- Chinese auto OEMs delivered strong sales growth in Dec, supported by sales promotions, demand pickup, and new vehicle models
- Li Auto sold over 50.4k vehicles in Dec-23, a record-high month and slightly beating its monthly target of 50k; BYD slightly overachieves its 2023 guidance by delivering 3.02m vehicles; Xpeng misses the full-year guidance but Dec deliveries recorded strong y-o-y growth; Hozon saw weak momentum by only selling 5.1k in Dec-23, recording 34%/59% y-o-y/m-o-m decrease.
- Expect EV makers to continue engage in price war and promotional activities to boost sales in 2024
- Strong Dec-23 vehicle deliveries are expected to boost share price sentiment of BYD, Li Auto and Xpeng in the near-term
What’s new
Several Chinese automakers have released their Dec-23 vehicle shipment numbers. We believe the numbers are strong, thanks to sales promotions of the automakers, demand pickup and the rollout of new vehicle models. Most of the EV players posted vehicle shipment y-o-y growth of 13-140% as shown in the table below. Li Auto’s Dec delivery reaching record high at 50.4k in Dec, slightly exceeding management’s monthly target of 50k. Li Auto also announced that the Company delivered its 600k-th vehicle in mid-Dec, first among NEV startups. Hozon was the outlier among all EV players. It sold only 5.1k vehicles in Dec-23, representing a 34% decrease y-o-y and a 59% decrease m-o-m.
We expect the divergence of performance among EV players to continue in 2024, when the market is believed to be more competitive. We expect EV makers to continue engage in price war and promotional activities to boost sales and market shares in 2024. However, the overall share-price performance of the auto sector was impacted by the volatility of the stock market in 2023, despite some Chinese auto OEMs have achieved better vehicle sales than peers. With strong vertical integration and broad product offerings, we believe BYD has solid fundamentals to face the growing competition in the upcoming year. Li Auto’s monthly sales of 50k in Dec-23 shows strong underlying fundamentals and is the highest among NEV startups. We believe the rollout of Li Mega and three new BEV models in 2024 can allow Li Auto to expand into the BEV market, a growth opportunity for the Company in the medium term. Hence, the strong Dec-23 vehicle deliveries are expected to boost the share price performance of BYD, Li Auto and Xpeng in the near-term.
