Nio Deliveries Fell Last Month. What That Means for Tesla Stock.

Text size

Electric-vehicle deliveries at

NIO
,

XPeng
,
and

Li Auto

all dipped in January from a record December, snapping recent sales momentum. After a rush to beat incentive cuts, Chinese buyers have taken a little step back.

Investors are reacting with some caution Tuesday, but all the related stocks, including

Tesla

(ticker: TSLA), have been hammered to start 2022, limiting the disappointment and the damage.

XPeng (ticker: XPEV) delivered 12,922 vehicles in January, down from 16,000 in December. Li (LI) delivered 12,268 vehicles in January, down from 14,087 in December. NIO (NIO) delivered 9,652 vehicles in January, down from 10,489 delivered in December.

Combined, the deliveries came in at 34,842 vehicles in January, down from 40,576 delivered in December. The dip snapped a two-month streak of rising combined deliveries for the three Chinese EV makers.

December 2021 was the best month for the three on a combined basis. December was an incredible month for the entire Chinese EV industry. Retail sales grew roughly 130% year over year and EV penetration—including plug-in hybrids—of new car sales hit almost 23%.

January might not be as good when all the numbers are in. Car buyers appear to have rushed to beat purchase incentive cuts for EVs. Some incentives for EV purchases were cut as much as 30% beginning in 2022 as the government slowly weans the industry off incentives.

Incentive cuts, however, are not a surprise and that’s clear from the stock reaction Tuesday. NIO stock was down 1.5% ion Tuesday, but XPeng shares gained 1.3%. Li stock is up 1.6%. The

S&P 500
and

Dow Jones Industrial Average
were trading lower.

Tesla stock might be the most affected. China is the largest market for new cars, and new EVs in the world, making it a key market for Elon Musk’s company too. Tesla stock was off 3.3%. But shares gained 10.7% Monday following an analyst upgrade.

All the stock moves aren’t all that bad, even though falling demand and falling incentives aren’t good news. The January deliveries are only part of the overall stock equation and all three stocks have been badly beaten up for weeks amid rising interest rates which hurt valuations of highly valued stocks more than others.

The trio is highly valued. XPeng, Li, and NIO trade for about 4.3 times estimated 2022 sales on average. The

Russell 1000 Growth Index
trades for about 4.5 times. The S&P 500 trades for about 2.7 times.

The valuation has shown up in early 2022 trading. Coming into Tuesday, NIO stock has fallen 23% year to date, XPeng shares have fallen 30% and Li stock is off about 19%. The Russell is down about 9% while the S&P has dipped 5%.

Tesla stock, for its part, was down about 11% year to date, coming into Tuesday. It too might have baked in some of the bad news.

It’s been a rocky start to 2022 for Tesla, as well as and other EV, investors. The January dip is just one more thing to think about.

Write to Al Root at [email protected]