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EV stocks have been pressured amid Beijing’s moves to wean the industry off incentives.

Some subsidies for EVs were cut by 30% at the beginning of this year, and the overall incentive program will end in 2023, according to a joint ministry notice released at the end of December.

For January, XPeng delivered 12,922 vehicles and Li Auto delivered 12,268 vehicles, both more than doubling from a year earlier, according to data released this week.

BYD sold a total of 95,422 vehicles, of which new-energy vehicles more than quadrupled from the year-earlier figure to 93,168.

However, the companies’ deliveries were softer when compared with December.

During the month, XPeng and Li Auto delivered 16,000 and 14,087 vehicles, respectively, while BYD sold 93,945 new-energy vehicles.

Citigroup said in a note on Thursday that the market may wait until mid-February for more visibility on car sales after the Lunar New Year holidays, as strong performance in the fourth quarter and January may not necessarily signify a strong year ahead in terms of overall demand.

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China EV Sales: BYD's January Sales Skyrocket 362% After Xpeng, Li Auto, Nio Deliveries

China EV giant BYD disclosed January EV sales more than quadrupled after startups Xpeng Motors and Li Auto more than doubled January sales, outselling Nio, which grew sales by one third. That comes after China EV sales boomed in 2021.

China EV Sales Continue Hot

BYD sold 93,168 so-called new energy vehicles (NEVs) in January, up 362% vs. a year earlier.

That's just below December's 93,945, according to CnEVPost.com, which cited a regulatory filing. January's NEV total included 92,926 passenger vehicles.

Of those 46,386 were pure electrics, up 221% vs. a year earlier. Plug-in hybrids skyrocketed 761% to 46,540. Fuel-cell vehicles tumbled 90% to 2,254.

Overall, BYD sold 95,422 in January, up 125%. This means that NEV sales accounted for 97.6% of BYD's January total, the report said. NEVs include pure electrics, plug-in hybrids and fuel-cell vehicles.

In January, Xpeng sold 12,922 EVs, up 115% vs. a year earlier but down from 16,000 in December. Li Auto delivered 12,268 Li One hybrid SUVs last month, up 128% vs a year earlier but down from 14,087 in December. Nio sold 9,652 EVs, up 33.6% vs a year earlier but down from 10,489 in December.

XPeng said it's carrying out a technology upgrade at its Zhaoqing plant, part of a scheduled production downtime over the Chinese New Year Holiday. Last October, Nio upgraded its production line and vehicle deliveries dropped sharply that month.

In 2021, China EV sales surged 169% to a record 2.99 million vehicles, or 14.8% of new sales, according to the China Passenger Car Association (CPCA). China's electric cars are on track to reach a 20% penetration rate this year, well ahead of the government's 2025 forecast, according to South China Morning Post.

Nio more than doubled EV sales in 2021, despite production shutdowns caused by the global chip shortage. Meanwhile, Li Auto nearly tripled sales for all of 2021. Xpeng and Warren Buffett-backed BYD more than tripled 2021 EV and NEV sales.

China Cutting EV Subsidies

While January EV sales grew year over year, Warren Buffett-backed BYD, as well as Xpeng, Li Auto and Nio, all saw lower sales vs. December.

China cut its EV subsidies by 30% starting Jan. 1, with those incentives set to go away entirely after 2022. But those cuts may not affect sales right away, at least for some EV makers.

In December, Nio said customers who paid for a vehicle by Dec. 31, 2021, and receive it by March 31, 2022, can still avail the subsidies under the 2021 plan. Nio said it would pay the shortfall or difference under the 2022 policy.

Vehicle deliveries in January may also have been delayed by the Chinese New Year holiday, which runs Jan. 31-Feb. 6, and the week before, a peak travel time for the population. In 2021, the holiday began several days later.

www.investors.com/news/china-ev-sales-january-2022-after-2021-boom-nio-pops/