What Happened With Chinese EV Stocks

With the property sector struggling and the Olympics due to start in Beijing on Feb. 4, China’s central bank cut key rates. The interest rate reductions show China moving in the opposite direction of the United States, where the Federal Reserve will likely hike rates four times this year. Investors should know though that the two economies are facing separate challenges. China wants to boost its economy ahead of huge international attention. The U.S. is working to combat inflation, a labor shortage and supply constraints.

Investors, especially ones holding tech stocks, clearly like the interest rate cuts. This has helped to send Chinese EV stocks higher too.

At the same time, electric vehicle companies have made several positive announcements that have improved investor sentiment. This includes $NIO Inc(NIO.US)$ hiring a key executive away from Swedish carmaker $Volvo AB Unsponsored ADR Class B(VLVLY.US)$ to lead its business development and expansion efforts in Germany and elsewhere in Europe. According to media reports, Ralph Kranz, director of commercial operations at Volvo Germany, is leaving the company at the end of February to join Nio, which entered Europe last fall.

Chinese EV stocks are also getting a lift from strong December delivery numbers. Nio, $XPeng(XPEV.US)$ and $Li Auto(LI.US)$ , combined, shipped more than 40,000 electric vehicles in December. That is a one-month record that shows the industry is maturing and gathering steam.