Benzinga
The future catalyst that can move Chinese EV stocks Nio, Xpeng, Li Auto
Chinese electric vehicle stocks have seen some moderation in momentum in recent sessions. A future catalyst could take inventories out of that lackluster phase: the January delivery numbers that expire next week. Finding the sweet spot in China’s EV market: China is a heated EV market, both from the point of view of supply and addressable market opportunity. “China is a new EV market opportunity for many well-positioned car manufacturers, as we believe that overall EV sales could potentially double in the region in the coming years, given the pent-up demand for EV vehicles from customers across all ranges. price, “Wedbush analyst Daniel Ives said in a note. Goldman Sachs analyst Fei Feng estimates that EV penetration, including electric batteries and plug-in hybrid vehicles, will increase from 5% in 2020 to 20% in 2025, 53% in 2035 and 80% in 2050. Xu Haidong , the deputy chief engineer at The Chinese Automobile Manufacturers Association said at a summit late last year that China’s EV sales could reach 1.8 million units in 2021 – a 40% increase over the previous year. previous year – thanks to steady economic growth, policies to continuously stimulate vehicle consumption and sales promotions by manufacturers. However, the supply side is full of home-grown startups, the pure international EV company Tesla Inc (NASDAQ: TSLA) and traditional auto makers, all competing for a piece of cake. Among players in China, highlights include Nio Inc – ADR (NYSE: NIO), Xpeng Inc – ADR (NYSE: XPEV), Li Auto Inc. (NASDAQ: LI) and WM Motors, supported by Baidu Inc (NASDAQ: BIDU ) and the technology conglomerate Tencent Holdings ADR (OTC: TCEHY). Deutsche Bank Securities analyst Edison Yu said the companies are collectively the “Fab Four” of China’s EV market. Nio On Record Streak: Nio, which has a premium position in China’s EV market, has reported record delivery numbers recently. After the COVID-19 pandemic affected sales in the first two months of 2020, the company achieved reliable performance through a series of innovative measures and technological improvements. The company ended 2020 on a high, having delivered a record 43,728 vehicles in the year. Since August 2020, Nio has produced record monthly numbers. In December, Nio delivered a record 7,007 vehicles, comprising 2,009 ES8s, 2,493 ES6s and 2,505 of the company’s recently launched EC6s. Deliveries are at a not-so-robust pace of 1,598 in January 2020. Since Nio announced that he would offset the reduction in government subsidies for vehicles purchased until January 10 and a limited period of zero cash payment options, the pace of sales will probably have accelerated even more. Nio’s battery as a service scheme has already started to show a positive impact on sales. Related link: Nio’s analyst sees significant advantages for the sales volume of the EV Xpeng brand makes the right noises: Xpeng, who listed his ADSs on the NYSE in late August, also joined the party. “XPeng is well positioned to gain market share in the mid-range and lower premium market, providing a technology-centric ‘smart’ experience by expanding the limits of its ADAS features and cabin user interface functionality, especially in speech recognition” , said Deutsche Bank’s Yu said in a note. Xpeng – which sells the G3, an EV SUV and the P7, a fully electric sedan – is due to launch a new sedan with technology deal this year. Earlier this week, the company released a major over-the-air update for its P7 sedan customers in China, delivering a new version of the XPeng operating system, Xmart OS 2.5.0. In December, Xpeng delivered a record number of 5,700 vehicles, an increase of 326% year on year and 35% month on month. In the year, the company delivered a total of 27,041 vehicles, an increase of 112% over the previous year. Li Auto’s robust performance: Li Auto also performed stellar in December, with deliveries of 6,126 Li ONEs in December and 14,464 units in 2020. Monthly performance represented increases of 31.9% month-on-month and 529.6% year-on-year year. Chinese EV stock performance: Nio’s shares reached record highs of $ 66.99 on January 11th, in reaction to the January 9th event on January 9th. Since then, stocks have declined. Xpeng, for its part, peaked at $ 74.49 on December 24 before backing down. After moving almost sideways since then, the stock has recovered in recent sessions. Li Auto is witnessing a lean patch after reaching a record high of $ 47.70, also on December 24th. Next week’s delivery numbers and impending fourth quarter results could be the key to determining which way the stock is headed. Photo courtesy of Nio. See more information about BenzingaClick here for options trading data from Benzinga’s Novavax Coronavirus vaccineBreaking Down: 2 Analyst gets data from Johnson & Johnson’s COVID-19 vaccine: What you need to know © 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.