Nio shares fell on Tuesday after the company cut its Q3 delivery outlook. Meanwhile, Xpeng shares dive despite August deliveries nearly tripling in 2021. Yahoo Finance’s Myles Udland and Brian Sozzi share the details.
– All right. Let’s talk about some news here, Sozzi. And I know you’ve had your eyes on Chinese electric car maker NIO XPENG over the last year, really since we’ve been doing this show together.
I think I thought about these companies that all. And you are all over this story. And we’re seeing some pressure here.
NIO coming out. And talking about something that’s fallen off our radar, which is the chip shortage.
I’m happy I can, you know, have helped bring some of these companies like a NIO and an XPENG into your life magazine. That really makes me quite proud.
But nonetheless, this view I think that the Chinese automakers can decouple from what’s happening with US automakers before to General Motors pulling back on production. Even Toyota that they can decouple from this. They can’t.
And really at heart here with a NIO, and a lot of all automakers they’re using more chips. I mean, we’ve been talking about this throughout this year. More chips in these vehicles.
And they just can’t get these chips. And that’s what NIO is saying here today. They’re cutting their production outlook for the third quarter citing difficulties, getting chips for their cars.
Now, where I do find an interesting Rival XPENG is also out with its deliveries putting out really some big gains 172% for August. But not warning about a chip supply shortage.
So not only we’re not seeing a decoupling I think anymore between. US automakers and Chinese automakers, you might be seeing a decoupling on who can get chips and who can’t between NIO and XPENG.
– Yeah. Certainly still some challenges in those supply chains. And really a reminder that we are still in the throes I think of the pandemic crunch across industries and across geographies.
You know, here in the US, we can be very focused on used car sales, and we’re certainly focused on how many tanker trucks are sitting off the Port of LA, for instance right now that can’t be offloaded, so on, and so forth.
But certainly also in the Chinese economy, they’re dealing with a lot of the dynamics that we are as well. And I think those supply– those baseline supply problems that are hitting both those companies certainly in fashion today.
And also, you can see, you know, XPENG is– is certainly drafting off of that decline in NIO as well. I mean, these are two stocks that are probably not going to be, you know, to use a great phrase here.
The story of the stocks is not likely to decouple from one another. In other words, they will both sort of end up being plays on the Chinese market for better and for worse, right?
– Do you want to decode a couple, or do you want to leave it to me? Maybe you can go.
– Well the couple is just, you know. So the way they are– the way it’s usually done global economy, right? Can the US economy decoupled from the global economy? Let’s say the global economy is growing at 1%. Is it possible the US economy could grow at 3%? Or is it going to grow the track of– of the overall US economy?
So you’d say it’s an industry. So some cell phone market is growing at X%. Can Apple‘s growth decouple from that it? Be better then or worse than the industry? That’s like a rough idea, right?
– You know, it’s OK. You always impressed me. You’re the man.
– There you go. How about that?