Electric vehicle (EV) sales in China are gaining traction despite a competitive market and economic challenges. Strong June delivery reports from Li Auto (LI, Financial), NIO (NIO, Financial), and XPeng (XPEV, Financial) highlight this trend. These stocks, which have faced growth concerns over the past two years, are seeing positive movement today due to encouraging delivery data.
- Li Auto (LI, Financial) saw June deliveries rise by 46.7% to 47,774 vehicles, meeting analysts' expectations. For the quarter, the company delivered 108,581 EVs, a 25.5% increase, driven by 20,000 deliveries of its new L6 premium family SUV. The company announced it has reclaimed the top sales spot among China's emerging new energy auto brands since Q2.
- NIO (NIO, Financial) set a new monthly record in June with deliveries soaring 98% to 21,209 vehicles. XPeng (XPEV, Financial) also saw a 24% increase in deliveries for the month.
- China's economy has been impacted by declining global consumer spending and issues in its real estate market, reducing EV demand. However, the government remains committed to expanding the EV market, aiming for EVs to make up 40% of all vehicle sales by 2030.
- The Chinese government has invested over $230 billion in the EV industry over the past decade, including substantial subsidies, according to the Center for Strategic and International Studies.
- Current subsidies include nearly $1,400 for EV buyers replacing gasoline vehicles, further boosting EV sales. This strengthening market benefits not only China-based manufacturers.
- In May, Tesla (TSLA, Financial) saw China deliveries increase by nearly 17% month-over-month, following an 18% decrease in April. TSLA is expected to report its total Q2 deliveries tomorrow, with estimates predicting a 15% quarter-over-quarter increase.
The strong June delivery reports indicate growing EV demand in China, with government subsidies and incentives playing a significant role in this resurgence.
