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Chinese electric car makers advance amid signs of improving sales

Shares of Chinese electric car makers rose sharply on Wednesday morning in Hong Kong, continuing a rebound from earlier losses this week amid signs of improving retail sales.

Li Auto Inc. LI,
+0.98%
recently increased by 8.5%, NIO Inc. NIO,
+7.77%
jumped 14% and XPeng Inc. XPEV,
+5.09%
advanced by 5.4%. But BYD Co. 1211 peers,
-2.63%
fell 1.9%, weakening from a multi-month high reached on Monday.

Automakers’ gains followed those of their U.S.-listed stocks, which also surged overnight. Li Auto grew by 11%, NIO by 17% and XPeng by 7.5%.

Retail sales in China’s passenger vehicle market have recovered from the severe blows dealt by Covid-19 lockdowns since April in Shanghai, Beijing and other cities, which have been gradually lifted in recent days. Citi analysts said in a note that they expect a much stronger pace of recovery month-over-month, based on last week’s data on weekly vehicle insurance registrations. of tourism. The rebound in insurance registrations for electric vehicles was strong at 21% from the previous week, they noted.

The country’s passenger vehicle sales in May rose 30% to 1.35 million from 1.04 million vehicles in April, the China Passenger Car Association said last week.

NIO received an additional boost after announcing a product launch event on Wednesday, where it is expected to unveil the highly anticipated ES7 sport utility vehicle. Deutsche Bank analyst Edison Yu said in a note that “NIO is embarking on the largest product cycle in the company’s history”, estimating that shipments should increase to 25,000 per month. by the end of the year, compared to 7,000 per month in May.

Write to Clarence Leong at clarence.leong@wsj.com

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Post expires at 7:49pm on Saturday June 25th, 2022

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