China EV sales boomed in the second quarter for the country's emerging automakers, but signs point to fresh Covid headwinds on production.
Xpeng outsold Nio and Li Auto, with a strong June capping a volatile quarter for the startups.
EV sales more than tripled in June and Q2 for homegrown giant BYD. Archrival Tesla reported a significant decline in Q2 output and deliveries.
Li Auto and Xpeng rose solidly Tuesday, Nio stock and BYDDF stock lagged somewhat amid reports of a Covid outbreak in Anhui province, where both have significant operations. Nio announced a virtual Nio Power Day July 6.
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BYDDF Stock
BYD on Sunday reported it sold 134,036 new energy vehicles — EVs and plug-in hybrids — in June, up 224% vs. a year earlier and almost 17% above May's 114,943.
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.
Shares, which trade over the counter in the U.S., edged up 0.3% to 40.20 Tuesday. BYDDF stock undercut a 39.81 cup-with-handle entry in intraday trade. Its relative strength line has surged to highs.
Warren Buffett-backed BYD has significant operations in Hefei, the capital of Anhui, including a new EV assembly plant.
Nio Stock
Nio sold 25,059 EVs in Q2, 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.
Shanghai-based Nio was hit especially hard by Covid lockdowns in China.
The June total includes 4,349 ET7s, the luxury sedan launched in late March. Nio is launching two more EVs in the coming months.
Shares rose 3.8% to 22.84 in the stock market today, after sliding 11% last week. Nio stock jumped 25% in June, recovering the 50-day moving average, but remains 60% below the 52-week high.
On Tuesday, various publications reported a fresh Covid-19 outbreak in eastern Anhui Province, challenging China's "zero Covid" policy again. Nio vehicles are made in Anhui's Hefei.
The startup also announced an online Nio Power Day July 6. It is expected to provide an update on its EV battery strategy and battery rental service.
Nio also announced it has reached 10 million battery swap services and 998 battery swap stations. It has previously discussed plans to start producing its own battery packs in 2024.
Xpeng Stock
Xpeng sold 34,422 EVs in Q2, 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.
Alibaba-backed Xpeng plans to start preorders for the G9 in August, and to start deliveries in September. The G9 is its flagship new electric SUV. It currently sells the P7 and P5 electric sedans, as well as the older G3 SUV.
XPEV stock gained 6.1% Tuesday, rebounding from its 21-day line, after tumbling 14% last week. Xpeng stock leapt 35% in June, while continuing well off highs.
Li Auto Stock
Li Auto sold 28,687 EVs in Q2, 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 sells the Li One, a hybrid-electric SUV, and unveiled the L9 in June after Covid delays. The new L9, also a hybrid SUV, garnered 30,000 orders in 72 hours, the company announced June 24.
L9 deliveries should start in late August, with sales of 10,000 seen in September. But challenges remain.
Parts suppliers have gradually resumed production but have yet to fully recover, Li Auto warned June 1.
Li Auto stock jumped 6.1% to 40, once again extended from a 37.55 buy point from a consolidation going back to last December. Li Auto slid nearly 8% last week after saying it will raise up to $2 billion by selling new stock, to fund growth initiatives.
LI stock vaulted 53% in June and is far extended from moving averages.
Tesla Stock Falls Amid Weak Q2 Deliveries
China EV Sales
On June 1, Nio and Xpeng gave strong Q2 delivery targets. Supply chains and production lines are recovering from fresh Covid lockdowns in Shanghai and other cities, the EV startups said at the time.
China EV sales rebounded in May and June after diving in April vs. March. Local governments have responded to a potential slowdown with cash EV subsidies to spur sales, including Shanghai, Beijing and Shenzhen.
But last week, some Wall Street firms cut EV delivery estimates for Nio, Tesla and others, citing continued Covid lockdowns and supply disruptions.
