Morgan Stanley Out on China EVs (NIO) (XPEV) (LI)

September 6, 2022 10:32 AM EDT
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  • Morgan Stanley Out on China EVs

Analyst Tim Hsiao comments "Both NIO and Li Auto's weekly sell-through improved sequentially in early September. NIO registered 2.9k units of sales during the week and continued to lead the EV trio in terms of volume. The sequential growth in ES6 and ES7 partly offset the slowing shipments of ET7 and EC6, still adversely affected by lingering supply bottlenecks of die-casting parts. All eyes are on NIO's 3Q guidance – investors with whom we spoke are conservatively looking for a sales target of 32-33k in 3Q, or 11-12k in September. 4Q upside hinges on a smooth production ramp-up of ET5 at NIO's second plant, with delivery starting from September 30. Separately,Li Auto's weekly run-rate finally regained the 1.5k mark, within which L9 jumped to 724 units in the week. It's worth noting that some L9 previously scheduled for August delivery have now ben carried over to September."

Regarding XPEV the analyst comments "On the other hand, XPeng's weekly run rate decelerated sequentially to 1.8k over the past week (vs. the average of 2k per week in August), of which the majority was still delivered in August. Our recent checks suggested a sequential slowdown in foot traffic and order intake at XPeng's major flagship stores in Tier 1 cities witnessed in August, but things should start to pick up with test drives for G9 starting in September. While continuing its vehicle promotions, XPeng looks for a more meaningful MoM upturn in September sales, implying upside to the company's sales guidance of 29-31k units in 3Q22."

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