Chinese EV makers are expected to see a material improvement in deliveries in June as work and production resume in Shanghai, according to Edison Yu's team.
China's major electric vehicle (EV) makers released May delivery figures on Wednesday, demonstrating a general recovery from the severe hit they took from Covid in April.
In a research note sent to investors Wednesday, Deutsche Bank analyst Edison Yu's team provided their take on deliveries by what they called the "Fab 5" EV makers – NIO (NYSE: NIO, HKG: 9866, SGX: NIO), XPeng Motors (NYSE: XPEV, HKG: 9868), Li Auto (NASDAQ: LI, HKG: 2015), Zeekr, and Neta.
Sales of Fab 5 China EVs were better than expected in May as the sector began to recover from the Covid lockdowns, the team said, adding that material improvement is expected in June as work and production resume in Shanghai.
Li Auto took the top spot in sales in May, with deliveries more than doubling month-on-month. NIO continues to increase sales of its newly launched flagship model, the ET7, which is poised to be one of the most sought-after premium vehicles on the market this year, according to the team.
The Chinese government is also taking more aggressive stimulus measures to boost economic activity by cutting purchase taxes on vehicles with low emissions below RMB 300,000 for internal combustion engine vehicles and developing policies to encourage rural sales of EVs, the team noted.
Specifically, for NEVs (NEVs), Yu's team reduced its full-year forecast by 300,000 units to 5.2 million, representing a penetration rate of about 25 percent, given the disruptions experienced in the past few months.
Here is their specific take on Fab 5 deliveries:
Li Auto delivered 11,496 units (+176% MoM, +166% YoY), beating our forecast, as the impact from parts shortage improved. We expect June to see further sequential improvement.
Li Auto exited the month with 233 retail stores and 293 servicing centers. We also update our LI model, forecasting 28,000 vehicle deliveries for 2Q, above guidance 21,000-24,000 and 155,000 for the full-year 2022E.
XPeng delivered 10,125 units (+12% MoM; +78% YoY), slightly above our forecast.
XPeng returned back to double-shift production at its Zhaoqing plant in mid-May which accelerated the delivery of a large number of orders accumulated since the first quarter. The company exited the month at nearly a 4,000 unit/week production rate. We expect June to improve meaningfully up to ~15,000.
NIO delivered 7,024 units (+60% MoM; +5% YoY), exceeding our forecast. Production has gradually recovered from the impact of the COVID-19 lockdowns but still remains heavily impacted.
ET7 sales continued to ramp with May delivering 1,707 units vs. just 693 in April. The order book also appears to be recovering in Shanghai. We expect June to see further MoM improvement.
Zeekr was able to increase sales of its flagship 001 model sequentially, delivering 4,330 units, up from April's 2,137.
Hozon sold 11,009 units of its Neta-branded BEVs (+25% MoM; +144% YoY).