Hong Kong-listed automobile stocks extended recent losses in today's trading session. XPENG-W (09868) declined 6.69% to HK$62.75, while GAC GROUP (02238) dropped 4.66% to HK$3.48. LI AUTO-W (02015) fell 3.09% to HK$65.90, and GWMOTOR (02333) decreased 1.43% to HK$12.42.

Analysts noted that January's passenger vehicle retail demand remained weak primarily due to two factors: local subsidy programs had not yet been formally launched, and automakers had introduced few new models during the period. Recent developments suggest improvements on both fronts. Since mid-to-late January, local governments have gradually initiated vehicle replacement subsidy programs. Additionally, automakers are expected to launch new models following the Spring Festival and ahead of auto exhibitions, which could stabilize and potentially revive automotive demand. Investors are advised to monitor potential opportunities during this demand trough.

Regarding upstream cost pressures, analysis indicates manageable impacts. Memory price increases, driven by AI super-cycle demand, may persist throughout the year but are projected to increase smart vehicle costs by less than 1%. Battery costs are also rising due to lithium carbonate price hikes, with estimated average vehicle cost increases of approximately 3,000 yuan by 2026. However, this impact may be mitigated through price transmission buffers and manufacturers' ability to adjust battery capacity. Price fluctuations in copper and aluminum may add around 2,000 yuan per vehicle, though the duration of these cost pressures remains uncertain.