(Bloomberg) -- Electric-vehicle companies in China and battery suppliers in South Korea fell on Wednesday as weak demand weighs on sales outlook for the sector.

World’s top EV maker BYD Co. declined 1.6% in Hong Kong, while Nio Inc. slumped as much as 5.3%, as Citigroup Inc. said EV sales for the first week of this month missed estimates. LG Energy Solution Ltd. fell nearly 3% after Korea’s largest battery maker reported disappointing fourth quarter earnings. 

China’s EV market — the largest in the world by global sales — is projected to slow for a second straight year as the nation’s patchy economic recovery hurts consumer sentiment, making it harder for automakers to meet their sales targets.

“Investors remain cautious as China’s auto market has had a volatile start to the year as competition and macro uncertainties persist,” Morgan Stanley analysts including Tim Hsiao and Cindy Huang said in a note Wednesday.

Chinese EV sales for the first week of January missed consensus, down 20% on month, according to Citigroup analysts including Jeff Chung. Market demand volume could fall 50% or more in February from the current month, they said in a note. 

Read: China’s EV-Market Boom Is Set to Slow for a Second Year (1)

Weak demand is set to hurt Korean EV battery makers, which have already lowered production. Shares of LG Energy, which supplies battery to General Motors Co. and Tesla Inc. sank to the lowest since early November.

Samsung SDI Co. also a battery producer, declined 3.7% to its lowest level since October 2020. The company, which supplies to Volkswagen AG and Ford Motor Co., dropped on concerns its fourth-quarter results will fall short of expectations.

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