China is a major player in the electric vehicle market, with Chinese automakers selling around 2.9 million electric vehicles and even surpassing EV juggernaut Tesla. Li Auto and NIO, two Chinese electric vehicle startups that have seen increased sales in recent months, saw their share prices rise after they revealed a rise in their July electric vehicle deliveries.
NIO Inc. (NYSE: NIO), which is based in Shanghai, said that it delivered 10,052 EVs in July, an increase of 26.7% compared to sales in July 2021 but less than the nearly 13,000 EVs it sold in June. Li Auto, on the other hand, stated that it sold 10,422 units of the Li ONE SUV last month, increasing by 23.3% year over year. And like NIO, Li Auto also saw its EV sales dip in July compared to June.
Xpeng, which is currently one of the most popular EV makers in China, delivered more electric vehicles than Li Auto and NIO. Based in Guangzhou, the EV maker sold 11,524 in July, slipping from June sales but rising 40% year over year. Shortly after the companies released their July sales figures, shares of Li Auto raised by 3.8%, NIO shares went up by 2.3% and Xpeng shares rose by 0.2%.
The drop in sales compared to June is partly due to lockdowns caused by a resurgence of COVID-19 in China. In July, several major Chinese cities locked down millions of residents amid a surge of coronavirus cases. Companies caught in the lockdowns had to pause production until the government eased the restrictions in manufacturing hubs and allowed business activity to go on.
The three automakers were also affected by ongoing supply chain issues, rising raw materials costs and a shortage of crucial EV components such as semiconductors. NIO confirmed that a shortage of casting parts constrained the production of its EC6 and ET7 EVs in July. It said that despite the shortage, it was working with supply chain partners to acquire crucial production parts and speed up electric vehicle production in the next couple of months.
On the other hand, Li Auto and Xpeng did not reveal any supply chain disruptions, with Xpeng stating that it has begun taking reservations for its upcoming flagship G9 SUV, which will launch in September. Li Auto also revealed that it had achieved a major milestone after it produced the 200,000th Li ONE at its Changzhou facility last Monday.
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