Key Takeaways Chinese EV Companies’ September Deliveries
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Chinese EV companies have released their delivery reports for September. Here are the key takeaways from the release and a comparative analysis of leading players.
NIO delivered 15,641 vehicles in September which was 43.8% higher than the corresponding month in 2022. The company’s deliveries however fell as compared to August. Notably, NIO’s deliveries fell on a sequential basis in August also after they hit 20,462 in July – a new record for the Chinese EV company.
Nonetheless, NIO delivered 55,432 cars in the third quarter which is 75.4% higher than the corresponding quarter last year. The performance is in line with its guidance of 55,000-57,000 deliveries.
While the steep YoY rise is also due to the lower base effect considering the slump in the Chinese economy in 2022 due to the COVID-19 lockdowns, it is nonetheless a welcome break for investors as the company’s average monthly deliveries averaged below 10,000 in the first half of 2023.
NIO’s Q3 deliveries were in line with estimates
After a relatively strong Q3 performance, NIO’s cumulative deliveries reached 399,549 at the end of September.
In its report, NIO said, “On September 15, 2023, NIO launched and started deliveries of the All-New EC6, a smart electric coupe SUV. Based on NIO Technology 2.0, the All-New EC6 boasts comprehensive upgrades including innovative design language, exceptional performance and advanced intelligence features, delivering beyond-expectation experience to families and individuals seeking inspirations in their lives.”
EV stocks were quite volatile in September and NIO was especially in action last week amid rumors that it is contemplating yet another capital raise after a $1 billion convertible note issue. NIO however clarified that it does not “currently has no reportable capital raising activity.”
Chinese EV companies are getting interest from investors
Meanwhile, Chinese EV companies are getting interest from foreign investors. This year, while an investment arm of the Abu Dhabi government has invested $1 billion in NIO, Volkswagen has taken a stake in Xpeng Motors. The two would jointly develop EV models for the Chinese market in what’s a pathbreaking deal in the Chinese automotive industry.
Xpeng Motors expects the deal with Volkswagen to also help improve its margins. It reported a gross margin of -3.9% in the second quarter as compared to 1.7% in Q1 2023 and 10.9% in Q2 2022. The company’s vehicle margin was -8.6% in Q2 2023 as compared to -2.5% in Q1 2023 and 9.1% in Q2 2022.
The company expects its gross margins to improve over time and said that increasing volumes would help its margins to improve in Q4. It added that “as we sell a better mix of products in the second half, we do expect our gross margin to become positive in the fourth quarter of this year.”
Xpeng Motors delivered 15,310 cars in September
Xpeng Motors delivered 15,310 cars in September which was 12% higher than August. It delivered 40,008 vehicles in the third quarter which helped lift its cumulative deliveries to 332,521. Its Q3 deliveries were within the range of 39,000-41,000 that it previously provided.
Notably, in July, Xpeng Motors began the deliveries of its G6 SUV. The car is based on Xpeng Motors’ new production platform called SEPA2.0 (Smart Electric Platform Architecture) which the company unveiled in April. The company priced the model 20% below Tesla’s Model Y. However, Tesla has since lowered its car prices in China and intensified the price war.
Xpeng Motors is banking on the G6 EV model
Xpeng Motors is meanwhile banking on the G6 model to revive its fortunes. It delivered 8,132 G6 vehicles in September, which brought the model’s cumulative deliveries to 19,381 units.
During Q3, Xpeng Motors announced a $744 million deal with Chinese ride-hailing app Didi which would take a 3.25% stake in Xpeng in exchange for its EV and autonomous driving assets.
As part of the agreement, Xpeng would launch a new EV brand developed under the project name “MONA” and would produce vehicles in the mass market RMB150,000 price range.
Meanwhile, as has been the case for the last many months, Li Auto’s September deliveries were way ahead of NIO and Xpeng Motors.
Li Auto’s September EV deliveries
Li Auto delivered 36,060 EVs in September which was over thrice of what it did in the corresponding month last year and a new record for the Chinese EV company. The company delivered 105,108 cars in the third quarter which was almost four times the corresponding quarter in 2022. The deliveries were higher than that its guidance of 100,000-103,000.
Li Auto has delivered 244,225 EVs in the first nine months of 2023 and its cumulative deliveries reached 5,01,559 at the end of September. In his prepared remarks, Li Auto’s CEO Xiang Li said, “As China’s first emerging new energy automaker to reach the milestone of 500,000 cumulative deliveries, Li Auto is capturing an increasing market share in the RMB200,000 and higher NEV market, ranking among the top two best-selling NEV brands in this price segment in China. We also have topped the sales chart of SUVs priced above RMB300,000 in China for six straight months.”
Li added, “Driven by the ever-increasing market demand, we made numerous historic breakthroughs in September, achieving record-high weekly and monthly sales performance as well as a new high in order intake with over 40,000 orders received in a single month. Meanwhile, monthly deliveries for each of our three Li L series models exceeded 10,000 vehicles for the second consecutive month.”
EV price war
The cumulative EV deliveries of Li Auto, Xpeng Motors, and NIO were almost 67,000 units in September which was the second highest on record and Li Auto accounted for over half of it. There has been a price war in the Chinese EV industry as domestic automakers have also lowered EV prices after Tesla’s price cuts.
While China’s automotive association attempted a truce in the EV price war, it gave up the pledge saying it violated the country’s antitrust laws.
Meanwhile, NIO, Li Auto, and Xpeng Motors are trading slightly higher in US premarket price action today even as futures point to a weak opening for the US markets.
