BYD stock is selling off this week as Warren Buffett’s Berkshire Hathaway (BRKB) disclosed it sold a sliver of its big holdings last week. BYD reported strong earnings earlier in the week.
Nio stock, Li Auto and Xpeng also are struggling.
August is somewhat of a transition month. Nio and Li Auto began deliveries of new models at the end of August, with Nio and BYD set to begin deliveries of other new EVs in September. Xpeng will launch a new vehicle later this year.
NIO shares edged up 0.4% to 19.91 on Wednesday, just below the 50-day line. The stock is in the midst of consolidation with an official 24.53 buy point, according to MarketSmith. However, in the current market environment extreme caution should be exercised.
For the first four weeks of August, Nio had 8,927 vehicle sales, according to the China Association of Automobile Manufacturers.
On Aug. 28, Nio launched deliveries of the ES7 SUV. Nio will begin deliveries of its ET5 sedan on Sept. 30, following the ET7 luxury sedan in March. Nio, which will also refresh its ES8 SUV soon, will have five EVs with the ET5.
The Shanghai-based Nio delivered 10,052 electric vehicles in July, jumping 27% vs. a year earlier but down 22% vs. June. July sales included 7,579 SUVs and 2,473 sedans.
July production of the ET7 and the crossover EC6 was constrained by supply issues, Nio said. The company reported it has been “working closely with supply chain partners” and expects accelerated production in the third quarter.
Nio is stepping up its European presence, sending the ET7 to several countries.
Nio announces second-quarter earnings on Wednesday, Sept. 7, before the market opens. Nio stock has a Composite Rating of 31. Its Relative Strength Rating is 32. It has an EPS Rating of 7.
Li Auto Stock
LI stock retreated 0.1% to 28.77 on Wednesday, again hitting resistance at the 200-day line. Shares have retreated sharply from the June 24 high of 41.49, especially since mid-July.
Li Auto sold 3,837 vehicles in China as of Aug. 28, according to China Association of Automobile Manufacturers reports.
That follows disappointing guidance on Aug. 15, with Li Auto expecting to deliver 27,000-29,000 vehicles in Q3. That’s down from Q2 and despite already reporting 10,422 deliveries in July.
The Li One SUV hybrid, which has been Li Auto’s only vehicle has seen demand suddenly plunge. The automaker is blaming cannibalization from its more-premium L9 hybrid SUV. Li began L9 deliveries on Aug. 30, with the automaker still expecting 10,000 L9 deliveries in September.
Li Auto says it’ll soon unveil the L8, a scaled-down L9.
Li Auto stock has a 62 Composite Rating out of 99. It has a 76 Relative Strength Rating. The EPS rating is 26.
China EV Sales: XPeng Stock
XPEV shares rose 1.4% to 18.52 on Wednesday. XPeng stock has struggled in 2022, hitting a 22-month low on Tuesday, not far from its August 2020 IPO price.
The China-based electric-vehicle startup reported a greater-than-expected loss while narrowly topping revenue expectations on August 23. XPeng reported a net loss of 46 cents per share while sales grew 87% to $1.1 billion.
Total vehicle deliveries for the second quarter increased 98% to 34,422. XPeng’s July sales reports showed the company’s total sales outpaced both Li Auto and Nio. The company delivered 11,524 vehicles in July, a 43% increase year-over-year. In the first four weeks of August, XPeng has delivered 8,380 vehicles, according to China Association of Automobile Manufacturers.
XPeng currently has a three-vehicle lineup, with the new G9 sedan on the way. The carmaker started accepting reservations for the G9 in August, followed by an official launch in September 2022, XPeng has announced. This new flagship SUV is set to replace the aging G3.
For Q3, XPeng expects vehicle deliveries of 29,000-31,000, a decline from Q2. With July deliveries in hand, XPeng expects August-September deliveries combined will be below 20,000.
XPEV stock has a weak 11 Composite Rating out of 99. It has an 8 Relative Strength Rating, also very weak. The EPS rating is 2.
BYDDF stock fell 4.35% to 30.75 in Wednesday’s stock market trading, the lowest since mid-May. Shares of the EV and battery giant tumbled 7.8% on Tuesday, breaking below its 200-day moving average. Shares hit a record 43.61 on June 28.
The catalyst for BYD stock’s plunge? Warren Buffett’s Berkshire Hathaway said on Aug. 30 that it sold 1.33 million H-shares on Aug. 24 in Hong Kong, less than 1% of its big stake. Berkshire still owns slightly less than 8% of BYD, but there is concern that it’ll keep selling shares.
BYD stock had already plunged July 12 on rumors that Buffett would sell some or all of his longtime stake. Cathie Wood’s Ark Innovation ETF (ARKK) also owns a small stake in BYD, as well as Nio and XPeng stock.
On Monday, BYD announced it had tripled its net income in the second quarter, easily beating views. BYD had previously said it sold 355,021 new energy vehicles (NEVs) in Q2, ballooning 256% year-over-year and 24% vs. Q1. NEVs include fully electric vehicles, plug-in hybrids and fuel-cell vehicles.
Tesla (TSLA) reported Q2 deliveries at 254,695, a drop of nearly 18% from Q1. Elon Musk’s EV giant still leads BYD in sales of all-electric vehicles, but that gap is narrowing.
On Aug. 3, BYD reported record July sales of 162,350 electric vehicles and plug-in hybrids, up 222% vs. a year earlier. Through Aug. 28, BYD had sold more than 136,000 vehicles in China in August, according to data from the China Association of Automobile Manufacturers.
The automaker is rolling out several new EV-only and hybrid-only models in the coming months. The Seal sedan is BYD’s first clear cut competitor to Tesla’s Model 3. The vehicle has roughly equal dimensions and range to a Model 3 — and $10,000 cheaper.
Deliveries are expected to start in the next few days. BYD said Seal preorders had topped 60,000 since they opened on May 20.
BYD has several other models launching in the next few months. It’s also entering Australia, several other Asia-Pacific nations and Europe in the next few months. It’ll enter Japan in 2023.
BYD does not have a Composite Rating, a key IBD benchmark. But it has a 58 Relative Strength Rating, an exclusive IBD Stock Checkup measurement for share price movement with a top grade of 99. The EPS rating is 77.
Please follow Kit Norton on Twitter @KitNorton for more coverage.
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