Chinese EV Stocks: Why LI, XPEV and NIO Stock Are on the Move Today

Shares of Chinese electric vehicle makers are charged up ahead this morning following separate announcements by the firms that vehicle deliveries will beat estimates for 2020. Shares of Nio (NYSE:NIO), Li Auto (NASDAQ:LI) and Xpeng (NYSE:XPEV) were up more than 6%.

Image of Nio (NIO) logo branded on the exterior of a corporate building.
Source: Sundry Photography /

What is behind the strong demand for the rivals of Tesla (NASDAQ:TSLA)? A fast-recovering Chinese economy for one thing, and an increasingly generous basket of incentives from Beijing policy makers seeking to stoke domestic adoption of EVs in the world’s biggest car market.

The Chinese EV companies’ shares come into 2021 riding a huge wave of momentum. NIO stock gained 128% in that period of time, while XPEV stock rose 113% and LI stock increased 67%. Shares of TSLA stock notched a 62% increase in 2020’s final quarter.

Delivery Update Fuels NIO Stock

In a delivery update over the weekend, Shanghai-based Nio said it delivered 7,007 vehicles in December 2020, increasing by 121% year-over-year. For the quarter, deliveries totaled 17,353 vehicles, up by 111% YOY. For the year, the EV maker said it delivered 43,728 vehicles in total, notching a 112.6% YOY increase.

The update was punctuated with the news that the company will unveil its first sedan at the upcoming Nio Day scheduled for Jan. 9, 2021. Importantly, investors are also looking forward to further announcements about its autonomous technology.

Meanwhile, Li Auto on New Year’s Day announced it delivered 6,126 of its Li ONE vehicles last month, representing an increase of 31.9% month-over-month and 529.6% YoY. The company’s deliveries for the fourth quarter reached 14,464, which was 67% higher than in Q3 and 20.5% above the top end of the company’s earlier guidance. Last month’s orders for news Li ONE models was at its highest level ever.

Rounding out the Chinese EV maker reports, Xpeng said it reached a record monthly delivery of 5,700 Smart EVs in December 2020, including a record high 3,691 P7s, XPEV’s sports smart sedan, and 2,009 G3s, its smart compact SUV. December deliveries represent a 326% increase YOY and a 35% increase from November.

Chinese EV Stocks Chasing Tesla

Then there’s Tesla, which said over the weekend that it delivered 180,570 vehicles (up 61% YOY) and produced 179,757 vehicles (up 71%) in the most recent December quarter. As Loup Ventures noted, these numbers were ahead of analyst consensus at 173,000 deliveries and in line with recently raised investor expectations. “The company fell 450 vehicles short of its 2020 delivery target of 500k.”

“Tesla delivery growth is accelerating,” Gene Munster and David Stokman wrote. “… The good news is Tesla has the formula consumers want. The bad news is to keep up with this demand, the company needs to quickly build new factories in Austin, Texas, and Brandenburg, Germany.”

What to do with this news? The gains in all of the above-mentioned stocks are just part of the inflection point of electric vehicles in an increasingly renewables-conscious world. Most of InvestorPlace’s contributors see dip-buying as the best points of entry for these shares, but also advise not to ignore related stocks, including drive-train maker China Automotive Systems (NASDAQ:CAAS).

On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article. 

InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.

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