China EV stocks fall after Tesla Q3 earnings underwhelm

Investing.com-- Chinese electric vehicle stocks fell on Thursday, tracking aftermarket declines in rival Tesla after the U.S. automaker clocked disappointing third-quarter earnings and flagged much higher costs in the coming year. 

Tesla Inc (NASDAQ:TSLA) rival BYD Co(HK:1211) fell 0.9% in Hong Kong trade, while NIO Inc (HK:9866), Li Auto Inc (HK:2015), Zhejiang Leapmotor Technology Co Ltd (HK:9863) and Xpeng Inc (HK:9868) fell between 0.9% and 2.5%. 

Local stocks tracked a near 4% aftermarket decline in Tesla, after the company’s Q3 profit missed expectations despite it logging record-high revenue. 

Tesla’s bumper revenue– which came on the back of record vehicle deliveries– was largely offset by increased spending on trade tariffs and artificial intelligence development. 

Tesla also flagged much higher capital expenditures in 2026, as it attempts to pivot away from its lagging EV business and further into AI and robotics. 

While Tesla’s vehicle deliveries surged in Q3, this was largely due to the quarter coinciding with the end of U.S. EV tax credits, which pulled a large number of sales into Q3 as consumers rushed to take advantage of the incentive.

The company is grappling with slowing sales outside the U.S., especially in Europe and Asia, where it faces stiff competition from Chinese EV makers.

But increased competition and sluggish sales could elicit more price cuts and cheaper models from Tesla– a development that could bode poorly for Chinese EV companies. The company had earlier in October released cheaper versions of its Model Y and Model 3 vehicles. 

China’s EV market is still embroiled in a bitter price war, as several EV makers, and new entrants such as Xiaomi Corp (HK:1810), rush to capture a bigger share of the world’s biggest EV market. 

Tesla also aggressively cut its prices in the country– a move that battered the EV maker’s margins in recent years.