10.03.23
EV startups and traditional automakers ("legacy" auto companies) are in a race to secure market dominance. Let's assess the growth, pricing, and profitability of the newer players:
Growth and Deliveries:
BYD: Demonstrated a strong YoY growth of 67%, with Q3 2023 deliveries of 431k BEVs, up from 258k in Q3 2022. Furthermore, they sold 393k Hybrids in Q3 2023.
LI Auto: Impressed with a 300% YoY growth, with Q3 2023 deliveries of 105k (all Plug-in Hybrid SUVs), up from a mere 26.5k in Q3 2022.
Xpeng: Witnessed a 36% YoY growth, with deliveries reaching 40k BEVs in Q3 2023, an increase from 29.5k in Q3 2022.
NIO: Showcased a robust 75% YoY growth, with Q3 2023 deliveries of 55.5k BEVs, a considerable jump from 32k in Q3 2022.
Tesla: Although a pioneer in the EV industry, it showed a relatively modest YoY growth of 27%. Tesla managed 435k BEV deliveries in Q3 2023, up from 343k in Q3 2022.
Rivian: Marked a significant YoY growth of 137%, delivering 15.6k BEVs in Q3 2023, up from 5.6k in the previous year's same quarter.
Lucid: Presented a 200% YoY growth, with Q2 2023 deliveries of 1,404 BEVs, up from 679 in Q2 2022. However, their growth seemed stagnant when compared to Q3 2022's 1,398 deliveries.
Average Selling Price (ASP):
BYD: Their ASP was $23k in 2021, which peaked at $30k in 2022 but is expected to settle around $26k in 2023.
LI Auto: Saw a decrease in ASP from $49k in 2022 to $45.5k in 2023.
Xpeng: Their ASP dipped slightly from $32k in 2022 to $30k in 2023.
NIO: A premium player, its ASP reduced from $55k in 2022 to $51k in 2023.
Tesla: Experienced a drop in ASP from $53k in 2022 to $47k in 2023.
Rivian: An outlier in the trend, Rivian’s ASP rose from $84k in 2022 to $89k in 2023.
Lucid: Known for their luxury segment, their ASP drastically reduced from $139k in 2022 to $107k in 2023.
Profitability:
BYD: Their profitability climbed over the years, reporting a +5% net profit margin in 2023, the same as +5% in 2022.
LI Auto: Made a commendable turnaround with a +8% net profit margin in 2023, a stark improvement from -4.4% in 2022.
Xpeng: Financially struggled with a sharp decline to a -55% net profit margin in 2023, from -34% the previous year.
NIO: Its financial health deteriorated to a -70% net profit margin in 2023, a significant drop from -30% in 2022.
Tesla: Retained a healthy profitability at +11% net profit margin in 2023, although it decreased from +15.5% in 2022.
Rivian: Showed financial improvement but still at a -107% net profit margin in 2023, a better figure compared to -400% in 2022.
Lucid: Experienced a daunting -500% net profit margin in 2023, a deterioration from -200% in 2022.
All these EV companies have grown 50% or more YoY since production started and are expected to grow similarly or higher at least in Deliveries.
It would be interesting to compare these companies to Legacy Auto, especially the US ones.
Even though Their EV component might grow nicely YoY, the heavy weight of soon dying ICE component is going to pull these companies down as it declines especially now after the UAW strike.
If you look at the Deliveries of the Legacy companies, you can see a huge decline since 2016.
This trend bottomed locally in 2022 Due to the supply chain crisis and chip shortage following the Pandemic response.
These delivery declines in the last 2 years were accompanied by price hikes and temporary record profits.
In 2023 prices began collapsing, and these price drops will continue for a while given the recession threats, high inflation, and interest rates reducing the net profit of all companies.
However, the biggest force lowering prices in the Automobile market is Tesla and China's EV industry.
China's EV sector, although controls over 35% of the world BEV market, is still not directly affecting the US, only through Batteries, Rear earth metals, and Tesla which manufactures more than 50% of their cars in China.
2023 is shaping up to be an illusion of delivery "recovery" for legacy Auto after a disastrous 2022 bottom in terms of deliveries, while net profits and margins will be declining.
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