U.S. listed Chinese EV players Nio (NYSE: NIO), Xpeng (NYSE:XPEV), and Li Auto (NASDAQ:LI) saw their delivery numbers for the month of July decline a bit, after a robust June. Xpeng fared the best of the three players, delivering 11,524 vehicles in July, up 43% from a year earlier, although the numbers were down by 24% from June levels. Li Auto delivered about 10,422 vehicles in July, up 21% versus last year and down by roughly 20% versus last month. Nio delivered about 10,052 vehicles in July, up almost 27% versus the last year, although the number was down by 22% versus the last month. While Li Auto and Xpeng didn’t provide any specific details for the sequential decline, auto sales do see some seasonality in China, with July deliveries often coming in below June. Nio has highlighted that it saw some supply constraints for casting parts, which held back the production of its ET7 sedan and EC6 crossover.
Now, the three stocks have had a mixed performance this year. While Nio and Xpeng stocks are down by 39% and 50% year-to-date, respectively, Li Auto has outperformed, with its stock up by roughly 5% this year so far. However, things are likely to get better from here for a couple of reasons. Firstly, overall EV demand and favorable regulation in China remain a big tailwind for Chinese EV players. Between January and July deliveries of new energy vehicles – a broad term that includes hybrids, EVs, and fuel cell vehicles – rose by over 2x versus last year. Separately, the three companies also have new products in the offing, which could help to drive sales further. For example, Li Auto has commenced deliveries of its flagship LI9 SUV, while Nio is slated to launch its ET5 sedan and premium ES7 SUV. Xpeng is also expected to launch its flagship G9 SUV in September. Separately, production could also pick up, with the semiconductor shortage, which crippled automotive production for almost two years, showing signs of easing, and with Covid-19-related issues also stabilizing in China, after months of lockdowns.
|S&P 500 Return||0%||-14%||84%|
|Trefis Multi-Strategy Portfolio||0%||-13%||242%|
 Month-to-date and year-to-date as of 8/2/2022
 Cumulative total returns since the end of 2016