China EV makers BYD, Li Auto, Nio and XPeng on Friday reported that EV deliveries fell sharply in February for a second straight month. Most Chinese EV stocks rose. Li Auto stock returned to the buy zone.
On Friday, Li Auto, a fast-growing startup rival to BYD and Tesla in China, also launched the Mega minivan, its first purely battery-electric vehicle. Li said it expects the Mega to drive a delivery rebound in March.
The start of the year tends to be a weak period for sales in the country, due to seasonal factors. But EV makers in China face an intensifying price war, tied to lower demand and concerns about overcapacity.
On Thursday, Tesla resinstated an insurance subsidy on its most popular EVs in China, after BYD escalated a major price war earlier this week. Tesla does not report monthly sales.
Li Auto Expects March EV Sales Rebound
BYD sold 122,311 electric vehicles in February, down 39% from January.
Li Auto delivered 20,251 EVs, down 35% from January.
Alongside the new Mega BEV, Li on Friday rolled out a refresh of three current models, all hybrid electric SUVs. Tesla and BYD only make battery-electric vehicles.
As the lineup expands, Li Auto expects deliveries to rebound to 50,000 in March, CEO Xiang Li said.
Nio delivered 8,132 EVs, down 19% from January.
XPeng delivered 4,545 EVs, down 45% from January. The company said it will ramp up deliveries of the new X9 minivan, its most expensive model, as production capacity increases and supply issues abate.
Industry data earlier pointed to a sharp February sales drop amid the long Chinese New Year holiday.
Li Auto Stock, China EV Stocks
U.S.-listed shares of Li Auto fell back in range on the stock market today. Li Auto stock punched above a 42.35 buy point from a 44%-deep double-bottom base on Monday.
The China EV stock broke out powerfully after a solid fourth-quarter earnings report. Its 50-day average remains below the 200-day line, but is starting to turn up. Shares are up about 25% for the week.
Shares of BYD and Tesla both rose Friday. After coming off recent lows, BYD stock faces a test of the 50-day moving average.
Nio stock and Xpeng also gained, near 52-week lows. Their 50-day averages continue to decline below their 200-day lines, a negative sign.
Nio will report earnings for the fourth quarter on Tuesday. Xpeng will follow on March 19.
Li Auto Challenging Tesla, BYD
On Friday, Li Auto said the new Mega tries to address two gaps: The needs of multi-generational households, as well as range anxiety tied to BEVs (battery electric vehicles).
Its existing Li L7, L8 and L9 SUVs are extended-range electric vehicles, basically a type of plug-in hybrid. Li debuted refreshed 2024 versions of those as well.
The premium EV maker continues to outsell startup peers Nio and Xpeng. It's also sharpening the threat to BYD and Tesla, with rapidly rising deliveries — and now its first BEV.
The Li L7 is seen a rival to the Model Y in China. In a recent video, Li Auto compared the ranges of the new Mega EV and the Model X.
Tesla produces the models 3 and Y, but not the S and X, in China.
EV Price War Escalates
On Wednesday, BYD slashed prices on the refreshed versions of its Han and Tang EV models, following similar cuts across several other models. Most of those refreshed versions come with significant tech upgrades, including driver-assist features.
China's EV makers have taken the price war to both ends of the EV market: budget and mid-to-high end.
Archrival Tesla discounted the Model Y further on Feb. 1. It cut Model Y and Model 3 prices in January.
Cheaper batteries helped offset some of the price cuts, but BYD and other automakers likely face further margin pressure. BYD's continued export boom will help, boosting sales as well as margins.
