Why Are Chinese EV Stocks NIO, XPEV, LI Down Today?

  • Leapmotor’s volatile Hong Kong IPO has sent shares of Chinese EV stocks lower.
  • During August, XPeng (XPEV), and Li Auto (LI) posted disappointing delivery figures.
  • Nio (NIO) fared much better, with August deliveries up 81.6% YOY.
Chinese EV stocks - Why Are Chinese EV Stocks NIO, XPEV, LI Down Today?

Source: Shutterstock

Shares of Chinese electric vehicle (EV) stocks, like Nio (NYSE:NIO), XPeng (NYSE:XPEV), and Li Auto (NASDAQ:LI), opened in the red following the initial public offering of EV competitor Leapmotor in Hong Kong. The China-based company debuted at $6.11 per share and fell by as much as 41% during intraday trading. As part of the IPO, it raised about $803 million. The proceeds will be used for general corporate purposes and marketing. Shares of Leapmotor ultimately finished the first day down 33%, adding downwards pressure to NIO, XPEV, and LI stocks.

Shares of the three EV companies have also been hampered by supply chain issues, lockdowns in China, and inflation. With Leapmotor’s IPO, investors now have another proxy to gauge the health of the Chinese EV market.

Why Are Chinese EV Stocks NIO, XPEV, LI Down Today?

The decline of Leapmotor in its IPO is only one of several issues that Chinese EV companies have been facing this year. During August, Li Auto and XPeng posted declining delivery numbers, while Nio saw both a year-over-year (YOY) and month-over-month (MOM) gain. Li Auto delivered 4,571 vehicles, down 51% YOY and a staggering 56% MOM. XPeng reported 9,578 deliveries, down 16% MOM but up 33% YOY. Nio emerged victorious among the trio with deliveries of 10,677 vehicles, up 6% MOM and 81.6% YOY. Automobility CEO Bill Russo attributed the declining deliveries to “lingering supply chain issues” and premium prices among a struggling consumer backdrop.

On the bright side, all three Chinese EV companies have recently released new models to bolster sales. Nio’s September delivery report will include sales for ES7 SUV, which began sales on Aug. 28. The report may also include a day of sales for the new ET5 sedan, which will launch on Sept. 30.

XPeng launched its G9 SUV on Sept. 21 and stated that it could potentially become a top seller. Still, deliveries for the EV are slated to begin next month, so they won’t be included in the September delivery report.

Finally, Li Auto began deliveries for its L9 SUV on Aug. 30. On top of that, the L8 will launch in November, with deliveries starting then as well. The company also announced that it would discontinue its One model due to declining deliveries.

There’s no doubt that EV adoption across the globe is steadily rising. However, that doesn’t mean that stock prices for EV companies will rise in perfect correlation. Investors must account for a plethora of factors before making an EV investment decision, such as macroeconomics, company health, and consumer demand.

On the date of publication, Eddie Pan did not hold (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.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

Article printed from InvestorPlace Media, https://investorplace.com/2022/09/why-are-chinese-ev-stocks-nio-xpev-li-down-today-2/.

©2022 InvestorPlace Media, LLC