Mohit Oberoi
Chinese EV (electric vehicle) companies including NIO (NYSE: NIO), Xpeng Motors (NYSE: XPEV), and Li Auto (NYSE: LI) have released their January delivery reports. Here are the key takeaways.
While Tesla and most other US EV companies release their deliveries on a quarterly basis, Chinese EV companies release them monthly. In December, Chinese EV companies had impressed with their delivery report.
Tesla on the other hand disappointed markets with its Q4 2022 deliveries as its full-year growth fell well short of the 50% that it was initially targeting.
NIO, Xpeng Motors, and Li Auto are trading higher in early US price action today as markets give a thumbs up to their January delivery reports.
NIO Delivered 8,506 Cars in January
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 298,062 at the end of January. The company leads both Li Auto and Xpeng Motors in terms of cumulative deliveries.
In January, NIO delivered 6,316 sedans and 2,190 SUVs. In its release, NIO said, “From January 13, 2023 to January 31, 2023, the peak travel season around the Chinese New Year Holiday, NIO provided over 1 million power swaps to its users.”
The company did not provide any update on the delivery guidance for the first quarter. The company might eventually do so at the upcoming earnings release.
NIO lost 65% last year which was similar to Tesla’s decline. However, while Tesla’s sell-off gained momentum towards the end of the year, NIO recovered smartly from its 2022 lows.
Recently, 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.
Xpeng Motors Also Reported a Fall in January deliveries
Xpeng Motors delivered 5,218 cars in January. The company’s deliveries were less than half of the 11,292 cars that it delivered in the corresponding month last year. Here it is worth noting that Chinese EV companies suffered from negative seasonality in 2023 as the Lunar New Year Holidays fell in January this year.
The country’s economic activity invariably comes down during the Lunar New Year holidays and many manufacturing plants are closed for maintenance work. In its release, Xpeng Motors blamed “seasonal slowdown” for lower deliveries and said that it would soon unveil a new version of the P7 sedan.
Xpeng Motors Appointed a New President
The company’s cumulative deliveries reached 263,298 at the end of January. Earlier this month, Xpeng appointed Fengying Wang as the company’s president.
Wang spent over three decades in China’s Great Wall Motor and is among the few female executives in the country’s automotive market, which is the largest globally. She would report to Xpeng’s CEO and chairman He Xiaopeng and look after the company’s product portfolio and sales operations.
Following Tesla’s footsteps, Xpeng Motors reduced the prices for multiple models including the best-selling P7 sedan whose starting price it cut by around 12.5%. Xpeng also lowered prices for G3i and P5 models. However, the company has not revised the prices for the newly launched G9 model.
The price war might take a toll on Xpeng Motors’ margins. It reported a net loss of around $330 million in the third quarter of 2022. While losses narrowed slightly from the previous quarter, they were significantly higher than in the third quarter of 2021. Its gross margin also fell by 90 basis points YoY to 13.5%.
NIO’s gross margins also contracted in Q3 2022 amid higher input costs. Even Tesla’s gross margins slumped in Q4 2022. However, the company managed to somewhat make up with higher carbon credit sales.
The Elon Musk-run company earned $467 million from sales of carbon credits in Q4, a YoY rise of nearly 50%.
Li Auto Stock Rises After January delivery report
While both NIO and Xpeng Motors reported a fall in their respective January deliveries, Li Auto bucked the trend. The company delivered 15,141 cars in January which was 23.4% higher than the corresponding period last year.
Li Auto’s cumulative deliveries reached 272,475 at the end of January. The company surpassed Xpeng Motors on the metric and is now playing catch-up with NIO.
Commenting on the strong delivery report, Li Auto said, “We ranked first in both China’s full-size and large SUV markets for the full year of 2022, thanks to the outstanding sales performance of all three models we have brought to the market.”
It also said that on February 8 it will officially launch Li L7, a five-seat flagship family SUV. Currently, the company has three cars in its line up namely the Li-One, Li-8, and Li-9.
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This article was written for Business 2 Community by Mohit Oberoi.
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