China Stock Pops On EV Milestone But Rival Takes July Sales Crown – Investor's Business Daily

China Stock Pops On EV Milestone But Rival Takes July Sales Crown - Investor's Business Daily
Written by admin sati

Xpeng (XPEV) outpaced Li Auto (LI) and Nio (NIO) again in China EV sales for July. But Nio stock and LI popped, with Li Auto stock leading gains as it announced the 200,000th Li One EV rolled off the assembly line Monday, achieving that milestone at “record” speed vs. other Chinese EV startups.

All three startups on Monday reported that China EV sales rose sharply in July from a year ago, though down considerably vs. a strong June. Nio lags Xpeng sales both in July and year to date, but it sees EV production improving as supply headwinds ease.

Chinese EV giant BYD (BYDDF) also reports July sales in early August, amid hopes for another huge month.

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Nio Stock

Nio delivered 10,052 electric vehicles in July, jumping 27% vs. a year earlier but down 22% vs. June.

July sales included 7,579 SUVs and 2,473 sedans. Nio didn’t break down model-specific deliveries for the first time. But it suggested newer models were hurt by supply disruptions amid a Covid resurgence in that country.

“The production of the ET7 and the EC6 in July 2022 was constrained by the supply of casting parts,” Nio said in Monday’s release. However, Nio added it’s working closely with supply-chain partners and expects production to accelerate in the rest of the current quarter.

Shanghai-based Nio was hit especially hard by Covid lockdowns, with sales generally lagging those of its startup peers so far this year.

In the first seven months of 2022, Nio has sold 60,879 EVs.

On Monday, Nio also announced 1,047 battery swap stations in China and more than 10 million battery swaps. It will release two new models in the third quarter.

Nio stock rose 4.9% in Monday’s stock market action, rallying further above the 50-day moving average. Shares are still below their falling 200-day lines.

U.S.-listed China EV stocks, including Nio, have lagging relative strength lines. Most rallied in May and June, but tumbled in July as U.S. delisting fears rear up again.

Xpeng Stock

Xpeng delivered 11,524 EVs in July, leaping 43% vs. a year earlier to 11,524 but down 25% from June. July sales included 6,397 P7 sedans, 3,608 P5 sedans and 1,519 G3i compact SUVs.

Year to date, Xpeng has sold 80,507 EVs, more than doubling year over year. In a release Monday, Xpeng claimed the No. 1 rank among emerging China auto brands in terms of EV sales in 2022 thus far.

The automaker will launch a new electric SUV, the G9, in September.

Xpeng stock gained 0.7% Monday, significantly below its 50-day average.

Li Auto Stock

Li Auto delivered 10,422 Li One hybrid SUVs in July, up 21% vs. a year earlier but down 20% vs. June.

“Today, the 200,000th Li One rolled off the production line,” with the company’s Monday’s release touting its “record” production speed among Chinese EV startups. In fact, Li Auto reached that production milestone in less than three years after it started volume production. By comparison, the 200,000th Nio vehicle rolled off the assembly line in April, reaching that milestone in less than four years. Li Auto also claimed to have reached the 100,000-unit mark at record speed.

Li did not provide a year-to-date delivery number.

The automaker on Monday announced more than 50,000 orders for the L9 SUV, with more than half of those nonrefundable. The L9, Li’s second model, launched in June and goes on sale in late August. Among popular features, the L9 boasts a self-developed autonomous driving system, the company says.

Li Auto stock popped 6.5% Monday, rebounding strongly from its 50-day line after just holding that key level on Friday. LI stock appears to be working on a new consolidation.

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Check back for July sales. 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.

There are unconfirmed reports that suggest BYD sales last month easily topped June’s record 134,036 and roughly tripled vs. a year earlier.

On Monday, BYD announced its entry into Germany and Sweden, after entering Japan in July, local media reports said. The company continues to expand internationally, sharpening its rivalry with Tesla.

Amid challenges, Chinese startups continue to grow EV sales at a robust pace. But the most impressive gains keep coming from homegrown giant BYD, which is backed by investing legend Warren Buffett.

On July 29, BYD launched the Seal EV, seen as a rival to the Tesla (TSLA) Model 3. The Seal 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.

China is the world’s fastest-growing market for electric cars.

The Tesla vs. BYD rivalry is poised to intensify. Both China auto giants and startups are growing their EV lineups and international footprint.

BYD stock rose 4% to 37.80, just reclaiming its 50-day line.

TSLA stock climbed 2% Monday, just above its 200-day line. Tesla 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.

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 in late July.

But that would be down 15% from a record June, when new subsidies and pent-up demand from lockdowns spurred sales.

Booming EV giant BYD likely accounted for a big share of NEV sales last month.

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, while China’s economy is still showing strain.

The latest Chinese media reports suggest that the EV supply chain is stabilizing, though Nio cited parts shortages for limiting production of its ET7 luxury sedan.

Meanwhile, a state council meeting confirmed a renewal of the purchase tax exemption for electric vehicles, according to a CnEVPost report late Friday. The exemption was set to expire at the end of 2022.

Beijing had strongly hinted at such a move in recent months.


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