Lunar new year typically makes February a weak month for auto deliveries.
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Vehicle deliveries from U.S.-listed Chinese electric-vehicle makers dropped for the second consecutive month in February. Their shares were falling early Tuesday as investors digested the new data.
NIO (ticker: NIO) delivered 6,131 vehicles in February, down from 9,652 in January and 10,489 delivered in December 2021. XPeng (XPEV) delivered 6,225 in February, down from 12,922 in January and 16,000 delivered in December. Li Auto (LI) delivered 8,414 vehicles in February, down from 12,268 delivered in January and 14,087 in December.
Combined, the trio delivered 20,770 vehicles in February, down from 34,842 delivered in January and 40,576 delivered in December.
NIO and XPeng shares fell 2.5% and 2.8%, respectively, in premarket trading. Li shares were off a more modest 0.2%. S&P 500 and Dow Jones Industrial Average futures were both down about 0.6%.
The Lunar new year typically makes February a weak month for deliveries. That’s part of the story with falling deliveries. Covid-19 was a factor too.
“The holiday season and an outbreak of the pandemic in Suzhou have resulted in supply shortages and affected our production,” said Li Auto President Yanan Shen in the company’s news release. “We are taking additional measures to ensure supply and safeguard production, aiming to shorten the waiting time of delivery to our users.”
There is a bit of good news for investors in the February data. Year over year, combined February deliveries grew 106%. That growth rate was up from the 87% year-over-year growth realized in January.
Deliveries in January dipped partly because buyers rushed to purchase cars in December to beat purchase incentive cuts for EVs. Some incentives for EV purchases were cut as much as 30% beginning in 2022 as the government slowly weans the industry off incentives.
All three stocks rose on Feb. 1, the day the companies reported January data. It’s difficult to predict exactly what will happen Tuesday, based on the February data. Shares of the three have been beaten up recently.
Coming into Tuesday trading, NIO, XPeng and Li shares were down aboaut 28%, 28% and 5% year to date, respectively. Inflation, rising interest rates and the Russia-Ukraine conflict have sapped some investors’ willingness to hold richly valued growth stocks.
Write to Al Root at [email protected]
