Chinese EV Stocks: What Is Going on With NIO, LI, XPEV Today?
Chinese electric vehicle (EV) makers entered the new year with big delivery numbers. Nio (NYSE:NIO), XPeng (NYSE:XPEV) and Li Auto (NASDAQ:LI) each reported deliveries over the weekend, shipping more than 40,000 units altogether. However, Chinese EV stocks are in flux this morning as investors mull over the new figures.
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So, what do you need to know about the delivery reports making waves this morning?
Well, XPeng led the group, reporting a record 16,000 deliveries in December. It also announced total deliveries of 98,000 vehicles in 2021, a 263% year-over-year increase. Despite this, XPEV is currently the only stock in the red of its competition, slipping 1.69% so far today.
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Li had a similar story last month, delivering 14,087 units in December, another monthly record. Moreover, yearly numbers were nothing to sneeze at, with 90,491 deliveries through the year for a 177% increase. LI stock is trending close to even so far today.
Nio reported delivering 10,489 vehicles in December, just shy of its monthly record of 10,878 vehicles, achieved in November. NIO’s yearly numbers were similarly promising, recording 91,429 vehicle deliveries to close the year for 109% growth.
What else is propping up EV stocks lately?
Chinese EV Stocks Surge on Subsidy Cut Announcement
The strong delivery numbers last month might be attributable to a subsidy cut coming for Chinese EV buyers this year. China announced it would be slashing new electric vehicle (NEV) subsidies by 30% starting in 2022, including a 20% subsidy cut for NEVs used for public transport.
This will effectively shift the subsidy to 10,000 yuan ($1,500) from 14,400 yuan ($2,200). Furthermore, the new policy entirely removes subsidies for Chinese NEVs priced over 300,000 yuan ($47,200), pre-subsidy. Even more drastic, the Chinese Finance Ministry plans on ending all subsidies for NEVs by the end of this year.
Given sales numbers, some jumped on the opportunity to save a bit with an accelerated EV purchase before the functional tax takes place.
Additionally, Nio announced in early December that it will absorb the subsidy change for preorders (with deposit) made before midnight on Dec. 31, 2021, for vehicles delivered before March 31, 2022. Currently, all the vehicles Nio offers are priced over 300,000 yuan.
It seems Chinese EV buyers could be in for a manic race to acquire the new-age vehicles before the new policies take effect. Though, this news could read as a short-term boom for Chinese EV investors, hungry to cash in on elevated sales numbers.
On the date of publication, Shrey Dua 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.
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