Nio managed to grow deliveries of its electric vehicles in August versus July. However, rivals Li Auto and Xpeng saw a sharp fall in deliveries. EV players continue to face supply chain disruptions for the resurgence of Covid in China as well as weaker consumer demand due to a difficult economic environment in the country.
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Here are the August delivery numbers for the three companies:
- Li Auto: Delivered 4,571 vehicles in August, down 56% versus July’s number of 10,422 cars. That figure is also down 51% year-on-year.
- Xpeng: Delivered 9,578 vehicles in August, down 16% versus July’s number of 11,524 cars. However, that represents a 33% year-on-year rise.
- Nio: Delivered 10,677 vehicles in August, up 6% versus July’s number of 10,052 cars. That was also a 81.6% year-on-year rise.
Nio was the only company to grow on a monthly basis in August. U.S.-listed shares of all three carmakers were down around 2% in pre-market trade.
The Chinese economy is facing a number of challenges including a resurgence of Covid-19 that has seen major cities like Shanghai locked down. In the last few days Shenzhen, China’s tech hub has enacted Covid restrictions and on Thursday, the mega city of Chengdu went into lockdown.
While some cities may have opened up again, consumer sentiment remains fragile and uncertainty prevails as a result of China’s “zero-Covid” policy.
The world’s second-largest economy is also facing a power crunch which is impacting electric vehicle charging stations. Last month, Tesla and Nio suspended some of their charging services.
These issues are filtering through to EV sales.
Bill Russo, CEO at Shanghai-based Automobility, told CNBC, the numbers are “reflective of lingering supply chain issues as well as the fact that they’re on the premium end of the price range and with the weakening economy, people are looking toward affordability and that’s squeezing some of the higher priced models.”
Last month, Xpeng said it expects to deliver between 29,000 and 31,000 electric vehicles in the third quarter of the year. This guidance disappointed investors.
Xpeng President Brian Gu said the guidance reflects the fact that the industry is entering a “relatively slow season” and that traffic in stores is less due to the Covid situation.
Yanan Shen, president of Li Auto, said in an earnings call last month that the Covid outbreak “severely affected” the company’s supply chains and that there are remaining “disruptions and difficulties.”
Shen also said there had been a slowdown in order intake for its flagship Li ONE sports utility vehicle.
Li Auto began to deliver its new L9 car to customers at the end of August. And the company said it is planning to launch and deliver a large SUV called the Li L8 in early November. That could be affecting sales of its Li ONE, according to Russo.
“Li has major new product launches with the L9 and L8 which is also impacting consumer demand for Li ONE. When new products come out, demand for the older model often suffers,” Russo said.
To spur demand, China said last month it would extend its tax exemption for new energy vehicle purchases until the end of 2023.
Competition continues to heat up in China’s electric vehicle market. Alongside Li Auto’s new cars, Xpeng plans to begin deliveries of its new G9 SUV in October and launch two new vehicles next year.
Image and article originally from www.cnbc.com. Read the original article here.