NIO shares dip as chip shortage hits shipments. What there is to know.

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Covid-19 and the semiconductor shortage are hitting electric vehicle inventories again as Chinese electric vehicle deliveries in August fell short.

NIO

(ticker: NIO) the stock lost 1.1% at the start of the session.

XPeng

(XPEV) fell 1.4%.

The

S&P 500

is up about 0.2% and the

Dow Jones Industrial Average

is flat.

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Stocks (TSLA) slightly penalized Chinese delivery results before rebounding and recently rose 0.7%.

Li Auto

Stock (LI) is the only Chinese electric vehicle maker to counter the trend. Its August deliveries looked okay and stocks were up 1.7%.

NIO delivered 5,880 vehicles in August. Well below its monthly production capacity of around 8,000 vehicles and below the 7,931 vehicles delivered in July. Plus, the company cut the tips. Third-quarter deliveries are now expected to reach about 23,000, below the 24,000 expected when the company announced its second quarter results in early August. If there is a silver lining for investors, it’s that NIO’s forecast involves around 9,000 vehicles delivered in September. This means that he expects production and deliveries to rebound.

Citigroup analyst Jeff Chung focused on the potential rebound in his research report on Wednesday in reaction to the numbers. He notes the purchase of NIO shares and has a target price of $ 70 for the shares. It also assesses the purchase of XPeng shares. His target price for this stock is $ 53.40. He called XPeng’s numbers according to his expectations.

XPeng delivered 7,214 vehicles in August, better than the number of NIOs but below the 8,040 delivered in July. XPeng has not updated its forecast, possibly because it released second quarter numbers on August 26. The company plans to deliver 22,000 vehicles in the third quarter. This implies around 7,000 deliveries in September.

The other positive data point investors should hold on to is Li’s deliveries. Li delivered 9,433 vehicles in August. This is a new monthly record and up from the 8,589 delivered in July. But Li’s quarterly forecast calls for around 7,000 units to be delivered in September, so his deliveries are expected to decline in the coming month.

Together, the three Chinese electric vehicle makers listed in the United States delivered around 22,500 vehicles in August, compared to around 22,700 delivered in July.

China’s electric vehicle industry still faces supply chain constraints, which have been a headache for investors throughout the year, generating low returns and volatility. Heading into Wednesday’s trading, NIO and XPeng are down around 19% and 1%, respectively, while Li shares are up around 7%. All three stocks are down about 40%, on average, from their 52-week highs set in late 2020 or early 2021.

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