Nio Stock, XPeng Need A Win. Will Their New EVs Drive Turnaround?

Nio (NIO) and XPeng (XPEV) are banking on upcoming new electric vehicles to revive their EV sales, with key events due Wednesday. NIO stock is trading near a key level Tuesday.


New Nio ES6 SUV Fastest To Ramp

China EV startup Nio is set to launch an upgraded ES6 SUV on Wednesday, with deliveries starting the next day.

The ES6 will be the startup’s fastest model from launch to delivery. Nio is trying to catch up with startup rival Li Auto (LI), which has won praise on Wall Street for superior execution, including deliveries, in the competitive China EV market.

Nio’s ES6 first launched in 2019 and has been a key contributor to its EV sales. Last Friday, the EV maker began deliveries of an updated ET7 luxury sedan as well.

New G6 SUV To Drive XPeng Turnaround?

On Wednesday, startup rival XPeng reports for the first quarter. XPeng’s earnings report may matter less than any updates on the upcoming G6 SUV.

XPeng is supposed to start deliveries of the new G6 by end of the current quarter, with the first models coming off the production line this week.

Deutsche Bank analyst Edison Yu believes the G6 could revive XPeng’s fortunes in the second half of 2023.

Nio’s EV sales fell 35.9% in April from March, while XPeng’s sales were up a modest 1.1%, continuing a soft patch.

Their Q1 deliveries, especially XPeng’s, far trailed those of rival Li Auto, whose new L7 SUV is seeing early success. Li Auto also is profitable, in contrast to Nio and XPeng.

Nio Stock, China EV Stocks

Shares of Nio eased 0.5% to 8.75 on the stock market today. Nio stock is back above the 50-day moving average for the first time since mid April. It remains far below the 200-day average.

XPEV stock lost 3.2% to 9.11 Tuesday, below both the 50-day and 200-day lines. LI stock shed 2.4%. It remains above key averages after topping a double-bottom buy point May 10.

New Electric SUVs Challenge Model Y

When XPeng reports early Wednesday, Deutsche Bank’s Yu expects lackluster earnings and muted Q2 delivery outlook. Deliveries of the new G6 SUV won’t start to make a difference before the third quarter.

The G6 could mark a return to relevance for the embattled startup, Yu said in a note to clients May 17.

“Our view is XPeng will price G6 below Model Y in hopes of attracting consumers with its sleeker design and newer interior,” Yu wrote.

Nio’s ES6 SUV and Li Auto’s L7 SUV are also sometimes seen as rivals to the Model Y, a bestselling EV in China.

This year, Tesla (TSLA) cut prices of the Model 3 and Model Y in China and globally.

Those cuts helped fuel Model Y sales while triggering a price war. The Chinese EV startups, as well as Chinese EV giant BYD (BYDDF), responded with tit-for-tat cuts.

TSLA stock slipped 1.6% to 185.77 Tuesday, ending a five-session win streak. It’s moving toward a 207.89 buy point. BYD stock shed 2.2%, but is in buy range from a cup-with-handle breakout in May.


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