Mohit Oberoi
Chinese EV companies including NIO (NYSE: NIO), Li Auto (NYSE: LI), and Xpeng Motors (NYSE: XPEV) have released their February delivery report. Here are the key takeaways.
To begin with, we should understand the numbers might not be strictly comparable to the last year when the Lunar New Year fell in February. This year, the Lunar New Year Holidays fell in January which took a toll on Chinese EV companies’ January deliveries.
NIO delivered 12,157 cars in February—a YoY rise of 98.3%. NIO delivered 8,506 cars in January which was below the 9,652 cars that it delivered in the corresponding month last year.
The company’s cumulative deliveries reached 310,219 at the end of February. This year, NIO has hit the new milestone of delivering its 300,000th car. It reached the corresponding production milestone in December 2022. In April 2021, the company hit the milestone of producing its 100,000th car.
Last year, Baillie Gifford also increased his stake in NIO. Many analysts see NIO as a worthy competitor to Tesla. There is a guide on how to buy NIO stock.
NIO has also started selling cars in international markets. It forecast Q1 2023 deliveries between 31,000-33,000, which would imply a YoY growth between 20.3%-28.1%. The top end of the guidance implies deliveries of 12,337 cars in March.
Xpeng Motors Continues to Disappoint with its Deliveries
Xpeng Motors meanwhile continues to disappoint with its delivery report. It delivered 6,010 vehicles in February which it said was 15% higher than in January. However, its deliveries fell as compared to February 2022 when it had delivered 6,225 cars. The company’s cumulative deliveries reached 269,308 at the end of February.
For two consecutive months now, Xpeng Motors’ deliveries have come below 10,000. The company has been looking to increase sales to Europe and said that it has opened a second retail store in both the Netherlands and Denmark.
It added, “in parallel with efforts to accelerate market share gains domestically, the Company continued to extend its presence in international markets.”
Meanwhile, looking at its delivery report, it seems to be losing market share in China also. XPEV stock has underperformed peers over the last year amid dismal execution.
Last year, Li Auto outperformed both NIO and Xpeng Motors. It is now the second most valued Chinese EV company after market leader BYD. NIO comes third while Zeekr is at number fourth followed by Xpeng Motors.
Li Auto Outsold NIO in February 2023
In 2022, Li Auto outsold both NIO and Xpeng Motors. The trend has continued in 2023 as well and in February also the company sold more vehicles than both of them.
Li Auto delivered 16,620 vehicles in February, a YoY rise of 97.5%. The company’s deliveries also increased on a sequential basis. Its cumulative deliveries reached 289,095 at the end of February. It has already surpassed Xpeng Motors in terms of cumulative deliveries and is not looking set to surpass NIO as well.
Li Auto forecast deliveries between 52,000-55,000 in the first quarter of 2023. It has already delivered 31,761 cars in the first two months of the year and the top end of the guidance implies deliveries of 23,239 cars in March, which would be a new monthly high for the Chinese EV company.
NIO Stock Pares Gains on Wider Than Expected Q4 Loss
While NIO was trading sharply higher in Hong Kong trading today, it is only about 2% higher in US premarket price action. Along with the deliveries, NIO also released its Q4 2022 earnings today where it posted a wider-than-expected loss.
Its gross margin also plummeted to a mere 3.9% in the quarter as compared to 17.2% in the corresponding quarter in 2021.
Rivian, which posted its earnings aftermarkets yesterday, also posted a massive net loss and cash burn in Q4 2022. Its 2023 production guidance also trailed estimates and raised demand fears.
It forecast a gross loss in 2023 also but said that it would start generating positive gross margins in 2024.
From 2025, Rivian expects its cash burn to come down significantly. For now, markets have given a thumbs down to its Q4 2022 earnings and the stock is down sharply in premarkets today.
Morgan Stanley analyst Adam Jonas, a prominent Tesla bull, advises buying Tesla and Rivian while selling Lucid Motors and Fisker.
Notably, last week, Lucid Motors reported disappointing earnings and provided tepid guidance for 2023 production. The stock has held off relatively well in 2023 though on rumors that Saudi Arabia might acquire the company.
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This article was written for Business 2 Community by Mohit Oberoi.
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