Tesla's rising challengers from China: NIO, XPEV, LI
Chinese EV makers back on track for growth
Shares of Chinese electric-vehicle startups have rebounded from losses in May as of Wednesday, June 8. $NIO Inc (NIO.US)$, among other names, has retaken about 75% from the recent bottom of $11.67 on May 12, 2022.
China's electric-vehicle startups reported stronger delivery figures in May and expect continued growth in June as supply chains and output begin to recover from a Covid-19 induced slump.
$NIO Inc (NIO.US)$ , $XPeng (XPEV.US)$ and $Li Auto (LI.US)$ delivered 7024, 10125, and 11496 EVs, respectively, in May. Their year-on-year growth rates during the month were 4.7%, 78%, and 166%, respectively and Li Auto saw the largest increase.
What drives their recovery
Chinese government has announced a series of measures to support auto sales, including halving the tax on purchases of new cars below $45,000. The policy, which takes effect from June 1 until the end of the year, looks likely to benefit the entire auto industry, including EV makers.
Moreover, from the perspective of technical analysis, three Chinese EV stocks all fell to the lower band of the Bollinger bands in mid-May, showing a sign of rebound.
Li Auto stock price with Bollinger Bands shown as below:
China is undergoing a booming electric vehicle wave, with the market share of the electric car has risen from 4.47% in 2018 to 13.4% in 2021.
In 2021, China's electric vehicle sales exceeded 3.3 million units, a year-on-year increase of 154%.
It's no exaggeration to say that Tesla spurred every car manufacturer in the world to up their game. Nowadays, Chinese automakers are posing a serious challenge to traditional Western brands; among them, NIO, XPeng and Li Auto are the three startups that attract the most attention from customers and investors.
“They have three key competitive advantages, significant production expertise, strong software integration skills such as Advanced Driver Assistance System, and strong backing,” said Oliver Cox, Hong Kong-based money manager at JP Morgan Asset Management, pointing that Nio and Xpeng are best placed to rival industry leader Tesla for global market share.
Know more about Chinese Teslas
Apart from tracking deliveries, we could compare the three companies from their market cap, gross margin, revenue and PB ratio...
Taking gross margin as an example, it shows the percentage of net sales a company retains after it pays all direct costs associated with producing goods. The higher the gross margin, the more capital a company retains.
Nio:
Nio's product line mainly focuses on high-end SUVs, and the launch of ET 7/5 helped Nio enter the sedan field. The ET 7 competes directly with the BMW 5 Series and A6. According to a Nio meeting, the number of ET 7 orders currently in hand exceeds 150,000 units rumored by the media.
Brand awareness building has always been an important strategy for Nio. Nio has made a lot of efforts in enhancing consumers' sense of belonging, building user communities, and increasing user stickiness.
XPeng:
XPeng has a fully self-developed model for deploying an intelligent driving stack. Due to ongoing optimization, the technology of its intelligent driving system Xpilot has been greatly improved.
XPeng has expanded its product line-up with differentiated SUVs and sedans, which could further diversify its consumer bases. For example, its affordable SUV G3 and high-priced sedan P7 both saw rapid growth in sales after launch.
Li Auto:
Li is simple in its products. The company only launched Li ONE with a unified national retail price of RMB 349,800.
Unified standardization is conducive to production and follow-up maintenance services, resulting in economies of scale.
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The electric vehicle industry is still a nascent industry.
If you don't want to miss out on opportunities in this thriving industry, but find it difficult to identify startups with sustainable growth, an easy way to increase your exposure to these stocks is to consider industry ETFs.
If you don't want to miss out on opportunities in this thriving industry, but find it difficult to identify startups with sustainable growth, an easy way to increase your exposure to these stocks is to consider industry ETFs.
For more investment knowledge and trends, welcome to Learn on moomoo.
Disclaimer: Investing involves risk and the potential to lose principal. Past performance does not guarantee future results. This is for information and illustrative purposes only. It should not be relied on as advice or recommendation.
Disclaimer: Investing involves risk and the potential to lose principal. Past performance does not guarantee future results. This is for information and illustrative purposes only. It should not be relied on as advice or recommendation.
$S&P 500 Index (.SPX.US)$ $Nasdaq Composite Index (.IXIC.US)$ $Global X Autonomous & Electric Vehicles ETF (DRIV.US)$ $Kraneshares Tr Electric Vehicles And Futr Mblty Idx Etf (KARS.US)$ $Spdr S&P Kensho Smart Mobility Etf (HAIL.US)$ $Ishares Self-Driving Ev And Tech Etf (IDRV.US)$ $Global X Lithium & Battery Tech ETF (LIT.US)$ $SIMPLIFY VOLT ROBOCAR DISRUPTION AND TECH ETF (VCAR.US)$
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Sam The Greater : We gotta make sure they don’t steal our ideas.. China would be nothing without the thieves and copy cats..