XPENG-W (09868) plunged 5.02% in intraday trading on Tuesday, leading the decline among Hong Kong-listed auto stocks as investors reacted to the company's disappointing July delivery figures and mounting quality control concerns.

The sell-off followed the release of July delivery data, which showed XPeng delivered 38,027 vehicles globally — a modest year-over-year increase of just 4% but a sequential decline of 5.23% from June. The sluggish growth significantly lagged behind the broader electric vehicle sector, intensifying worries about the company's competitive position. Year-to-date deliveries through July stood at approximately 204,000 units, down nearly 13% from the same period last year, further dampening investor sentiment.

Adding to the downward pressure, XPeng initiated a recall of 33,473 X9 vehicles due to front air spring airtightness defects caused by manufacturing process fluctuations, while the Ministry of Industry and Information Technology conducted on-site product safety inspections at the company's Zhaoqing facility. Citi also forecasted third-quarter total deliveries of approximately 130,000 units, well below market expectations of 150,000, citing slower-than-expected L03 production ramp-up and potential cannibalization of M03 sales. The broader auto sector also softened, with Li Auto-W falling 3.6% and other peers trading lower amid intensifying market competition and diverging sales performance among automakers.