Overseas sales and new product launches supported Chinese automakers' June sales

Overview

This report comments on the June and 2Q26 sales performance of major automakers in China's autos and shared mobility sector. The core conclusion is that expanding overseas sales and new model launches were the main supports for June sales, with BYD posting notable overseas growth, Geely's overseas mix exceeding 40% for the first time, XPeng and Li Auto broadly meeting 2Q26 guidance, and NIO coming in slightly below its company target.

Core views

Overseas markets were the key source of June sales resilience, especially for BYD and Geely. The domestic market still faces disruptions from inventory digestion, model transitions, and order timing. Entering 2H26, the report focuses more on the sustained contribution after new launches, including XPeng GX and Mona L03, Li Auto L8 and refreshed L6, NIO ES9 and five-seat ES8, as well as refreshed and new model pipelines from BYD and Geely.

Analysis framework

The report uses June deliveries, year-over-year and month-over-month changes, 2Q26 sales, and first-half 2026 cumulative sales of major automakers as the basis, combining company sales guidance, new model launch timing, overseas sales mix, and domestic inventory changes to comparatively analyze short-term sales momentum and its sustainability.

Methodology notes

• Operating data trackingMonthly delivery year-over-year and month-over-month analysis

  Use June sales, 2Q26 sales, and cumulative sales in the first half of 2026 to measure automakers' short-term demand and execution.

  Year-over-year reflects growth momentum versus the same period last year, month-over-month reflects monthly improvement or weakening, and quarterly data is used to verify whether company guidance was achieved.

• Product cycle analysisNew model launch and facelift-driven framework

  Assess the sustainability of follow-on sales through model launches, facelifts, and supply ramp-up.

  The report focuses on the potential pull to 2H26 sales from GX, L9, ES9, Mona L03, refreshed L6, five-seat ES8, and new models from BYD and Geely.

• Sell-side rating frameworkMorgan Stanley relative rating system

  Overweight, Equal-weight, and Underweight represent expected total return relative to industry coverage.

  The report states the industry view is In-Line, and stock ratings are evaluated on relative returns over a 12- to 18-month horizon.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• BYD Company Limited

  Automaker primarily benefiting from overseas sales expansion

  Strengths

  June sales reached 403,000 units, up 5% both month-over-month and year-over-year; overseas sales rose 95% year-over-year, and first-half overseas sales already reached 53% of the full-year target.

  Weaknesses

  Domestic sales are still in a phase of narrowing declines and need continued improvement from new models.

  Comparison

  Compared with most peers, BYD's overseas contribution is more prominent, and its sales scale is also significantly larger than other covered automakers.

  Risks

  Sustainability of overseas growth, pace of domestic demand recovery, and weaker-than-expected ramp-up of new models.

• Geely Automobile Holdings

  Automaker driven by higher overseas mix and new model pipeline

  Strengths

  June sales reached 241,000 units, with overseas sales of about 102,000 units accounting for 43% of total sales, exceeding 40% for the first time.

  Weaknesses

  Domestic sales declined month-over-month due to inventory digestion, and Lynk deliveries fell 28% year-over-year.

  Comparison

  The increase in overseas mix is significant, but the pace of domestic recovery is weaker than overseas performance.

  Risks

  Extended inventory digestion cycle, weaker-than-expected Lynk recovery, and insufficient contribution from new domestic models.

• XPeng Inc.

  NEV maker benefiting from GX supply ramp and Mona L03 expectations

  Strengths

  June sales reached 40,126 units, up 25% month-over-month and 16% year-over-year, with 2Q26 sales in line with the midpoint of guidance.

  Weaknesses

  2Q26 sales were flat year-over-year, and continued growth still requires contributions from new models.

  Comparison

  Short-term sequential improvement was stronger than Li Auto and Xiaomi, while further upside depends on Mona L03.

  Risks

  Unsuccessful GX supply ramp and lower-than-expected Mona L03 orders and deliveries.

• Li Auto Inc.

  NEV maker relying on the L8 launch and refreshed L6 to restore sequential growth

  Strengths

  2Q26 sales reached 98,330 units, in line with guidance of 95,000 to 100,000 units.

  Weaknesses

  June sales were 30,895 units, down 7% month-over-month and 15% year-over-year, affected by slowing orders ahead of new product launches.

  Comparison

  Met quarterly targets, but single-month momentum was weaker than XPeng and NIO.

  Risks

  Continued slowdown in orders during the new product transition period and insufficient lift from the L8 and refreshed L6.

• NIO Inc.

  NEV maker whose brand deliveries were boosted by the ES9 launch but slightly missed quarterly guidance

  Strengths

  June sales reached 40,597 units, up 8% month-over-month and 63% year-over-year; NIO brand deliveries rose 9% month-over-month after the ES9 launch.

  Weaknesses

  2Q26 sales were 107,658 units, slightly below guidance of 110,000 to 115,000 units; ONVO still fell 2% month-over-month after the L80 launch.

  Comparison

  Year-over-year growth was fast, but execution came in weaker than its own quarterly target.

  Risks

  Insufficient ONVO ramp-up, lack of sustainability in ES9 sales, and weaker-than-expected launch impact from the five-seat ES8.

Key data

• BYD June sales403,472 units, +5% month-over-month, +5% year-over-year1H26 sales were about 1.809 million units; June overseas sales rose 95% year-over-year to 175,000 units, and 1H26 overseas sales reached 53% of the full-year target of 1.5 million units.
• Geely June sales240,799 units, +1% month-over-month, +2% year-over-yearOverseas sales were about 102,000 units, accounting for 43% of total deliveries; domestic sales declined month-over-month due to inventory digestion.
• XPeng June sales40,126 units, +25% month-over-month, +16% year-over-year2Q26 sales were 103,295 units, flat year-over-year and in line with the midpoint of 2Q26 guidance; the GX supply ramp is expected to support July sales.
• Li Auto June sales30,895 units, -7% month-over-month, -15% year-over-year2Q26 sales were 98,330 units, -11% year-over-year, in line with guidance of 95,000 to 100,000 units; the L8 launch and refreshed L6 are expected to support sequential improvement in 2H26.
• NIO June sales40,597 units, +8% month-over-month, +63% year-over-year2Q26 sales were 107,658 units, +49% year-over-year, slightly below guidance of 110,000 to 115,000 units; ONVO declined 2% month-over-month, while the NIO brand grew 9% month-over-month driven by the ES9 launch.
• Leap Motor June sales93,376 units, +14% month-over-month, +95% year-over-yearThe table shows 2Q26 sales of 246,332 units, +84% year-over-year, and first-half sales of 356,487 units, +61% year-over-year.
• Xiaomi June sales30,000 units, -8% month-over-month, +18% year-over-yearThe table shows 2Q26 sales of 99,461 units, +21% year-over-year, and first-half sales of 180,317 units, +14% year-over-year.
• HIMA June sales50,624 units, +10% month-over-month, -4% year-over-yearThe table shows 2Q26 sales of 129,505 units, and first-half sales of 242,214 units, +19% year-over-year.

Impact & implications

For investment judgment, overseas expansion capability and the degree of new model delivery are becoming the key variables distinguishing automakers' short-term performance. BYD and Geely benefited from a higher overseas sales mix, XPeng and Li Auto delivered sales broadly in line with expectations, and although NIO posted rapid year-over-year growth, it did not fully meet quarterly guidance, so follow-up verification is needed on whether new models can continue improving deliveries.

Risks

• It remains to be seen whether high overseas sales growth can continue, especially the overseas penetration pace of BYD and Geely.
• The domestic market faces pressure from inventory digestion and model transitions, which may weigh on sequential recovery.
• There is uncertainty around order intake and delivery ramp-up after new model launches.
• NIO's 2Q26 sales were slightly below guidance, indicating ongoing volatility in execution and product mix.
• The report discloses potential conflicts of interest in that Morgan Stanley has investment banking relationships, shareholdings, or market-making activities with multiple covered companies, so investors should apply independent judgment.

What to watch

• The sales sustainability of the 9-series models GX, L9, and ES9 after launch.
• Order intake and delivery performance of XPeng Mona L03, Li Auto refreshed L6, and NIO five-seat ES8.
• The contribution of BYD Great Tang, Great Han, and Seal 08 to narrowing the decline in domestic sales.
• Whether subsequent facelifts and new models from Geely and Lynk can drive a recovery in domestic monthly sales.
• Whether major automakers can achieve sequential improvement in 2H26 sales supported by overseas growth and new product cycles.