Consumer Discretionary

Report by JL Warren Capital

Deliveries plummet in Oct and the XPeng G9 faces weak demand and unstable supply - JL Warren has noticed a sharp decline in delivery posts on social media for the P7, P5 and G3, and no mention of G9 deliveries posted by owners. They have also heard that the new plant in Guangzhou (which makes the G9 exclusively) is still operationally unstable, and not ramping up volume as expected. Expects <1-2k production of G9 in Oct and total deliveries to be well under 8k. The EV manufacturer is suffering from increasingly negative PR, both on the product and corporate level.

Consumer Discretionary

Report by Silk Road Research

TSLA China analysis: SRR’s latest checks suggest recent controversies are taking a toll with NIO, XPeng and Volkswagen the main beneficiaries. Feedback from dealers was consistent - there has been a clear increase in cancellations and a decline in foot traffic. Prospective buyers are adopting a ‘wait and see’ approach which increases the risk for a downside surprise in registrations over the coming months. Combined with a significant narrowing of lead times for the Model 3 (1-3 weeks from 2-7) and Model Y (1-3 weeks from 3-9) leaves SRR very bearish on near-term prospects.

Consumer Discretionary

Report by Silk Road Research

NEV market share continues to rise - SRR expect NEV sales to remain strong in 2021 (+40-60%), with the NEV penetration rate increasing by +150-250 bps, placing China ahead of its path to “20% by 2025”. Highlights Volkswagen as the next China EV play; well placed to gain market share due to its attractive pricing (avg. ~230K RMB) and impressive new launches. Among the domestic brands they prefer Nio and Xpeng over Li Auto.