China EV shares are feeling the heat as price war concerns grow

Shares of Hong Kong-listed Chinese electric vehicle makers fell on Tuesday as worries about a price war in the industry grew.

China’s electric vehicle market is the world’s largest and most crowded and faces fierce competition from local companies as well as U.S. giants Tesla Win as much market share as possible through promotions and price cuts.

Ding Yuqian, head of China automotive research at HSBC, said: “While across-the-board price cuts will put pressure on near-term earnings and margins, this may be offset by rising demand as electric vehicles gain appeal to a wider range of consumers.” Qianhai told CNBC.

Ding said that while consumer interest is improving, the sentiment of “waiting for better prices” continues to limit sales by electric vehicle manufacturers.

At least 30% of China’s entire automobile market is electric vehicles, most of which are from local brands.

Most Chinese electric vehicles continued to face pressure on Tuesday.Hong Kong listed stocks ideal car fell 3.9%, while Nioh Share price fell 3.6% Xpeng down 1.8%. BYD Shares rose 0.4%.

Nio will report its December quarter earnings later in the day.

Competition in the country’s electric vehicle sector has intensified as local automakers strive to overtake U.S. rival Tesla in sales Advanced technology and competitive price.

Li Auto launches new An electric car called “Mega” — A multi-purpose vehicle priced at 559,800 yuan ($77,756), with deliveries scheduled to begin in March. The minivan comes with a built-in refrigerator and sofa.

Li Auto said last week 20,251 vehicles delivered in February, an annual increase of 21.8%. However, January deliveries fell 35% from January’s 31,165 units.

starsupported Leap car It is understood that its new electric version of the C10 SUV has been reduced by nearly 20% from the pre-sale price. South China Morning Post.

The South China Morning Post quoted Zero Sports Car founder and CEO Zhu Jiangming as saying, “We have always reiterated that Zero Sports Car is priced based on production costs.”

Morgan Stanley research shows that Xpeng Motors and NIO’s market share is declining in various regions, while BYD’s share has grown in major cities but has declined in less developed regions because of In these areas, competition from state-owned enterprises has intensified.

Analysts at U.S. investment banks said Li Auto’s market share declined in the last quarter of 2023 as investors continued to focus on whether the company’s new models launched last week would provide a boost.

The company’s Yuan Plus crossover, known as the Atto 3 overseas, is reportedly priced lower than its discontinued predecessor. Reuters.

“BYD’s unparalleled cost structure and product innovation capabilities, stemming from its high degree of vertical integration, will enable the company to thrive in the ongoing electric vehicle race in China and overseas,” Bernstein analysts wrote in a client note. develop.”

Bernstein predicts that demand in China’s electric vehicle market will grow by about 25% annually, while competition is becoming increasingly intense amid “continued pricing pressure.”

In an official statement released at China’s high-profile “two sessions” meeting on Tuesday, Beijing said it would promote the development of the new energy industry through various measures, including reducing electric vehicle purchase taxes, supporting construction and other infrastructure measures. contributed to the development of the industry. By “2023, new energy vehicle sales will grow by 37.9%.”

The document stated that in order to ensure the smooth flow of logistics, support will be given to adding 10 new national comprehensive freight hub cities to support the operation chain.

Just last week, Chinese President Xi Jinping called for further support for the development of new energy vehicles, especially Build charging infrastructure.

—CNBC’s Evelyn Cheng contributed to this article.