Nio Inc. (NIO) and XPeng Inc. (XPEV) are scheduled to report updates on July quarter deliveries on Monday. Expectations are running high following a stellar monthly report from domestic peer Li Auto Inc. (LI).

Li Auto Starts Q3 On a Upbeat Note

Li Auto reported Sunday its deliveries for July totaled 8,589 units of its Li ONEs, it sole EV model. The July performance represented a 11.4% month-over-month increase from the 7,713 vehicles delivered in June. On a year-over-year basis, the growth was at 251.3%.

Li Auto noted that deliveries crossed the 8,000-vehicle milestone for the first time ever. The company had delivered a total of 38,743 vehicles in the year-to-date period. "By the end of this year, we will launch a series of major OTA upgrades to elevate our product offering to new heights," said Yanan Shen, cofounder and president of Li Auto.

In late May, the company launched the latest version of its Li ONE, with improvements in the powertrain system, driving assistance system, intelligent cockpit, and user experience. Deliveries of the refreshed model began June 1.

Readthrough For Nio, XPeng? 

Nio and XPeng are coming off record months and quarters in June. In June, Nio delivered 8,083 vehicles, a 116.1% year-over-year increase and a 20.4% climb from May. XPeng sold 6,565 vehicles for the month, representing a massive 617% year-over-year jump and a 15.5% month-over-month increase.

Nio's second-quarter deliveries came in at a record 21,896 units, in line with the guidance range of 21,000-22,000. Meanwhile, XPeng reported record second-quarter deliveries of 17,398, which exceeded the guidance range of 15,500-16,000.

The global chip shortage had tempered expectations for the Chinese EV makers. Nio was forced to stall production for five working days at its Hefei manufacturing plant, starting March 29, due to chip crunch. Nio's founder Chairman and CEO William said on the first-quarter earnings call in late April that he expects the challenges to the overall supply chain production capacity will continue to linger in the second quarter.

Li Auto's numbers for July should augur well for Nio and XPeng, especially amid fears that the negative impact of semiconductor shortage may have seeped into the third quarter.

With Nio poised to begin deliveries of its imported ES8 model in Norway in September, things look bright for the EV maker for the remainder of the year, provided the chip crunch does not have a detrimental impact. The company looks all set to launch its first-ever sedan, named ET7 in the first quarter of 2022. Reports also suggest the company could launch a mass market sub-brand by the same timeframe.

The next catalyst for Nio will be its second-quarter earnings release, which is scheduled for Aug. 11. The company is widely expected to report a loss of 11 cents on revenues of $1.28 billion, up from a loss of 18 cents per share on revenues of $550.47 million a year ago. XPeng is seeing ongoing product momentum, with the launch of variant models of existing vehicles and the planned launch of new vehicle models.

Shares of the Chinese EV makers have been extremely volatile in recent sessions. Friday, Nio shares ended up 4.83% at $44.68, XPeng rallied 6.38% to $40.53, and Li Auto was up 8.90% at $33.39.