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

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.