Electric vehicle deliveries from Chinese EV giant BYD were consistent with expectations, providing a bright spot amidst ongoing concerns about the health of the Chinese car market.
Market Impact on BYD and Industry Leaders
The pivotal role of China as the primary market for new cars and EVs underlines the significance of recent developments. It’s not just BYD feeling the effects; competitors like Tesla are also closely monitoring the situation.
February Deliveries Overview
In its latest report, BYD disclosed that it delivered 54,908 all-electric vehicles in February, indicating a 39% decline compared to the previous year. Additionally, sales of plug-in hybrid vehicles decreased by 34%, with 66,840 units sold during the month.
Seasonal Factors and Yearly Performance
A portion of the decrease in sales was expected due to the Chinese Lunar New Year Holiday occurring in February this year, as opposed to January in 2023. Despite this, BYD’s year-to-date performance remains relatively stable, with a marginal 1% drop in all-electric vehicle sales and a 10% decrease in plug-in hybrid sales.
Stock Performance and Investor Sentiment
Following the delivery report, BYD saw a modest 0.7% increase in overseas trading. Despite this uptick, shares are still down by approximately 9% since the beginning of the year. The market’s response reflects growing investor apprehension regarding slowing new car demand in China, prompting industry players like Tesla to adjust pricing strategies to stimulate consumer interest.
Overall, these developments underscore the complex interplay between market dynamics and company performance in the evolving landscape of electric vehicles in China.
Chinese EV Market Outlook for 2024
Citi analyst Jeff Chung, an expert in tracking industry data, predicts a promising future for the Chinese auto market. In 2023, Chinese auto makers sold approximately 25.4 million passenger vehicles, with a significant portion being all-battery electric vehicles and plug-in hybrids. Specifically, 6 million all-battery electric vehicles and 2.7 million plug-in hybrid models were sold during that year.
Projections for 2024
Chung forecasts that the sales of passenger vehicles will reach 26.1 million in 2024, marking a 3% increase compared to the previous year. Among those sales, he anticipates about 7 million units of battery electric vehicles and 4.1 million units of plug-in hybrids. This significant growth indicates that an estimated 42% of all new car sales in China will be plug-in vehicles, surpassing the 34% recorded in 2023.
Potential Impact on EV Sector
The expected growth in China’s auto market presents a positive outlook for the electric vehicle sector. While it is still early to make definitive statements about the year’s performance, the initial months tend to be a slower period for car sales in China. Notably, Chinese EV companies such as NIO, XPeng, and Li Auto reported their February sales volumes, revealing insights into the market’s current trends.
Sales Performance of EV Peers
In February, NIO, XPeng, and Li Auto collectively delivered 32,928 units, reflecting a marginal decrease of 5% compared to the previous year. Nevertheless, their combined sales for January and February totaled 82,398 units, indicating an overall year-on-year increase of approximately 30%. Following the release of these figures, NIO and XPeng shares experienced a modest uptick in premarket trading, while Li shares saw a slight decline. Meanwhile, Tesla’s stock dipped by 0.5%, with S&P 500 and Nasdaq Composite futures remaining relatively stable.
