Chinese EV stocks are heading down in pre-market trading on Wednesday, as growth stocks are under pressure ahead of an announcement of the Federal Reserve’s interest rate decision today. Shares of Xpeng (NYSE:XPEV) were down the most, off 3.73% after a near-6% loss yesterday.
The Federal Open Market Committee announcement is due at 2 p.m. Eastern, with growing pressure on the central bank to turn down its dovishness and to start to look ahead to some tightening.
The Chinese EV makers could also be in for tougher competition.
Ford (NYSE:F) said it expects about half of its Lincoln brand sales to be all-electric models by 2026, as it plans to offer new EVs across its portfolio of vehicles within the next decade. Part of that plan includes the debut of a new EV for China in 2022.
Strong May Numbers Fueled Chinese EV Stocks
Chinese EV stocks got off to a great start this month after Nio and Xpeng reported big jumps in year-over-year deliveries in May, despite Nio’s comment that semiconductor supplies were volatile during the period. Shanghai-based Nio said its deliveries rose 95% last month to 6,711 units, while smaller rival Xpeng saw its shipments soar 483% to 5,686 vehicles.
“In May, the company’s vehicle delivery was adversely impacted for several days due to the volatility of semiconductor supply and certain logistical adjustments,” Nio said in a statement. “Based on the current production and delivery plan, the company will be able to accelerate the delivery in June to make up for the delays from May.”
China sold 10.88 million vehicles between January and May, up 36% from the same period a year earlier, according to Reuters. A global chip shortage and surging raw material prices are having an increasing impact on automakers in the country, data from the China Association of Automobile Manufacturers (CAAM) showed.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including previous stints with Bloomberg News and as a buyside equity research editor. His Substack newsletter, TLV Strategist, covers the Israel business scene.