Electric Car Sales More Than Double In World’s Biggest EV Market, But Tesla Lags

Tesla

Electric cars again outpaced traditional vehicles as China auto sales continued their pandemic rebound in October. But Tesla (TSLA) trailed both Chinese car giant BYD (BYDFF) and a General Motors (GM) joint venture in the world’s biggest market for electric vehicles.

Electric Cars Lead China Auto Sales

Sales of new energy vehicles (NEVs), which includes electric cars,  surged 105% to 160,000, their fourth consecutive month of gains, according to China Association of Automobile Manufacturers (CAAM) data reported by Reuters on Wednesday.

That far outpaced overall China auto sales, which saw a 12.5% gain in October to 2.57 million vehicles.

Separate data out Monday also showed a steep increase in EVs. China electric car sales soared 137% to 121,000 in October, with overall NEV sales hitting 144,000, the China Passenger Car Association said. Total retail auto sales rose 8% to 2.02 million vehicles.

Also in October, Tesla’s Shanghai factory produced 22,292 Model 3 electric sedans, according to CPCA. Reports said that would suggest an annual run-rate of 275,148 vehicles at its current production pace. Based on October’s numbers, Tesla China could reach its 2021 target to manufacture 300,000 Model 3s by end of this year. Tesla also plans to make 250,000 Model Ys electric crossovers in 2021.

But while Tesla was No. 2 in terms of October production, trailing only the SAIC-GM Wuling joint venture, it was No. 4 in terms of October sales. That underscores that local Chinese demand is far below production capacity.

Tesla sold 12,143 electric cars in China in October, as a new price cut helped buoy demand. But Tesla trailed the GM-SAIC Wuling joint venture, Warren Buffett-backed BYD and another SAIC unit. Tesla also exported about 10,000 made-in-China Model 3 cars to other countries, after saying it would start exports to European markets on Oct. 20.

China auto sales crumbled at the start of the year due to the coronavirus outbreak. Year to date, sales are still expected to be down 7%, though that’s an improvement from earlier forecasts of an 11% decline, according to Bloomberg.

China’s Kandi (KNDI) fell 17% on Monday after reporting mixed quarterly results. Kandi swung to a net loss of 3 cents a share from EPS of 23 cents a year ago. Revenue dropped 41% to $18.7 million, as EV parts sales fell 67.4%, offset by a 51.6% gain in off-road vehicle sales. Analysts expected a net loss of 11 cents per share on sales of $21.6 million.

Kandi stock tumbled 23% on Tuesday before rising 3.4% on Wednesday.

In a heavy week for electric car stock earnings, Xpeng Motors (XPEV) and Li Auto (LI) are also teeing up to report. On Wednesday, Bank of America backed a buy rating on Xpeng stock while hiking its price target to 36.20. It cited a robust EV pipeline that should boost top-line growth.

Tesla Stock, Electric Car Stocks

Shares of Tesla rose 1.65% to 417.13 on the stock market today. Tesla stock continues to work on a 466 handle buy point, but is just below its 50-day line. GM dipped 0.6%, but is up 8.2% so far this week.

Among key China electric car stocks, Nio (NIO) rose 3.7% on Wednesday. Xpeng climbed 1.9% to 33.53 after surging past a 23.20 early entry and a 25.10 official buy point last week. Fellow Chinese IPO Li Auto retreated 1.1% to 24.97 after blasting past a 21.96 cup-with-handle buy point a week ago.

BYD stock, which trades over the counter in the U.S., lost 5.2%.

In China, local automakers including BYD, Nio, Xpeng and Li Auto are turning into formidable electric vehicles rivals to Tesla. In October, Nio’s monthly sales exceeded 5,000 for the first time.

Last week, Xpeng Motors reported a 229% year-over-year sales jump in October. That compared to a doubling for Nio and 85% gain for BYD. Li Auto, which kicked off mass production in November 2019, said October deliveries rose 5% month over month.

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