XPEV - Why Nio XPeng and Li Auto Crashed Friday
Shares of Chinese electric vehicle (EV) makers were plunging Friday morning. Nio (NYSE: NIO) , XPeng (NYSE: XPEV) , and Li Auto (NASDAQ: LI) lost between 12.5% and 17% at the lows of the morning. As of noon ET, Nio was still lower by 7.1%, XPeng was down 14.1%, and Li dropped 8.3%. It wasn't news from these companies that caused the plunge, though. It was thanks to global EV leader Tesla .
Tesla cut prices for its vehicles in China for the second time in less than three months. Investors feel that means a demand problem is ongoing -- or accelerating -- and are fleeing China-based EV stocks as a result.
It also means that Chinese buyers can spend less to buy Tesla's Model 3 sedan or Model Y SUV than for the China-based manufacturers offerings. Tesla now offers the Model 3 for the equivalent of about $33,000 in China, about 30% cheaper than it sells for in the U.S. The Model Y can now be had for less than $40,000 in China.
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Why Nio, XPeng, and Li Auto Crashed Friday