Shares of China-based electric vehicle (EV) makers are marching higher today after issuing stronger-than-expected delivery numbers for the month of June. Chinese EV stocks Nio (NYSE:NIO), Li Auto (NASDAQ:LI) and Xpeng Motors (NYSE:XPEV) were each up about 2% in pre-market trading after their June deliveries exceeded the expectations of both analysts and investors.
The June results were especially impressive. They came during a period of renewed Covid-19 lockdowns in China that led to manufacturing plants operating at reduced capacity or being shut down entirely. So far this year, NIO and XPEV stocks have each declined around 35%, while LI stock has gained 18%.
What Happened to Chinese EV Stocks
Nio reported that it delivered a record of nearly 13,000 vehicles in June, up 60% from a year ago as China’s automotive industry recovers from the Covid-19 lockdowns that were imposed in April and May of this year. The 12,961 vehicles delivered by Nio in June was the company’s best monthly performance since it began sales in June 2018.
However, even though Nio had a record month of deliveries in June, it wasn’t enough to outpace the company’s main competitors. XPeng said it delivered 15,295 vehicles in June, up 133% from June 2021. Li Auto reported that it delivered 13,024 of its fully electric SUVs last month, up 69% from a year earlier.
While all three Chinese automakers had their production interrupted by the renewed lockdowns, Nio, which is based in Shanghai, was most impacted by production shutdowns. June marked the first month that Nio delivered more than 10,000 EVs since December 2021.
Why It Matters
The recovery in June deliveries shows not only that China’s electric vehicle manufacturers are recovering from a difficult spring marked by Covid-19 shutdowns, but also that consumer demand for their products remains strong. Nio, Li Auto and Xpeng each provided updates on their production status and the planned introductions of new EVs along with their June delivery data.
Nio said it is on track to start deliveries of its new ES7 SUV and revised versions of ES8, ES6 and EC6 SUVs this August as planned. XPeng said it resumed two-shift production in mid-May at its manufacturing plant, and that it will launch a new SUV called the G9 in September. Earlier in June, Li Auto introduced a new large SUV called the L9 and said it will begin deliveries of it in August.
What’s Next for Chinese EV Stocks
Taken together, the June delivery numbers for China’s big three electric vehicle makers are positive. They show the companies are back to full production and consumer demand for EVs remains robust. The positive delivery data therefore has NIO, LI and XPENG stocks trending higher today. With all three automakers planning to begin deliveries of new EVs this summer, deliveries should continue accelerating through the second half of this year.
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.