Chinese EV and battery giant BYD (BYDDF) reported early Thursday that its sales topped 100,000 units for a third straight month in May. Nio (NIO), Xpeng (XPEV) and Li Auto (LI) all reported bouncebacks in May EV sales on Wednesday, after China's Covid lockdowns slammed the EV startups in April.
XNio stock and other Chinese EV makers traded higher on Thursday, amid new EV subsidies and an end to lockdowns. But the stocks fell Friday in a broad market decline.
Overall China passenger-car sales in May are expected to drop 19% vs. last year, following a 35% plunge in April, according to the China Passenger Car Association. However, local reports are pointing to government subsidies to bolster car sales in China for the second half of the year.
For example, the report says Shanghai's municipal government will reduce some passenger-car purchase taxes and increase the quota of license plates for passenger cars by 40,000 this year. People who buy pure EVs will also get a subsidy of 10,000 yuan ($1,503).
In Shenzhen, the high-tech hub in South China's Guangdong Province, buyers of qualified new energy vehicles who register them in the city can get a subsidy of up to 10,000 yuan per vehicle.
The Chinese government will encourage affordable EV and hybrid sales in rural areas. Local media have reported that a rural subsidy is likely, though Tuesday's official announcement didn't mention any. A rural push would help BYD, which has several low- to moderate-priced EVs and hybrids, but not Nio, Xpeng and Li Auto.
Tesla (TSLA) China production and sales likely rebounded in May after the Shanghai plant was shut down from March 28 to April 18. But Tesla Shanghai output is still not back to full capacity. Investors will get Tesla China production and deliveries data in a week or two.
Tesla stock fell sharply Friday. Shares are far below key levels.
BYD EV Sales
Warren Buffett-backed BYD reported 114,943 units sold in May. That was 250% above the 32,800 units sold a year ago, and more than 8% above April's sales of 106,042 vehicles. (April's sales were 313% over year-earlier levels.) BYD curtailed its production of internal combustion vehicles in March in order to concentrate on battery electric vehicles (BEVs) and plug-in hybrids (PHEVs).
The auto giant's in-house chip and battery operations shielded it from supply-chain issues. Last month BYD launched preorders for the Seal EV, a Tesla Model 3 competitor. The Seal will begin deliveries in the next couple of months.
BYD is ready to buy six lithium mines in Africa, according to local media. That would provide enough lithium to satisfy its battery needs for a decade. BYD already has some investments in lithium operations.
BYDDF stock rose 4% to $37.20 on Thursday and gave back part of that gain Friday. The stock is in a deep cup base with a 41.34 buy point. BYD stock is still in range from an early entry of 34.60.
Nio EV Sales
Nio delivered 7,024 vehicles in May, up 38% vs. April and nearly 5% vs. a year earlier. In April, sales plunged nearly 50% to 5,074, down 29% vs. April 2021.
The company is opening up Nio stores in Shanghai, its biggest market.
Nio will report Q1 results Thursday. Earlier in May, Nio gave weak revenue and EV delivery guidance.
NIO stock jumped 7.2% to 18.83 Thursday, settling above its 50-day moving average, according to MarketSmith chart analysis. It held above the line in a decline Friday.
Xpeng EV Sales
Xpeng delivered 10,125 vehicles in May. That was up 12.5% vs. April and 78% vs. May 2021. The EV maker delivered 9,002 vehicles in April, down 42% vs. March.
On May 23, Xpeng gave lackluster revenue and EV delivery guidance after losses and revenue both swelled in the first quarter, amid supply disruptions. Xpeng said then that it expected to deliver 31,000-34,000 EVs in Q2, a 78%-95% year-over-year jump but below Q1 deliveries of 34,561 EVs.
XPEV stock surged 9.6% on Thursday, climbing to its 50-day line. But on Friday, it fell below the line. XPEV stock has plunged more than 50% since hitting a high of 56.45 on Dec. 1, 2021, amid an overall decline among EV stocks.
Tesla Rebounds As China EV Rival Flashes Buy Signal
Li Auto EV Sales
Li Auto delivered 11,496 Li One SUVs in May, up 176% vs. April 166% vs. a year earlier. The Li One is a hybrid, with a small gas engine as a range extender. In April, Li One deliveries dived 62% to 4,167 vs. March's 11,034 and fell 25% below a year earlier.
Li last month predicted it would deliver 21,000-24,000 vehicles for the second quarter, an increase of 19.5% to 36.6% from Q2 2021. But May's total suggests Li will easily top that forecast.
Shares rose 1.6% to $25.46 on Wednesday and climbed for a fourth straight week.
LI stock rose 3.7% to 26.41 on Thursday. A six-day advance has lifted shares firmly back above their 50-day moving average.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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