EV Deliveries Aren't The Reason For Li Auto, XPeng, And NIO’s Stocks Soar

On Wednesday, Chinese electric car stocks rose on hopes that the economic effects of Covid-19 lockdowns in China have started to subside.

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The positive economic news was sufficient to overcome the disappointing combined deliveries figures from EV manufacturers Li Auto LI +4.24%, XPeng XPEV +2.72%, and NIO NIO -3.93%.

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ADRs in Li Auto (ticker: LI) increased 5.1% in premarket trade on Wednesday, while shares of XPeng (XPEV) and NIO (NIO), which both reported quarterly earnings, increased 5.6% and 1.7%, respectively.

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Similar trends could be seen in all Chinese equities with American listings as well as the overall Hong Kong market, where the Hang Seng IndexHSI +4.21% rose 4.2%. The price of NIO's stock, which is listed in Hong Kong and is traded under the ticker "9866," increased 11% on Wednesday. Li (2015.Hong Kong) and XPeng (9868.Hong Kong) both had increases in their Hong Kong-listed shares of 8.6% and 9.6%, respectively.

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Official manufacturing purchasing managers index, or PMI, data released on Wednesday encouraged optimism around Chinese names by showing that, after a sluggish 2022, economic development in China was heating up more quickly than anticipated.

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Frequent Covid-19 lockdowns in China caused the second-largest economy in the world to slow down last year, which hurt Chinese stocks. However, the government promised to reopen at the end of 2022. The numbers, which showed the manufacturing PMI expanding at its highest rate in more than a decade, suggest that the effects of the shutdown have been wearing off more quickly than was anticipated.

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The fact that local producers reported steady rise in deliveries last month is beneficial for the Chinese EV stocks.

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In February, NIO delivered 12,157 vehicles, up from 8,506 in January. Although there were fewer deliveries in January than there were in December 2022 (15,815), January did have the Lunar New Year holiday.

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For the entire first quarter, NIO stated that it anticipates delivering between 31,000 and 33,000 vehicles. That suggests that 11,000 to 12,000 units will be delivered in March. That makes me unhappy. Moreover, NIO stated that first-quarter sales should total $1.6 billion. $2.5 billion was sought after by Wall Street.

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Li Auto increased the number of automobiles it supplied in February from 15,141 to 16,620. Li anticipates delivering roughly 53,500 units for the first quarter, which would mean that more than 21,000 vehicles were delivered in March. That would very certainly set a record for the business. In December, Li delivered 21,233 units.

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In February, XPeng delivered 6,010 EVs, a 15% increase from the 5,218 deliveries in January. XPeng hasn't yet provided guidance for the current quarter. On March 17, it releases its fourth quarter earnings.

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In February, the three EV manufacturers as a whole delivered 34,787 vehicles. This is an increase over the 28,865 that were supplied in January, but a decrease from the record 48,340 that were sent in December.

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Overall, Li Auto's deliveries were consistent with expert predictions. The deliveries made by XPeng and NIO fell short of Wall Street's expectations. Yet, all Chinese stocks are gaining from Chinese economic statistics.

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Tesla TSLA -1.48% (TSLA), which competes in China with these domestic brands, could also rise as a result of the delivery statistics. In premarket trading, Tesla stock increased 1.1%, outperforming futures following the S&P 500 index and Nasdaq Composite, which increased by 0.3% and 0.4%, respectively.