Elon Musk’s trip to China: This week in EVs

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Tesla (NASDAQ:TSLA) CEO Elon Musk made a surprise trip to Beijing this week – his first in over three years – to meet with numerous government officials, receiving a warm welcome and lavish feasts.

Soon after arriving, Musk met with China’s foreign minister, Qin Gang, to discuss expansion of Tesla’s business in the country. Minister Qin emphasized the intertwined interests of the United States and China, likening them to inseparable conjoined twins.

Musk also held meetings with commerce and industry ministers, and enjoyed a 16-course meal with Zeng Yuqun, chairman of leading battery supplier CATL.

The details of these discussions remain undisclosed. Still, Chinese social media erupted with enthusiasm for Musk, with one user commenting “He’s a global idol,” and another saying, “Elon Musk is just great, if only China could have someone like Elon Musk.”

As Musk met with Chinese dignitaries, his company was looking to clear out some inventory. Tesla doubled down on discounts this week for some already-made new Model 3 electric cars, and it resumed discounts on some Model Ys in its U.S. inventory.

The electric automaker is gearing up to launch a revamped version of its Model 3 in the United States this year, and has started shipping some of its Model Ys with new hardware for its Autopilot partially automated driving system.

Chinese electric-vehicle startups have reported their delivery results for May, and Li Auto Inc (NASDAQ:LI) leads the pack: The company delivered 28,277 EVs, a remarkable 146% increase compared with last year. This marked the company’s third consecutive month with over 20,000 vehicle deliveries, and its second straight month with over 10,000 Li L7s. As of May’s end, Li Auto’s cumulative deliveries have reached 363,876 vehicles.

Xpeng (NYSE:XPEV) followed suit, reporting 7,506 deliveries for May – a 6% rise from April’s 7,079. This marked the fourth consecutive month of month-over-month sales growth after a series of declines. Xpeng also announced presales for the G6 Ultra Smart Coupe SUV will commence on June 9, with display vehicles available at stores.

Nio (NYSE:NIO) delivered a total of 6,155 vehicles in May, experiencing a 7.55% decline from April, which itself had decreased by 35.9% from March. The introduction of the new ES6 on May 24 had a limited impact on sales for the full month. However, the new model holds the potential to drive growth in June and the latter half of 2023 for NIO.

Shares of LI ended trading this week up 5.33% from its low on Monday. XPEV ended the week up 6.6% while NIO just about broke even at $7.56/sh after reaching a high of $7.92 on Friday.

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Elsewhere, Automotive Cells Company (ACC) – a collaboration between TotalEnergies (NYSE:TTE), Mercedes Benz (OTC:MBGAF), and Stellantis (NYSE:STLA) – celebrated the inauguration of its first EV battery plant in France.

This marked the beginning of a series of four upcoming factories to be established in the next three years. This strategically positioned northern corridor has been dubbed “Battery Valley,” emphasizing its significance as a hub for the rapidly growing industry.

Stellantis then switched focus on Thursday, announcing a 160 million euro ($176.13 million) investment at its Rennes plant. The investment aims to introduce a 100% electric compact SUV, codenamed CR3, in 2025.

According to a statement, the funds will be used to establish a battery assembly workshop and a dedicated plastic injection molding facility, adding the vehicle’s launch will happen on the future STLA Medium platform.

The CR3 model is planned to replace the existing C5 Aircross. When asked about the possibility of a non-electric variant of the new car, CEO Carlos Tavares responded, “Generally speaking, no.” Stellantis continues to prioritize electric mobility in its strategic plans.

Shares of STLA were on a roller coaster ride this week, sinking over 4% on Wednesday before recovering to gain fractionally for the week.