Very bad news for Li Auto, XPeng, Lotus Technology and Nio stocks

on May 21, 2024
  • Li Auto published weak financial results on Monday.
  • XPeng will release its first quarter on Tuesday this week.
  • These results mean that Chinese EV companies are still struggling.

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It’s another bad week for Chinese electric vehicle companies like Li Auto (LI), XPeng (XPEV), Nio (NIO), and Lotus Technology (LOT) as signs show that the industry is deteriorating with no end in sight. 

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Last week, the biggest news was the decision by Joe Biden to levy tariffs on Chinese companies in a bid to protect the domestic industry. Of course, these tariffs will likely not work out as most companies will simply move their manufacturing plants to Mexico. 

The European Commission is also considering additional tariffs for these companies, a move that will attract retaliation from Beijing. Remember that China is the biggest trading market for some of the biggest European companies like Pernod Rickard, Remy Cointreau, LVMH, and Hermes.

China is also a pivotal market for European automakers like BMW, Volkswagen, and Stellantis. Most importantly, China has perfected the art of manufacturing, meaning that some of its car brands will be cheaper even with these tariffs. 

Nio vs Xpeng vs Li Auto vs Lotus

Li Auto vs Nio vs XPeng vs Lotus Technology

The latest bad news for Chinese EV companies came from Li Auto, often seen as the best player in the industry, which published weak financial results. Data showed that its total deliveries dropped to 80,400 in Q1, down from 131,805 in the previous quarter. The company delivered.

Li Auto’s vehicle sales came in at $3.4 billion in Q1, a 32% increase from the same period in 2023. Its vehicle margins dropped to 19.3% as companies continued slashing their prices to deal with the rising competition.

Li Auto also continued its loss-making streak. Its loss from operations came in at $81 million as its loss from operations dropped to minus 2.3%. As a result, the Li Auto stock price crashed by over 12% in New York, bringing the year-to-date performance to minus 42%. It plunged by over 17% in Hong Kong.

Other Chinese EV companies’ stocks have also dropped. XPeng’s stock dropped by about 43% this year while Nio has plunged by 42%. Lotus Technology shares have plunged from the year-to-date high of over $14 to about $8.54. 

The next crucial EV news will come out on Tuesday when XPeng publishes its financial results. Analysts expect that its revenue will come in at $850 million, down from over $1.8 billion in Q4.

Electric Vehicle (EV) Manufacturing Stock Market