Caixin
Jul 02, 2021 08:17 PM

China’s Electric-Vehicle Majors Post Record Sales

An electric car is on display at an industry event in Shanghai in April 2019. Photo: VCG
An electric car is on display at an industry event in Shanghai in April 2019. Photo: VCG

China’s three U.S.-listed electric vehicle (EV) manufacturers have reported record numbers of monthly and quarterly deliveries, as the heavily money-losing firms jostle for larger slices of the booming domestic market ahead of an expected series of homecoming listings.

Nio Inc., the Asian nation’s main challenger to industry frontrunner Tesla Inc., delivered an all-time high of 8,083 vehicles in June, representing year-on-year growth of 116%, the company said in a statement on Thursday. Its second-quarter sales rose 112% to 21,896 units.

Rival Li Auto Inc. said on Friday that it moved 7,713 units of its only model, the Li One SUV, last month and 17,575 units in the three months through June, marking year-on-year rises of 321% and 166% respectively. Xpeng Inc. saw monthly deliveries leap 617% to 6,565 vehicles and quarterly deliveries jump 439% to 17,398 units.

The strong sales figures come as Xpeng prepares for a new share offering in Hong Kong next week, a step that the other two automakers are expected to emulate in an effort to hedge against the risk of being kicked off American bourses.

But the three companies remain overshadowed by market leader Tesla, which delivered (link in Chinese) 33,463 vehicles in China in May, according to the China Passenger Car Association (CPCA). Tesla does not release its own figures for the China market.

The numbers suggest that the U.S. automaker has sustained little reputational damage in China despite a series of public relations headaches, although its June sales figures — which have not yet been released — will likely be closely watched after the Chinese government ordered the company to update the software in some 285,000 cars in order to fix a safety issue.

China’s fast-growing EV sector is expected to expand by 51% this year to make up nearly one-tenth of all cars sold in the world’s second-largest economy, according to a February report by research firm Canalys.

None of the three Chinese automakers have ever made a profit. While Nio’s losses shrank by 73% year-on-year to 451 million yuan in the first quarter, Li Auto’s ballooned by 367% to 360 million yuan and Xpeng’s increased by 21% to 787 million yuan, according to the companies’ most recent earnings reports.

Nio’s bestselling model last month was its five-seat electric ES6 SUV, which shifted 3,755 units, the Shanghai-headquartered carmaker said. It delivered 2,860 units of its five-seat EC6 coupe SUV and 1,498 of its flagship six- or seven-seat ES8 SUVs.

Li Auto’s president and cofounder Shen Ya’nan said the company’s sales uptick reflected “strong user endorsement” for its newly updated Li One. The Beijing-based carmaker said it also took a record of more than 10,000 new orders for the plug-in electric hybrid last month.

Xpeng said the delivery of 4,730 of its flagship P7 sedan last month reflected the model’s “rising popularity among China’s tech-savvy consumers.” The Guangzhou-based firm also sold 1,835 units of its compact G3 SUV and plans to launch a newly face-lifted version next month.

Earlier this week, Xpeng set a guideline issue price of HK$165 ($21.24) per share for institutional investors ahead of its planned dual primary listing in Hong Kong, valuing the flotation at just over HK$14 billion. That would make it the fifth-largest new offering on the exchange this year.

All three of the Chinese companies’ U.S.-listed equities are on the rise again after a spring slump driven by worries over inflation, competition from traditional carmakers and a global shortage of semiconductors, which power many of the world’s electric vehicles.

Nio’s share price has risen by a quarter since the start of May, while Li Auto’s has soared by more than 70% and Xpeng’s by around half. The ballooning stocks have led some investors to warn that EV firms and those in adjacent industries may be overvalued.

New York-listed Nio sank by 4.32% on Thursday to close at $50.90 per share. Xpeng, which is listed on the same bourse, declined by 1.71% to $43.66. Nasdaq-listed Li Auto slipped 0.72% to $34.69.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)

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