Buffett-Backed Tesla Rival BYD Breaks Out With China EV Sales Due

China EV sales for June and the second quarter are due, after Nio (NIO), Xpeng (XPEV) and Li Auto (LI) signaled a Covid recovery but Wall Street says — not so fast.


BYDDF stock broke out afresh Monday, after a huge sales growth streak for the Tesla archrival. LI stock is also in a buy zone, with China EV startups due to report June and Q2 EV sales Friday.

Chinese EV and battery giant BYD (BYDDF) is likely to follow on July 2 or 3, around the same time as Tesla (TSLA) reports global Q2 production and deliveries.

On June 1, Nio and its startup peers signaled improving EV sales. They said supply chains and production lines are slowly recovering from lockdowns in Shanghai and other cities.

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But on Monday, MarketWatch had Mizuho analyst Vijay Rakesh cutting price targets for NIO stock, Tesla (TSLA) and others, along with delivery estimates. The analyst cited continuing Covid-fueled lockdowns and supply constraints.

Shenzhen is seeing fresh restrictions and mass testing will continue in Shanghai until July end, Reuters reported over the weekend.

China EV sales rebounded in May after diving in April vs. March. Local governments have responded to a potential slowdown with cash EV subsidies to spur sales, including Shanghai, Beijing and Shenzhen.

China EV Sales, Nio Stock

NIO delivered 5,074 EVs in April and 7,024 in May. It has forecast Q2 deliveries of 23,000-25,000 electric vehicles, up 5%-14% from a year ago. But that would be down from Q1’s 25,768 EV deliveries. The Q2 target implies a strong month-over-month improvement in June sales.

Nio’s Q2 tally will include the first full quarter of sales for its first electric sedan, the luxury ET7. Nio also sells three electric SUVs and has two EVs coming out in the third quarter.

A somewhat stale lineup has weighed on Nio’s EV sales. The Shanghai-based startup also especially suffered from recent Covid lockdowns, which hurt production.

Shares of the once white-hot China EV stock fell 4.7% to 22.95 on the stock market today. Nio stock has rallied in June to recover the 50-day moving average but remains 58% below the 52-week high.

Xpeng Stock

Xpeng delivered 9,002 EVs in April and 10,125 in May. It has forecast Q2 deliveries of 31,000-34,000 EVs, jumping 78%-95% year over year, but down from 34,561 in Q1.

On June 1, Xpeng said it resumed “double-shift” production at its Zhaoqing plant in May as supply chains and manufacturing areas start to gradually recover.

Amid Covid lockdowns, analysts have praised Xpeng for its more resilient supply chain management vs. peers.

Alibaba-backed Xpeng plans to launch a new electric SUV, the G9, in Q3 and start deliveries in Q4. Currently the P7 and P5 electric sedans underpin Xpeng’s EV sales.

Shares lost 2.5% to 34.40 on Monday, backing off to just below the 200-day line. Xpeng stock is 39% off highs.

Li Auto Stock

Li Auto delivered 4,167 EVs in April and 11,496 in May. The IBD 50 top growth stock forecasts Q2 deliveries of 21,000-24,000, up 20%-37% year over year, but down from 31,716 in Q1.

Li sells the Li One, a hybrid-electric SUV, and recently unveiled the L9 after Covid delays. The new L9 SUV, also a hybrid, racked up more than 30,000 orders in 72 hours, the company said on June 24.

L9 deliveries should start in late August, with the automaker predicting sales hitting 10,000 in September.

The new EV comes despite challenges. “Although our parts suppliers in the Yangtze Delta region have gradually resumed production, they have not yet fully recovered and we continue to encounter challenges due to parts supply shortages,” Li Auto said June 1.

Shares gave up 4.1% to 39.13 Monday, just moving back into buy range. Li Auto stock topped a 37.55 buy point June 23, following a six-week win streak. LI stock has vaulted 56% in June, but is greatly extended from moving averages.

Tesla Stock Hits Resistance As Q2 Deliveries Loom


China EV and battery giant BYD is also due to report June sales.

Its Q2 sales will almost certainly blow past Q1’s record tally of 286,329 EV and hybrid vehicles. Warren Buffett-backed BYD reported May sales topped 100,000 EVs for a third straight month. It grew May sales 250% vs. a year earlier, continuing a hot sales growth streak in Q1 after more than tripling 2021 sales.

In April, BYD shifted to producing only hybrid and electric vehicles, ditching cars that run only on gas or diesel. Now BYD reportedly plans to supply Tesla with EV batteries, though the U.S. EV giant hasn’t confirmed a deal.

Both BYD and archrival Tesla have huge expansion plans amid record EV deliveries.

Shares advanced 1.9% to 40.25 Monday. BYDDF stock topped a 39.81 buy point from a cup-with-handle base in above-average volume, after attempting a breakout last week. The relative strength line is just below long-term highs. BYD stock is a mere 3% below highs.


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