On Thursday, Chinese electric vehicle (EV) manufacturers’ shares declined following Tesla’s overnight plunge amid its disappointing third-quarter earnings.
In Hong Kong, Xpeng shares significantly fell by 10.27% to HK$13.80. Li Auto dropped 1.95% to HK$32.75, NIO decreased 8.44% to HK$61.30, and BYD dipped 3.65% to HK$248.00.
Tesla’s largest battery supplier, Contemporary Amperex Technology Co. Ltd. (CATL), was also down by 1.34% to CN¥183.74.
On Wednesday, the US EV leader fell 4.78% to $242.68 after earnings for the third quarter missed expectations due to price cuts impacting its margin. Deliveries in the quarter declined, primarily due to production disruptions resulting from upgrade activities at several factories.
In the third quarter, Tesla produced 430,488 vehicles and delivered 435,059 units, down from its second-quarter production of 479,700 and shipments of 466,140 vehicles.
Furthermore, Tesla CEO Elon Musk has expressed concern about rising interest rates’ potential impact on car buyers. Musk also said the company was careful about fully tilting on the Mexico factory because of volatile macroeconomic conditions.
Musk struck a different tone from last year when he assured investors that Tesla was recession-proof.
Tesla has implemented multiple price reductions this year, especially in China, where it encountered intense competition from domestic carmakers. However, the strategy has significantly eroded the company’s margins despite helping it sustain demand.
BYD Outpaces Tesla in Quarterly Production
Build Your Dreams (BYD) now surpasses Tesla in quarterly production and is second to the US carmaker in global sales.
The achievement underscores China’s booming auto industry after overtaking Japan as the world’s top exporter this year. The success offers some optimism to the country’s slow economy, which is stumbling from a tough property crisis and record unemployment rate.
Berkshire Hathaway-backed BYD also sees a 102% year-over-year profit boost in the third quarter due to higher sales and margins.
Meanwhile, Beijing’s tensions are rising with key EV export markets like the US and the European Union (EU). As the world embraces cleaner technologies, it is a stark reminder of Western countries’ struggles to reduce reliance on Chinese goods.
Compared to its peers, BYD posted a modest decline on Thursday, sliding 3.40% to CN¥240.60.
