The combination of earnings season data and August sales figures has prompted a wave of bearish sentiment from international investment banks toward multiple new energy vehicle makers.

Leading automakers such as BYD Company Limited (01211.HK) and GEELY AUTO (0175.HK), along with first-tier EV startups including Li Auto (2015.HK) and XPeng (9868.HK), have seen their target prices consistently cut since the first quarter of this year. Meanwhile, second-tier players like Seres (09927.HK), Voyah (7489.HK), and Leapmotor (9863.HK) are witnessing sharp share price declines with no clear bottom in sight.

Major foreign institutions including Nomura, HSBC, and Deutsche Bank collectively argue that new model launches and promotional campaigns only generate temporary marketing momentum. As consumers adopt a wait-and-see approach amid an overwhelming array of choices, the timing and intensity of the anticipated "Golden September and Silver October" peak season remain highly uncertain.

Diverging Fortunes: Seres Halves While BYD and Geely Trail Industry Growth

Deutsche Bank notes that the downward pressure on Chinese automakers varies in intensity, with larger market players experiencing more pronounced demand declines.

Data shows that Byd Company Limited wholesale passenger vehicle sales reached 433,000 units in August, up 16.7% year-on-year. However, this growth was almost entirely driven by overseas markets, while its domestic performance remained lackluster. Overseas sales hit 189,500 units in August, while domestic sales totaled 243,900 units 鈥?a 16% year-on-year decline that widened from July's 11% drop.

Nomura emphasizes that despite Byd Company Limited's efforts to penetrate lower-tier markets with the Qin MAX and Seal 06 models in the RMB 100,000-150,000 price segment, terminal orders have shown no substantive improvement. The bank expects no upside surprises from Byd Company Limited's domestic operations in 2026.

Among top-tier automakers, GEELY AUTO is also facing bearish views from foreign banks. Nomura points out that GEELY AUTO's new energy vehicle sales reached 176,000 units in August, up 19.4% year-on-year. However, its main volume driver, the Galaxy series, delivered 119,000 units 鈥?a modest 7.6% year-on-year increase that significantly lags the industry average, indicating clearly insufficient growth momentum. While Zeekr delivered 37,000 units with roughly double year-on-year growth, its relatively small base limits its contribution to the company's overall performance.

Additionally, as the company continues to push deeper into mainstream price segments amid intensifying industry price wars, persistently high terminal discounts are eroding average selling prices and profit margins.

According to Deutsche Bank's latest weekly data (third week of August), Byd Company Limited's weekly new orders totaled 49,400 units, down 3% sequentially and a steep 38% year-on-year. GEELY AUTO (including Zeekr and Galaxy) recorded 19,300 weekly orders, down 8% sequentially and also 38% lower year-on-year. Together, these two giants account for nearly half of China's new energy vehicle market, and their foundational demand is now showing signs of weakening.

New Forces Lose Momentum Across the Board, Leapmotor Posts Steepest Weekly Decline

Deutsche Bank data reveals that Li Auto's weekly orders in the third week of August stood at just 6,300 units, down 3% sequentially and 37% year-on-year. NIO recorded 5,900 weekly orders, also down 3% sequentially and 31% year-on-year. Leapmotor saw weekly orders of 15,800 units, down 10% sequentially 鈥?the steepest weekly decline among major mainstream brands.

Only a handful of brands posted growth that week. XPeng recorded 8,200 weekly orders, up slightly by 2% year-on-year, while Xiaomi's 8,500 weekly orders represented 41% year-on-year growth. However, both remain below the 10,000-unit weekly threshold, offering negligible support to the overall market. Harmony Intelligent Mobility Alliance (HIMA) saw weekly orders surge to 11,600 units, up 86% sequentially and 38% year-on-year, though Deutsche Bank cautions that this growth relies heavily on the short-term pulse effect of new model launches and a low comparison base, raising sustainability concerns.

The data table also shows significant domestic sales declines for several automakers, including Seres, Harmony Intelligent Mobility Alliance (HIMA), and Xiaomi. HIMA delivered 42,100 units in August, down 5.6% year-on-year and 6.5% month-on-month. Seres saw sales nearly halve with a 49.7% year-on-year plunge, while Xiaomi delivered approximately 30,000 units in the month, down 17.6% year-on-year 鈥?further confirming the intensifying market competition and fragmentation of existing demand.

Peak Season Expectations Likely to Be Disappointed

Nomura stresses that the weak performance of leading automakers is not a short-term fluctuation, and expectations for the "Golden September and Silver October" peak season are likely to be disappointed. The bank forecasts that China's auto market in August will sustain double-digit year-on-year declines, with the contraction widening further from July.

First, industry competition has entered deeper waters. The ongoing price wars, feature battles, and channel conflicts, combined with a dense schedule of new model launches, are merely redistributing existing demand rather than creating incremental growth. Automakers' strategy of trading price for volume will further compress profit margins, creating a dilemma of "slight volume growth with significant profit pressure."

Second, overseas expansion provides only limited support. Despite Byd Company Limited's and GEELY AUTO's rapid growth abroad, uncertainties surrounding overseas market capacity, geopolitical risks, and local operational challenges mean that the performance of a few export models cannot offset the downward pressure from the domestic market's tens-of-millions-unit base.

According to consolidated foreign bank reports, the current 12-month forward price-to-sales ratio for new energy vehicle startups stands at only 0.4-0.7 times, while the Hong Kong-listed auto sector's price-to-book ratio is approximately 1.09 times 鈥?both at historical lows. However, with persistent profit pressure and no signs of demand bottoming out, low valuations do not necessarily signal a market bottom; they may instead represent a "value trap." Should peak season demand fall short of expectations, downward revisions to earnings forecasts could drive valuations even lower.