Market Insight | LI AUTO-W Surges Over 5%, Leading the Auto Stocks with the Expansion of Subsidies for Trade-Ins, Expected to Boost Auto Sales in the Second Half of the Year
Auto stocks performed strongly in the morning session, with Li Auto-W up 4.96%, Nio-SW up 3.12%, XPeng-W up 2.82%, and BYD Company Limited up 1.91%. The new subsidy policy issued by the Ministry of Commerce and others will increase the subsidy for new energy passenger vehicles to 20,000 yuan, and for the first time include replacement and renewal in the subsidy scope. Caixin Securities predicts that auto sales in the second half of the year will further increase due to increased subsidies and various policy support, with significant benefits for domestic brand car companies
According to the Vantage Finance app, automotive stocks rose in early trading. As of the time of publication, LI AUTO-W (02015) rose by 4.96% to HKD 80.4; Nio-SW (09866) rose by 3.12% to HKD 31.4; XPeng-W (09868) rose by 2.82% to HKD 27.35; and BYD Company (01211) rose by 1.91% to HKD 224.6.
On the news front, on August 16, the Ministry of Commerce and 7 other departments issued a notice on further improving the work of trading in old cars for new ones. The purchase subsidy for new energy passenger vehicles has been increased from RMB 10,000 to RMB 20,000, while the purchase subsidy for fuel passenger vehicles has been raised from RMB 7,000 to RMB 15,000. In addition, for the first time, the policy includes replacement updates in the subsidy scope. The state will allocate ultra-long-term special national bond funds directly to local governments to support local initiatives for replacement updates.
Caxin Securities pointed out that with the further enhancement of subsidies for trading in old cars for new ones, coupled with the launch of a new round of new energy vehicles going to rural areas, the reduction of new energy vehicle purchase tax, financial credit support for car purchases, and the supporting discounts continuously released by companies, car sales in the second half of the year are expected to receive further boost. Independent brand car companies with a relatively high proportion of sales of new energy products in the 50,000-200,000 price range will benefit the most