Chinese EV stocks are rising today after they reported decent delivery numbers for May despite renewed Covid-19 restrictions that impacted their production.
Shares of Nio (NYSE:NIO), Xpeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) are each up today after they delivered May sales figures that investors and analysts view as “good enough.” These figures come as China begins to ease the lockdown measures it imposed in Shanghai and other regions to halt the spread of Covid-19.
What Happened With Chinese EV Stocks
Nio said it delivered more than 7,000 vehicles in May, up 4.7% year over year. In a written statement, Nio said that its manufacturing capacity is “gradually recovering” but that its ability to deliver vehicles was “still constrained” by some ongoing lockdowns.
Nio added that it is working with its suppliers to boost production and that it anticipates deliveries rising during the summer months. Other Chinese electric vehicle makers reported stronger May deliveries than Nio. Xpeng said that it delivered 10,125 vehicles during the month, a 78% increase from a year ago as it resumed two-shift production at its main manufacturing plant.
Li Auto reported that it delivered 11,496 vehicles in May, up 160% from the same month in 2021.
Why It Matters
The May delivery numbers issued by China’s electric vehicle makers were better than analysts and investors expected, and were strong despite Covid-19 restrictions that curtailed automotive production for much of the month. The positive news has the share prices of NIO, XPEV and LI rising today as investors feel increasingly bullish on the sector.
The better-than-expected May deliveries and share price gains today are welcome news for an industry that has been badly beaten down this year. Prior to today, NIO stock was down 45% year to date. XPEV stock was down 53% and LI stock had declined 23%.
The steep losses have come as investors rotate away from high-growth, technology-focused securities and into more cyclical, blue-chip stocks.
What’s Next for NIO, LI, XPEV
The May delivery numbers help the stocks of Chinese electric vehicle manufacturers recover from the lows they have experienced this year. While positive, investors should be aware that these stocks still remain well-below their 52-week highs and today’s gains might not hold. Further declines in the coming weeks and months could occur.
On the date of publication, Joel Baglole 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.