There is an electric vehicle price war in China. It’s working.
Early delivery results for September look solid.
NIO
(ticker:
NIO
),
Li Auto
(LI), and
XPeng
(XPEV) delivered a combined 66,831 vehicles this past month, up 116% from the same time last year. It’s the second-best combined month ever. The trio delivered 68,203 in August.
NIO delivered 15,461 units in September, up about 44% from the same time last year. For the third quarter, NIO delivered 55,432 units, up about 75% from a year ago.
Wall Street projects third-quarter sales of about $2.7 billion, up about 48% from last year. Price cuts are part of the reason for the difference between unit sales and revenue. EV makers in China, including
Tesla
(TSLA), have been lowering prices to preserve market share and boost demand. Citi analyst Jeff Chung wrote recently that the average discount for EVs in China, off suggested retail prices, is about 3.5%, up from 2.5% a few months ago.
Chung’s been following pricing for a while. In August, he counted more than 20 price cuts on EV models from at least 10 auto makers. He characterized the actions as a price war.
XPeng
delivered 15,310 vehicles in September, up about 81% from one year ago. For the third quarter, XPeng delivered 40,278 units, up about 36% from last year. Wall Street expects third-quarter revenue to hit about $1.2 billion, up about 25% from the same time last year.
Li continued its hot streak, delivering 36,060 units in September, up about 213% from a year ago. For the quarter, Li delivered 105,108 units, up almost 300% from last year. Wall Street expects third-quarter revenue to rise about 245% from the same time last year, to about $4.6 billion.
The results are roughly in line with Wall Street expectations and illustrate that EV demand is still growing, even if prices are part of the reason.
The stocks aren’t trading on Sunday. Coming into Monday trading, XPeng and Li shares are up about 67% and 47%, respectively, over the past six months. NIO stock is down about 8%. The
S&P 500
and
Nasdaq Composite
are up about 4% and 8%, respectively.
Tesla
is due to report third-quarter deliveries on Monday. Tesla doesn’t report monthly numbers. Wall Street is expected about 455,000 units, down from about 466,000 delivered in the second quarter. Tesla stock is up about 28% over the past six months.
Write to Al Root at [email protected]
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