Chinese EV makers’ shares skid as sales slide after tax incentive ends

SCMP | Feb. 2, 2026, 2 a.m. | Original

BYD EVs proceed through assembly at a plant in Zhengzhou, in central China’s Henan Province, on November 14, 2025. Photo: Xinhua

Major Chinese electric vehicle (EV) makers got off to a bumpy start in 2026 as they reported falling deliveries in January due to softening government support.
Shares of Hong Kong-listed BYD , Xpeng , Li Auto and Nio plummeted on Monday morning, battered by a bearish delivery outlook in the cutthroat mainland EV market.

“Lacklustre [sales] data in January represented a rude reminder that the industry will face a difficult year,” said Ivan Li, a researcher at Loyal Wealth Management in Shanghai. “Nearly all EV makers have become victims to a resumption of purchase tax, and manufacturers of low-priced cars will also suffer a big setback from an adjusted cash subsidy policy.”

BYD, the world’s largest EV builder, handed 210,051 vehicles to customers at home and abroad in January, down 50 per cent from a month earlier and the lowest since February 2024, when it sold 122,311 cars. Its Hong Kong-listed shares plunged 7.8 per cent to HK$90.10 on Monday morning.

Xpeng posted a 46.7 per cent month-on-month decline in sales in January, delivering a total of 20,011 units. Its Hong Kong shares dived 9 per cent to HK$65.20.

Li Auto added an eighth month to a losing streak, as January sales slid 37.5 per cent from December to 27,668 vehicles. Its shares lost 3.6 per cent to HK$65.55.

Mainland Chinese student jailed for 3 months for hiring imposter to take TOEFL test Zhang Youxia investigation to end ‘watered down’ capability of China’s military: PLA Daily