Nio stock was trading up at $11.21 at close: October 21, 04:03 PM EDT
Early on Monday, panic selling in China related to worries about the country’s economy slowing down significantly caused Chinese electric vehicle stocks to fall. While third-quarter GDP growth came in at 3.9%, exceeding expectations, it was still well behind China’s official full-year objective of 5.5%, the country’s lowest aim in thirty years.
New COVID restrictions in Guangzhou, which could affect supply chains and production, and the news that Tesla (NASDAQ:TSLA) lowered prices in China by up to 9% despite low demand are also pushing EV stocks down. The beginning price for the Model 3 car decreased from 279,900 Chinese yuan to 265,900 yuan ($36,615), and the price for the Model Y SUV decreased from 316,900 yuan to 288,900 yuan.
The price reductions follow Tesla CEO Elon Musk’s comments last week that “a form of recession” was underway in China and Europe and Tesla’s announcement that it will miss its vehicle delivery target for this year.
Monday’s premarket trading saw a 10.79% decline in Nio (NYSE:NIO) shares, an 11.44%declinen in XPeng (NYSE:XPEV), and a 10.25% decline in Li Auto (NASDAQ:LI). The performance of Tesla (TSLA) was better, with a decline of only 2.65%.
For more on Tesla’s expectations for China, check out the recording of the automaker’s earnings call.
Sales of NEVs in China
The China Passenger Car Association (CPCA) forecasts that in October 2022, China will sell 550,000 units of NEVs, up 73.5% year over year. Although year-over-year growth is anticipated for monthly sales, they may be down by 10% from the 611,000 units sold in September 2022.
In the first week of October 2022, significant automakers had a 26% year-over-year decline in their average daily retail sales due to an increase in Covid infections nationwide and weak holiday travel and expenditure. The second week saw a recovery in average daily retail sales, which increased 13% Y/Y.
Sales of passenger cars are anticipated to increase 11.4% year over year in October to 1.91M units. According to this, the penetration of NEVs in China’s retail sales is predicted to be at 28.8% in October, down from 31.8% in September. Tesla (NASDAQ:TSLA), Li Auto (NASDAQ:LI), Xpeng (NYSE:XPEV), and Nio (NYSE:NIO) all saw declines in pre-market trading.
Also, Tesla (NASDAQ:TSLA) has cut prices in China by up to 9% in response to a drop in demand. The manufacturer recently released its mixed Q3 numbers and cautioned that supply chain and logistical challenges could cause deliveries to have a modest hiccup in Q4.
Featured Image – Megapixl © Michaelvi
Author Jowi Kwasu 
