China EV Stocks Tumble Amid Concerns Over Slowing Sector Growth

(Bloomberg) — Shares of Chinese electric vehicle makers fell in Hong Kong on Friday amid growing concerns about the sector’s growth prospects.

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The shares of Li Auto Inc. fell 15%, the biggest drop since March, leading losses among Chinese electric vehicle startups. Nio Inc. and XPeng Inc. fell more than 6%, while BYD Co. fell 3.7%.

Electric vehicle makers, once a bright spot in China’s troubled stock market, have seen their fortunes decline amid bets that demand will shift to a slower gear as global growth slows. slow down Expensive stock valuations and a series of negative headlines, including a reduction in Warren Buffett’s stake in BYD, have also hurt sentiment.

“There is some market speculation today that Li Auto’s L8 orders are weaker than expected,” said Daisy Li, fund manager at EFG Asset Management. “Investors have been concerned about demand for electric vehicles for some time in the coming year, and stocks have been trending lower.”

Traders cited unverified reports of weaker-than-expected holiday orders for automakers as a trigger for selling. Companies typically don’t release standalone data on holiday orders, and investors will have to wait until next month to gauge their monthly sales.

MS cuts Li Auto, XPeng PT due to Covid controls, supply issues

Tesla’s lackluster delivery and the disastrous commercial debut of a Zhejiang Leapmotor Technologies Ltd. have also contributed to weak sentiment in the sector.

“Investors are concerned about the growth of electric vehicles next year,” said Daiwa Capital Markets analyst Kelvin Lau. The fall in share prices was also fueled by concerns that Li Auto’s sales are falling as the company transitions to a newer model.

Falling stock prices on Friday also reflected losses in the broader market. The Hang Seng Tech Index fell 3.3% while the benchmark Hang Seng Index fell 1.5%.

(Updates with Friday closing prices)

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