Nio, XPeng and Li Auto slide amid sell-off in Chinese tech names

Chinese electric vehicle stocks followed the tech sector down on Wednesday in a move being attributed at least partially to climbing Treasury yields which have set off risk-averse trading momentum

One of the catalysts for rising yields earlier in the day was Minneapolis Federal Reserve president Neel Kashkari, who said that the Fed would not pause its rate hikes if core inflation kept on accelerating.

There has also been renewed focus on the delay of key economic data from Beijing amid the communist party meeting and the implications of what that might indicate in regard to the Chinese economy.

The pessimism runs somewhat counter to a Chinese EV market that is still showing strong growth rates even if some expectations have been dialed back due to ongoing supply chain pressures. Some analysts have also pointed to the aggressive plan of Chinese EV players to get a toehold in Europe and the U.S.

“Chinese carmakers are starting to get a firm foothold on the European market, accounting for 5% of all BEVs sold so far this year. Based on current trends, they could be providing Europe with 9% to 18% of its battery electrics in 2025,” reported Transport & Environment in a new study.

Shares of Nio were down 11.38% at 1:32 p.m. on Wednesday. XPeng was off 10.81% and Li Auto shed 10.27%.

The latest drama with Chinese EV stocks arrives just ahead of Tesla’s Q3 earnings report. Read the TSLA earnings preview.

Author: Clark Schultz, Seeking Alpha