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China auto order momentum softens as the market waits for the next round of key model catalysts

Institution
Morgan Stanley
Date
2026-07-28
Authors
Tim Hsiao, Peggy Wang, Shelley Wang, Joey Xu, CFA
Company
-
Ticker
-
Industry
Auto Manufacturers
Rating
Asia Pacific Industry View In-Line
NeutralLow confidenceThe report shows that weekly orders for most automakers fell sequentially during July 20-26, indicating that the order boost from earlier new product launches is being digested and the month-on-month trend in July is weakening; however, XPeng MONA L03 and Li Auto L6 still delivered localized positive month-on-month growth, and the next round of catalysts will depend on key models from BYD, Geely, and Xiaomi.
AuthorsTim Hsiao, Peggy Wang, Shelley Wang, Joey Xu, CFA
CoverageAsia-Pacific
Asset classesEquity
Business segmentsChina Autos & Shared Mobility、Autos、Shared Mobility、New Energy Vehicle OEMs
Research firm divisions/subsidiariesMorgan Stanley Asia Limited（Other）、Morgan Stanley（Other）

AI summary card

China auto order momentum softens as the market waits for the next round of key model catalysts

Morgan Stanley believes that order digestion in China's autos and shared mobility sector is continuing after new vehicle launches, with weekly orders normalizing for most OEMs and dragging on July month-on-month performance; the next phase should focus on models such as BYD Great Han, Qin MAX, Geely Cruiser 700, and Xiaomi SkyNomad SUV.

Industry view: Asia Pacific Industry View In-Line; the report does not provide new target prices, and the above stock ratings are based on the coverage table and may change.
China autosshared mobilityweekly ordersnew vehicle cyclechannel feedbackIndustry View In-Line
  • Weekly orders for most automakers declined during July 20-26, indicating that the short-term boost from earlier launches is fading.
  • XPeng MONA L03 and Li Auto L6 were the main exceptions, driving month-on-month order growth for XPeng and Li Auto respectively.
  • BYD weekly orders were about 70.5-71k, down 8% sequentially, down 20% month-on-month, and down 7% year-on-year; it remains the industry's scale anchor, but short-term momentum is weak.
  • The next round of catalysts will mainly come from BYD Great Han, Qin MAX, Geely Cruiser 700, and Xiaomi's two SkyNomad SUVs.

Report interpretation

Overview

This report is Morgan Stanley's industry tracking update on China Autos & Shared Mobility. The core conclusion is that post-launch order digestion continued this week, with weekly orders for most OEMs returning to normal and the month-on-month trend in July remaining weak. XPeng and Li Auto, supported by recently launched models such as the MONA L03 and L6, are among the few companies still maintaining positive month-on-month growth.

Core views

The report is cautious on near-term industry momentum: order data show that most brands are under pressure both sequentially and month-on-month, suggesting that the pull-forward effect from the earlier launch window is fading. Structurally, companies with new-model catalysts are showing greater resilience, especially XPeng and Li Auto. Going forward, the investment focus should shift from the order peak of already launched models to whether the next batch of key models can re-accelerate orders, including BYD Great Han, Qin MAX, Geely Cruiser 700, and Xiaomi's two SkyNomad SUVs.

Analysis framework

The report primarily relies on channel feedback to track weekly order ranges for major Chinese automakers during July 20-26, and compares week-on-week, month-on-month, and year-on-year changes to assess the speed of post-launch order digestion, relative strength across brands, and the potential impact of the next round of model catalysts.

Methodology notes

  • Industry high-frequency trackingChannel order feedback

    Weekly orders, week-on-week, month-on-month, year-on-year

    Channel feedback is used to estimate order ranges for major automakers during July 20-26, and short-term demand momentum is measured through WoW, MoM, and YoY changes.

  • Sell-side rating systemMorgan Stanley relative rating system

    Overweight, Equal-weight, Not-Rated, Underweight; industry view In-Line

    Morgan Stanley's stock ratings reflect judgments on risk-adjusted total return over the next 12-18 months relative to the industry coverage universe; this report discloses an Asia Pacific industry view of In-Line.

Asset mapping & comparison

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

  • BYD Company Limited（1211.HK/002594.SZ）
    Industry scale leader and target for the next round of model catalysts
    Strengths
    Absolute order volume remains the highest; Great Han and Qin MAX are identified as key upcoming catalysts.
    Weaknesses
    This week's orders declined week-on-week, month-on-month, and year-on-year, indicating fading short-term launch benefits.
    Comparison
    Compared with XPeng and Li Auto, short-term month-on-month performance is weaker, but scale advantages are clear.
    Risks
    If new models fail to effectively restore order momentum, the market may cut near-term demand expectations.
  • Li Auto Inc.（2015.HK/LI.O）
    Beneficiary of the recent L6 launch
    Strengths
    Orders grew 3% month-on-month and 18% year-on-year, with the L6 launch supporting demand.
    Weaknesses
    Weekly orders fell 49%, and the L-series order mix declined week-on-week, indicating post-launch normalization.
    Comparison
    It still achieved positive growth while most automakers saw month-on-month declines, showing better resilience than the industry average.
    Risks
    If the post-launch order peak for new models fades too quickly, subsequent delivery expectations may be affected.
  • XPeng Inc.（9868.HK/XPEV.N）
    Beneficiary of the MONA L03 launch
    Strengths
    Orders rose 43% month-on-month, making it the most notable month-on-month improver in the report.
    Weaknesses
    Weekly orders fell 76%, indicating that post-launch orders after July 16 are normalizing rapidly.
    Comparison
    Short-term month-on-month performance is better than that of most peers, but weekly order volatility is also greater.
    Risks
    MONA L03 order sustainability may prove insufficient, or conversion rates may come in below expectations.
  • NIO Inc.（9866.HK/NIO.N）
    China NEV high-frequency order tracking name
    Strengths
    Year-on-year growth of 121% indicates significant improvement from a low base.
    Weaknesses
    Orders declined 15% month-on-month, and the short-term trend remains weak.
    Comparison
    Year-on-year performance is stronger than that of most automakers, but month-on-month performance lags Li Auto and XPeng.
    Risks
    If new products or channel support are insufficient, the order improvement may be hard to sustain.
  • Geely Automobile Holdings（0175.HK）/Geely Galaxy
    Domestic brand and target for the next round of model catalysts
    Strengths
    Cruiser 700 is identified as a key upcoming catalyst.
    Weaknesses
    This week's orders fell 15% week-on-week, 6% month-on-month, and 18% year-on-year.
    Comparison
    Short-term order trends are weaker than those of XPeng and Li Auto.
    Risks
    Launch timing and order delivery for new models may fall short of expectations.
  • Xiaomi（1810.HK）
    New entrant in smart EVs and target for new-product catalysts
    Strengths
    Two SkyNomad SUVs are potential future catalysts.
    Weaknesses
    This week's orders were 6-6.2k, down week-on-week, month-on-month, and year-on-year.
    Comparison
    Current order volume is lower than that of BYD, Geely Galaxy, Leapmotor, and NIO.
    Risks
    There is uncertainty around SUV order performance, production ramp-up, and competitive intensity.

Key data

  • BYD orders70.5-71k; -8% WoW, -20% MoM, -7% YoYChannel feedback for July 20-26, covering 1211.HK/002594.SZ.
  • Geely Galaxy orders16.9-17.4k; -15% WoW, -6% MoM, -18% YoYShort-term orders are under pressure both week-on-week and year-on-year.
  • Li Auto orders9.2-9.4k; -49% WoW, +3% MoM, +18% YoYThe L series accounts for 54% of orders; after the L6 launch, weekly orders declined, but month-on-month growth remained positive.
  • NIO orders11.5-12k; -3% WoW, -15% MoM, +121% YoYA slight week-on-week decline, weaker month-on-month trend, but strong year-on-year growth.
  • XPeng orders9.9-10.1k; -76% WoW, +43% MoM, +13% YoYOrders normalized after the July 16 MONA L03 launch, but month-on-month performance remained strong.
  • Tesla China orders9.5-10k; -14% WoW, -5% MoM, -32% YoYCovered by Andrew Percoco; both short-term year-on-year and sequential trends are weak.
  • HIMA orders8.6-8.8k; -7% WoW, -43% MoMOf which Aito accounted for 5.6-5.8k, -10% WoW, -41% MoM, -10% YoY.
  • Leapmotor orders15.6-16k; -3% WoW, -19% MoM, -18% YoYA slight week-on-week decline, with pressure on both month-on-month and year-on-year trends.
  • Zeekr orders4.7-4.9k; -8% WoW, -22% MoM, +96% YoYYear-on-year growth remains strong, but short-term sequential momentum is weakening.
  • Xiaomi orders6-6.2k; -8% WoW, -14% MoM, -41% YoYThe next catalysts are the launches of two SkyNomad SUVs.

Impact & implications

In the short term, the market narrative for China's auto sector may shift from the post-launch order surge of already released models to waiting for the next batch of new products. Broad-based week-on-week order declines may weigh on market expectations for July sales and delivery trends, but names with a clear new-product cycle and month-on-month improvement may still outperform on a relative basis. At the industry level, maintaining an In-Line view is more consistent with the neutral-to-cautious tone reflected in the report.

Risks

  • The week-on-week decline in orders for most OEMs may continue, leading to downward revisions in expectations for July sales or deliveries.
  • The post-launch order peak for new models may fade more quickly, creating uncertainty around follow-through demand.
  • Price competition, promotional intensity, and channel inventory pressure may affect profitability.
  • If the next batch of key models is delayed or orders fall short of expectations, sector catalysts may prove insufficient.
  • The report discloses that Morgan Stanley has investment banking, shareholding, market-making, or other relationships with multiple covered companies, and investors should pay attention to potential conflicts of interest.

What to watch

  • Order performance after the launch of BYD Great Han and Qin MAX.
  • Launch timing and channel feedback for Geely Cruiser 700.
  • Whether Xiaomi's two SkyNomad SUVs can re-accelerate orders.
  • The pace of order normalization and subsequent conversion after the launch of XPeng MONA L03.
  • Changes in the L-series order mix after the launch of Li Auto L6.
  • Whether final July deliveries confirm weakening channel orders.
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