Chinese automotive stocks fall in Hong Kong, XPeng plunges over 6%, NIO and BYD fall over 3%

Chinese automotive stocks fall in Hong Kong, XPeng plunges over 6%, NIO and BYD fall over 3%

Chinese automotive stocks experienced a significant downturn in Hong Kong on June 12, 2025, with XPeng (XPEV) leading the decline by plunging over 6%. NIO (NIO) and BYD (BYD) also saw substantial losses, falling by over 3% each. The market volatility comes amidst a backdrop of intense price wars and regulatory pressures in the Chinese automotive industry.

XPeng, one of the leading Chinese electric vehicle (EV) manufacturers, saw its stock price plummet by more than 6% on Tuesday, June 12. The company's shares were trading at an all-time low, reflecting investor concerns over the company's financial performance and market position. XPeng has been facing intense competition from other Chinese automakers, including NIO and BYD, which have been aggressively expanding their product offerings and market share.

NIO, another prominent EV maker, saw its stock price fall by over 3% on Tuesday. The company's financial performance has been a subject of concern, with a net loss of RMB 6.7 billion (USD 938 million) reported in the first quarter of 2025. Despite the company's projections of a recovery in the second quarter, investors remain cautious, given the intense competition and the company's high debt levels.

BYD, the Chinese electric vehicle manufacturer, also experienced a significant drop in its stock price on Tuesday. The company's shares fell by over 3%, reflecting investor concerns over the company's ability to meet its sales targets and maintain its market position amidst the ongoing price wars. BYD has been facing criticism from steelmakers over long payment times and the company's aggressive pricing strategies.

The market volatility comes amidst a backdrop of intense competition and regulatory pressures in the Chinese automotive industry. In March, Chinese authorities issued new rules requiring big companies to settle most payments with suppliers within 60 days. However, suppliers have been concerned about loopholes that could allow companies to circumvent these rules [1]. The China Iron and Steel Association has also expressed concerns over the impact of the price wars on the industry's supply chain and the profitability of steel companies [1].

The ongoing price wars have put tremendous pressure on the industry's supply chain, with some automakers asking for price cuts of more than 10% since last year and delaying payments by months [1]. The intense competition has also led to concerns over the sustainability of the industry's business models and the long-term viability of some companies.

Investors are closely watching the developments in the Chinese automotive industry, given the significant market potential and the impact of the sector on the broader economy. The ongoing price wars and regulatory pressures are likely to continue shaping the market dynamics and influencing investor sentiment in the coming months.

References:
[1] https://ca.finance.yahoo.com/news/least-eight-chinese-automakers-pledge-015153545.html
[2] https://www.aol.com/stock-day-chinese-tesla-rival-123923759.html
[3] https://kr-asia.com/nio-says-the-worst-is-over-after-a-bruising-q1-now-it-has-to-prove-it
[4] https://theedgemalaysia.com/node/758071