesla does not report monthly sales, but industry trade data will reveal the EV giant’s China sales later in May. There are indications that Tesla was among the hardest hit in China, given its sole plant in Shanghai. But it has the Fremont, California, plant, with the Berlin and Austin facilities slowly picking up output.
Tesla stock plunged 13.4% to 870.76 last week, diving below its 50-day and 200-day moving averages. TSLA stock rose 2% on Monday.
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