Chinese EV Shares Slump, Pressured by Tesla Price Cuts, Weak Sales
By Sherry Qin
Shares of Chinese electric-vehicle makers fell sharply amid intensified competition after Tesla cut prices again in China and weak sales in January so far.
NIO shares fell 9.6% to 49.05 Hong Kong dollars (US$6.27) on Wednesday after ADRs shed 8.65% overnight. Its Hong Kong-listed shares have lost 33% so far this year. XPeng dropped 9.9% and Zhejiang Leapmotor Technology declined 5.1%.
Tesla cut the price of its entry-level Model 3 by 5.9% to 245,900 yuan (US$34,291) and lowered the Model Y's starting price to CNY258,900 from CNY266,400 on Friday.
Tesla's recent price reductions have hurt overall sentiment in the auto industry, Daiwa Capital Markets analyst Kelvin Lau said in a research note. The pricing pressure, together with Chinese EV makers' lackluster January sales so far, triggered the selloff, Lau said.
NIO's month-to-date insurance registrations, a gauge of retail sales, have fallen 27% from the previous month, according to data compiled by Citi. XPeng's insurance sales have dropped 62% so far, while Leapmotor's has declined 30%. China's EV sales could fall 30% in January from December, Citi analysts led by Jeff Chung said in a note.
Tesla's price cut on models in the CNY200,000-CNY300,000 range, where most of XPeng's products are positioned, could pose a threat to the Chinese EV maker, the Citi analysts said in a separate note recently.
Several investment banks, including Citi and HSBC Qianhai, recently lowered their target prices on NIO's and XPeng's ADRs and H shares, citing intense competition and pricing pressures.
Write to Sherry Qin at sherry.qin@wsj.com
(END) Dow Jones Newswires
January 17, 2024 00:58 ET (05:58 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.-
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