Startups upbeat after record monthly sales

NEV makers capitalizing on massive potential after local consumers shun traditional brands

China's startups are getting a foothold in the new energy vehicle segment. At least four of them saw their sales hit 10,000 in November and they expect the trend to continue as the market heats up.

Nasdaq-listed Li Auto sold 13,485 vehicles last month, soaring 192 percent from the same month last year.

This is a monthly record for the six-year-old Beijing-based startup. The Li One SUV, their sole model so far, is the first vehicle of those from Chinese startups to reach the milestone of 10,000 deliveries in a month.

"We are excited to see Li One emerge as one of the best choices for large SUV users and families in China. This impressive result reflects widespread user endorsement of our outstanding product features and performance," said Shen Yanan, co-founder and president of Li Auto.

Statistics show that the model's total deliveries in the 11 months this year reached 76,404 units. It takes cumulative deliveries past 110,000 units since the first production vehicle rolled off the assembly in December 2019.

Li Auto expects its deliveries to exceed 10,000 units in December as well. It estimated sales in the fourth quarter are to reach between 30,000 and 32,000 vehicles. This would be more than double the figure from the same quarter of last year.

"In light of our strong order intake and users' rising acceptance of smart electric vehicles, we remain as enthusiastic as ever about our growth prospects," said Li Xiang, founder, chairman and CEO of Li Auto.

New energy vehicles have become a serious choice for Chinese car buyers, especially those living in big cities where gasoline vehicle license plates are harder to obtain and charging facilities are easy to find.

NEV deliveries soared 141.1 percent in October to 320,000 units, around 20 percent of the total vehicle sales that month, according to statistics from the China Passenger Car Association.

Zhang Yongwei, a chief expert at Chinese auto think tank EV 100, said the sector in China, the world's largest vehicle market, is growing faster than expected.

He expects electric cars and plug-in hybrids to account for 30 percent of new vehicle sales in China in 2025.

When it comes to NEV models, many Chinese car buyers tend to choose those from startups than established giants, arguing that they have a fancier design and more technical features.

That preference has pushed up sales as well of other leading startups, including Nio and Xpeng, both of which are listed on the New York Stock Exchange.

Nio, which positions itself among premium brands including BMW and Mercedes-Benz in the age of electrification, delivered 10,878 vehicles in November, up 105.6 percent year-on-year.

It is not the first month the Shanghai-based startup has sold more than 10,000 vehicles. Nio has delivered 80,940 vehicles in 2021. As of November 30, 2021, cumulative deliveries of its three models reached 156,581 vehicles.

In September, Nio started exploring the European market, with the first dealership now open in Oslo, Norway. Nio President Qin Lihong said the carmaker will make inroads into Sweden in 2022.

Xpeng, headquartered in Guangzhou, Guangdong province, sold the most vehicles among startups in November, at 15,613 units.

Like Nio, it has three models－two sedans and one SUV－in its lineup. A fourth, another SUV, is expected to hit the market in late 2022.

The G9 SUV is Xpeng's first model to be designed in line with international safety and environmental protection standards.

It is also the carmaker's first production model to incorporate a set of new technologies designed by its in-house staff, including the vehicle architecture, driver assistance system and powertrain and supercharging system.

Another startup, Nezha, which is backed by Chinese internet company 360, hit the milestone of selling 10,000 units a month in November.

Unlike Nio, Xpeng and Li Auto, Nezha's models are smaller and more affordable, targeted at the volume car market.

Investors are optimistic about such carmakers' prospects as the segment will account for a larger share in the electric vehicle market as is the case of the gasoline market.

Nezha raised 4 billion yuan ($627.5 million) in the latest round in late October. One-half came from 360, which is now its second-largest shareholder.

WM Motor, another company focused on the mainstream electric vehicle market, announced on Tuesday it had raised $152 million from property developer Agile Group.

The new funding brought WM Motor's total capital raised in the fourth quarter to $457 million. The company said other investors will join and bring the total fund to more than $500 million.

WM sold more than 5,000 vehicles in November. It expects deliveries this year to reach 40,000 units.