Key Takeaways from Chinese EV Companies’ October Deliveries

Chinese EV companies including NIO, LI Auto, Xpeng Motors, and BYD have released their October delivery reports. Here are the key takeaways from the report.

NIO delivered 16,074 cars in October which was 59.8% higher YoY. October was the first full month for the sales of NIO’s overhauled ES6 SUV – its top seller model. In the first 10 months of the year, it delivered 126,067 cars – 36.3% higher than the corresponding period in 2022. The company’s cumulative deliveries stand at 415,623.

In its release, NIO said, “In October 2023, ET5T was awarded the five-star safety rating by the European New Car Assessment Programme (Euro NCAP), marking it as the third NIO model to achieve the five-star rating under new Euro NCAP 2023 protocols, following the ET5 and EL7. Safety has always been a top priority for NIO throughout the entire product design, development, and manufacturing process.”

Key takeaways from Chinese EV companies’ deliveries

Meanwhile, Xpeng Motors delivered 20,002 EVs in October which was a monthly high and almost four times what it delivered in the corresponding month in 2022. The deliveries rose 31% as compared to September and marks the ninth straight month where the Chinese EV company’s deliveries have risen on a monthly basis. Its cumulative deliveries reached 352,523 at the end of October.

Xpeng Motors’ deliveries sagged in the first half of 2023 and were below 10,000 in all the months. However, its deliveries have gained traction after the launch of the G6 SUV. It delivered 8,741 G6s in October and said that it was the best-selling model in that price range during the month in China.

In its release, Xpeng Motors said that it “plans to expand the rollout of XNGP functions that are not reliant on high-definition maps to 50 cities by year-end. Simultaneously, a new ADAS feature – AI Valet Driver – will be available for select customers by the end of 2023, with the aim of achieving nationwide coverage in 2024.” The company unveiled these features at its Tech Day last month.

Xpeng Motors Tech Day

Xpeng Motors has said that it will roll out its driver-assist technology to Europe by the end of 2024.

The company offers its advanced XNGP technology in five Chinese cities including the capital Beijing and intends to roll out the service to 20 more Chinese cities in November. By the end of 2023, it plans to make the service available in 50 Chinese cities.

Notably, Xpeng Motors has been advancing its autonomous driving capabilities and in August it also acquired the self-driving assets of Chinese ride-hailing app Didi. As part of the $744 million deal, Didi took a 3.25% stake in Xpeng in exchange for its EV and autonomous driving assets.

Xpeng Motors to launch a new EV brand in China

Also, 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.

In July, Volkswagen partnered with Xpeng Motors to build two EVs on its platform and also buy a stake in the company for a total consideration of $700 million. The deal was a pathbreaker for not only XPEV but also the Chinese EV ecosystem as it reflected the confidence of the German auto giant in a startup EV company. It was also a testimony to Xpeng Motor’s self-driving capabilities.

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.

Li Auto also reported record deliveries

Li Auto delivered 40,422 EVs in October which was over four times what it delivered in the corresponding month last year and a new monthly record for the Chinese EV company. It has impressed markets with its deliveries and its monthly sales have hit record highs for seven consecutive months. It has delivered 284,647 vehicles in the first 10 months of 2023 while the cumulative deliveries stand at 5,41,981 – after having previously reached the milestone of 500,000 in September.

In his prepared remarks, Li Auto’s CEO Xiang Li said, “Following steady growth for ten consecutive months, Li Auto achieved a new milestone with over 40,000 monthly deliveries, a strong testament to our ever-improving organizational capabilities across production, sales, and services. Notably, we are the first Chinese emerging new energy automaker to reach this benchmark, highlighting our entrance into the next stage of accelerated scale growth.”

He added, “Li Auto has led the sales chart of SUVs priced above RMB300,000 for six straight months, becoming the best-selling premium brand among SUVs in China. Our Li L series maintained its broad market appeal, with Li L9 topping the full-size SUV market for thirteen consecutive months, while Li L7 and Li L8 have ranked first and second place in the large SUV market for six consecutive months, respectively.”

BYD Looks Set to Become the Biggest EV Seller

BYD sold 301,833 new energy vehicles (NEVs) in October which was a record high and the first time that the metric has surpassed 300,000. Last year, BYD surpassed Tesla to become the largest seller of NEVs, and looking at its growth trajectory it looks set to grab the title of the biggest seller of battery electric vehicles as well.

Meanwhile, even as three Chinese EV companies reported record deliveries in October, Tesla’s deliveries disappointed in the third quarter. While it does not release monthly deliveries like Chinese EV companies, most indicators suggest slowing growth at the Elon Musk-run company.

Some analysts fear that tepid demand for Tesla vehicles is leading to lower demand for silicon carbide products from On Semiconductor. In his note, Truist’s William Stein said, “ON highlighted weak demand for SiC products at a single EV customer (we strongly suspect Hold-rated TSLA) and weak demand at multiple European tier-1 suppliers, indicating a slowdown in semi demand at [internal combustion engine]-autos as well.”

Bank of America’s Vivek Arya also believes that Tesla is the culprit for the cancelation of silicon carbide orders. He said in his note, “EV market is currently under pressure, but we still see it as a double-digit growth market … with chipmakers such as ON driving ~2x content/car compared to ICE.”

Meanwhile, XPEV and LI shares are trading higher in early US price action today after reporting record deliveries even as NIO is trading slightly lower.