Investors frowned on non-state-run Chinese companies after a weekend of dramatic political developments in China, which led to a major selloff on Monday that included shares of Chinese electric vehicle manufacturers that are trading on the American market.
In late morning New York trade, shares of Li Auto fell 21%, Nio’s fell 20%, and Xpeng Motors fell 15%. Shares of the larger BYD fell roughly 9%. Other well-known Chinese businesses, such as Alibaba and Tencent Music Entertainment, also experienced sharp drops.
The selloff came after President Xi Jinping named a number of supporters to the Politburo standing committee, the leading Communist Party of China’s inner circle of power, appearing ready for an extraordinary third term in office.
China’s government has stiffened rules on technology companies and imposed more limits on speech and movement under Xi’s direction. According to analysts, there will be additional limitations in the future. Mark Schilsky of Bernstein stated in a note on Monday that Chinese stocks are currently “uninvestable.”
On Monday, Xpeng also unveiled XNGP, a new iteration of their sophisticated driver assistance system. The new system, which directly competes with Tesla’s Autopilot, permits a certain amount of hands-free driving both on highways and in some urban areas.