Investors are worried about intensifying competition: Li Auto's shares in the Hong Kong stock market tumbled 13%, while those of BYD, XPeng and NIO dropped more than 5%.

On July 30th, Beijing time, affected by the overnight U.S. stock market, which dropped from a 6% gain to a 6% loss at the opening, Li Auto, also listed on the Hong Kong Stock Exchange, tumbled at the opening. Its stock price remained weak throughout the day, closing with a 12.84% decline at HK$104.500, slightly higher than the intraday low of HK$104.100.

The sharp drop of Li Auto was within expectations. What was unexpected was that CATL, BYD, XPeng, and NIO, all listed on the Hong Kong Stock Exchange, all recorded declines of over 5%. CATL's decline was even close to 8%. However, CATL plunged after hitting a new high of HK$468.0 on the Hong Kong Stock Exchange (corresponding to a market value of HK$1.95 trillion and an A-share market value of RMB 1.26 trillion. The Hong Kong stock was obviously overvalued, after all, it is a core new energy asset in China, worthy of overvaluation by foreign investors), with an intraday decline of over 10% (calculated based on the intraday high and low).

Among the new energy stocks also listed on the Hong Kong Stock Exchange, Leapmotor rose slightly by 0.16%, while Xiaomi fell by 0.99%.

Therefore, it cannot be simply attributed to a sector-wide decline.

Perhaps, this is the secondary market investors selling in advance the stocks facing fierce competition, including the new forces such as NIO, XPeng, and Li Auto, as well as BYD, the global champion in new energy vehicle sales. Is the official launch of the i8 the signal for investors to believe that a new round of competition has begun, thus prompting them to sell in advance?

Let's return to why Leapmotor and Xiaomi were able to remain relatively stable today when the sector was generally falling. Judging from the stock price trends in recent days, Leapmotor's stock price has returned to the upward channel, while Xiaomi's is in a downward trend, with a cumulative decline of over 6% in the past four consecutive trading days.

Leapmotor's stock price was able to return to the upward channel because it achieved a single-quarter profit in Q4 of 2024, but failed to maintain profitability in Q1 of 2025. However, Haitong International believes that Leapmotor is expected to achieve profitability in Q2 of 2025, mainly due to a significant increase in sales, with an expected net profit attributable to the parent company of RMB 120 million, corresponding to a net profit margin close to 1%. Perhaps Leapmotor can achieve annual profitability in 2025!

For Xiaomi, the expectations have been fully priced in, and there are no more positive factors in the short term. The stock price has already reflected in advance the delivery volumes of the SU7 and YU7. Next, it depends on Xiaomi's production capacity release, the launch of new models, or the progress in AI. Previously, the Xiaomi AI glasses sold out quickly after their launch, but the reviews were not very good.

Returning to BYD, XPeng, and Li Auto, which tumbled today, their sharp drops were really unexpected. From a post-market perspective, considering Leapmotor's strong stock price, and seeing that BAIC BluePark in the A-share market is on an upward trend, Jianghuai Automobile is hitting new historical highs, and Seres' stock price (down 0.43% today) is also relatively stable, the stock price trends of each company may be closely related to their existing orders and new orders.

There is no doubt about Xiaomi's existing orders. Lei Jun has been jokingly called the "King of Owed Cars in Beijing". Leapmotor's new orders are also remarkable, with the weekly new orders consistently exceeding 10,000. The Leapmotor B01, which was officially launched on July 24th, received over 10,000 locked orders within 72 hours of its release. Although it cannot be compared with Xiaomi, a phenomenon-level player, it is still very impressive.

Both the existing orders and new orders of Hongmeng Zhixing are quite good. The main force is AITO. AITO M8 has sufficient existing orders, and the orders for the M9 can meet the monthly delivery of over 10,000 units, while the monthly delivery of the M8 can exceed 20,000 units. There are also the upcoming pure-electric version of the M8, the all-new M7 (can it achieve a monthly delivery of 30,000 or 40,000 units?), and the JIEJIE S9T. The new orders for the ZUNJIE S800 are also good, with weekly orders exceeding 700. It is said that the production capacity is scheduled until November, and if you place an order later, you will have to pick up the car next year (and pay more purchase tax).

The stock prices of BAIC BluePark, Seres, and Jianghuai Automobile, which are associated with Hongmeng Zhixing, are all relatively strong. SAIC Group may be waiting for the arrival of the Shangjie H5. Both SAIC and the industry (excluding competitors) are expecting the Shangjie H5 to be a hit. The JIEJIE S9T of BAIC BluePark is also worth looking forward to. Its appearance is so cool!

BYD, the price-warrior, has taken a series of actions after Great Wall's Wei Jianjun's "Automotive Evergrande Theory" prompted the management to initiate actions such as "60-day payment" and "anti-involution". BYD has also made many adjustments, including supporting dealers (extra cash rewards and adjustments to car pickup policies), slowing down the construction of production lines, and postponing the start-up time of multiple production lines. In fact, it has made major adjustments from the production end to the sales end.

After BYD's A-share split into three, its stock price did not start a new upward trend. Instead, it declined, which should be largely related to the anti-involution measures. Let's see how BYD performs overseas. In the first half of the year, BYD became the best-selling new energy vehicle brand in 8 countries and regions. We look forward to better performance in the second half of the year.

Looking at the recent weekly sales, XPeng's sales have not shown a consistently exceeding-expectation performance, which is most likely related to the existing orders and new orders. In other words, the order numbers are lower than expected, not due to insufficient production capacity. As for NIO, everyone is looking forward to the L90, whose price will be announced on the evening of the 31st. Previously, the pre-sale of the L90 led to a rise of about 50%, so the current correction is very normal. Moreover, NIO's deliveries completely depend on the daily new orders because none of its many models has any reserve orders.

This article is from the WeChat official account "Che Zhi" (ID: invehc), written by Michael Yuan and published by 36Kr with authorization.