The automotive Hong Kong stock market fell overall today, with the sector leading the decline overall. As of press release, Zero Run Motors has fallen by over 15%, NIO SW (09866. HK) and Great Wall Motors (02333. HK) have both fallen by nearly 5%, Ideal Motors W (02015. HK) and BYD (01211. HK) have both fallen by over 3%, while Xiaopeng Motors W (09868. HK) and GAC Group (02238. HK) have followed suit.
On the news, Tesla's main battery supplier, Panasonic, announced in its financial report released on Monday that its battery production significantly decreased by 60% in the third quarter, resulting in a 15% reduction in its battery department's annual profit forecast due to Tesla's lower than expected sales of high-end electric vehicles.
Subsequently, Tesla's US stock market plummeted nearly 5% on Monday, breaking below $200 and reaching its lowest closing price since the end of May. This news has also sparked market concerns about the demand for new energy vehicles in the fourth quarter.
In addition, there are reports that according to the sales data disclosed by various car companies, as of the end of the third quarter, the completion rate of the annual new energy vehicle sales targets of many car companies is worrying.
Annual sales progress of new energy vehicles by some car companies
Overall, only Tesla, BYD, Ideal, and Geely have achieved 70% of their annual sales targets. The actual sales of NIO and Xiaopeng have not even reached half of the original target.
After the peak season of the "Golden Nine", the time left for car companies to achieve their annual performance goals is also decreasing. However, sales directly affect the revenue and performance growth of car companies, and also raise market expectations for the end of the year price war upgrade in the car market.
According to data from the China Passenger Car Association, the overall market discount rate for passenger cars in mid October was about 18.7%, further lowering from the terminal discount level of 18.5% at the end of September and reaching the highest level in recent years.
On the other hand, under the promotion strategy of "exchanging price for quantity", the profitability of car companies will be affected.
Recently, Cui Dongshu, Secretary General of the China Association of Automobile Manufacturers, wrote that the automotive industry's revenue in September was 949.8 billion yuan, a year-on-year increase of 7%; The cost is 821.9 billion yuan, an increase of 8% year-on-year; The profit was 42.4 billion yuan, a year-on-year decrease of 14%. The profit margin of the automotive industry is only 4.5% (4.9% in the first nine months).
In a report on October 31st, the new energy team of Minmetals Securities pointed out that based on the performance disclosed in the third quarter report of car companies, the majority of car companies' revenue increased while profits significantly decreased due to the impact of price wars, and sales were not effectively converted into profits. After entering the fourth quarter, the profitability of car companies in terms of performance still needs improvement.
Minmetals Securities believes that from a retail perspective, the quarter is a sales sprint period. In order to achieve the annual sales target, vehicle manufacturers and dealers will introduce profit sharing policies to stimulate demand. At the same time, the base in Q4 2022 is relatively low, so it is expected that the retail growth rate in Q4 2023 will remain stable and will not continue to decline significantly.