Shares of Chinese carmakers slumped despite sales recovering slightly in August, signaling persistent concerns about demand in the world's largest auto market.
BYD's shares were 3.7% lower in Hong Kong by midday Wednesday. Geely Automobile lost 4.2% and Zhejiang Leapmotor edged 0.4% lower.
China's top emerging electric-vehicle makers extended declines following losses on Wall Street overnight. NIO shed an additional 5.2%, Li Auto fell a further 4.7% and XPeng was down 3.4%.
The declines came even as most of the Chinese automakers recorded growth in monthly sales from a year earlier. Analysts said moderating demand in China's auto market remained at the forefront of investors' minds.
The August sales data were within market expectations, but there weren't many positive surprises either, according to CCB International analyst Qu Ke. Slowing demand and subdued market conditions are the two main factors weighing on the sector, he said.
The latest monthly figures also highlighted the divergence between headline sales growth and underlying market sentiment. Automakers have continued to rely on new model releases and promotions to attract consumers, while competition in China's overcrowded EV market remains fierce.
Nomura views this year as a transition year for China's auto industry, saying in a note that there are unlikely to be major changes to the industry's pattern in the remaining months of 2026.
Analysts have also said that investors are increasingly focusing on profitability as China's EV market matures. That could bode well for industry leaders including BYD, Geely and Chery, which boast solid sales in overseas markets.
NIO's stock was among the worst performers, after the company also reported quarterly results Tuesday.
NIO's soft third-quarter delivery guidance following a heavy product launch cycle was disappointing, Bernstein analysts said in a note. While initial demand for its new models was encouraging, momentum faded quickly amid intense competition and increasingly short product-life cycles, they wrote.