Weekly orders for electric vehicles in China weakened month-on-month due to the off-season and new car window period, with new car launches in late July marking an inflection point
Morgan Stanley released its weekly order tracking report for electric vehicles in China.
Morgan Stanley released its weekly order tracking report for electric vehicles in China. Affected by the summer off-season and the window period for new car releases, overall orders fell month-on-month. The drop in orders for most brands was a result of mean reversion after the early release of new cars, rather than a fundamental weakening of demand. Only some brands showed resilience, and the decline in orders for brands without near-term catalysts was more obvious. Core conclusion: The market should not regard this round of order decline as a collapse in demand, but as a seasonal adjustment. A number of new cars to be released in late July are expected to restart the product cycle in August and improve the current weak order growth situation. Current sector sentiment is suppressed by order data, but investment focus should be on the new car cycle and catalysts in late July. One sentence conclusion: The decline in electric vehicle orders in July is a combination of "off season + window period" and is not a signal of demand collapse; the new vehicle cycle in August is the variable that really needs attention. Positive/negative: In the short term, it will suppress sentiment in the electric vehicle sector, but in the medium and long term, it will benefit brands with strong new car cycles (such as Ideal, NIO, Xpeng, BYD). Price in situation: The month-on-month decline in orders has been initially digested by the market, but the recovery brought about by the August new car cycle has not yet been priced in. Catalysts: 1) New model release and reservation data from late July to August; 2) Whether weekly orders in August can rebound significantly month-on-month; 3) The effect of promotional policies such as "old for new" of various brands on order-boosting.