Li Auto’s August Deliveries Were Awful. Tesla Stock Is Falling, Too.

Citigroup analyst Jeff Chung believes August and September sales are important for Chinese EV stocks.


Hector Retamal/AFP via Getty Images

Demand for electric vehicles in China is wavering. That could make



Tesla

investors nervous on Thursday.

Deliveries for Chinese EV maker



Li Auto

(ticker: LI) declined 52% in August from a year earlier.



XPeng’s

(XPEV) report was much better, but deliveries still dropped 17% from July. Monthly numbers from NIO (



NIO

) look strongest of the three. The company managed to grow deliveries in August from the prior month.

Li said deliveries last month were 4,571 vs. 9,433 a year earlier.



XPeng

delivered 9,578 cars in August, compared with 11,524 in July and 7,214 vehicles in August 2021. NIO delivered 10,677 vehicles in August, up from 10,052 in July and 7,102 in August 2021.

Combined, the three auto makers delivered 24,826 vehicles in August. That’s the second consecutive monthly decline and the worst number since April 2022 when Covid lockdowns impacted results.

American depositary shares of



Li Auto

fell 2% in premarket trading Thursday. XPeng declined 2.2% and NIO stock was off 2.6%.


S&P 500

and


Dow Jones Industrial Average

futures fell 0.8% and 0.6%, respectively.



Tesla

(TSLA) stock might be impacted by Chinese delivery figures too. China is the largest market for new EVs in the world and



Tesla

generates roughly a quarter of its sales in the country.

Preliminary estimates from the Chinese Passenger Car Association indicated Tesla produced about 77,000 vehicles in China during August. That’s a good month and would be the second-highest month ever out of the company’s Shanghai plant. That preliminary number includes exports as well. The split between domestic sales and export sales should be available later in the month.

Tesla stock was down about 1.8% in premarket trading.

Li Auto and XPeng already reported second-quarter numbers and given third-quarter delivery guidance. It’s easy to see what August deliveries imply for September. NIO reports second-quarter numbers on Sept. 7.

XPeng expects to deliver about 30,000 vehicles in the third quarter, down from 34,422 delivered in the second quarter. XPeng delivered 11,524 in July. Including the August figure, XPeng needs to deliver about 8,900 vehicles in September to meet guidance. That, of course, would be lower than the August number.

Li Auto expects to deliver about 28,000 vehicles in the third quarter, down from 28,687 delivered in the second quarter. Li delivered 10,422 vehicles in July. Including the August figure, Li needs to do about 13,000 vehicles in September. If Li pulls that off, it would, essentially, be a record for monthly deliveries.

The lower third-quarter deliveries compared with the second quarter were being blamed by management teams on seasonality—July and August are slow months—and lingering demand issues from Covid lockdowns.

That raises the importance of numbers from coming months. Citigroup analyst Jeff Chung wrote recently that he believes September sales need to show sequential improvement for the stocks to work into year-end.

Li guidance indicates demand will improve. XPeng guidance doesn’t. The conflict will keep investors nervous in coming weeks.

Coming into Thursday trading, NIO shares have fallen about 38% this year. Li and XPeng shares are have declined about 10% and 63%, respectively. The S&P 500 and


Nasdaq Composite

have dropped 17% and 24%, respectively.

Rising interest rates have taken some of the steam out of growth stocks such as these three. Rising tensions between U.S. and Chinese officials haven’t helped either.

Write to Al Root at allen.root@dowjones.com

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