It’s been a turbulent week for electric vehicle (EV) producers across the U.S. Even with the many announcements that the week has brought, companies such as Lucid Group (NYSE:LCID), Lordstown Motors (NASDAQ:RIDE) and Hyzon Motors (NASDAQ:HYZN) have seen their shares fall as quickly as they have risen. Today isn’t going well for these companies, but across the world in another booming market, shares are revving up as Chinese EV stocks are enjoying a day of growth.
Chinese EV Stocks: What’s Going On
The beginning of a new month has brought September delivery result updates from the companies dominating China’s EV sector. For several prominent companies, the news was very good.
Both Nio (NYSE:NIO) and XPeng (NYSE:XPEV) reported record-setting months, while Li Auto (NASDAQ:LI) reported significant gains for both the year and fiscal earnings quarter. Shares for all three companies were quick to increase today. Nio is rising by 0.64% as of this writing and XPeng and Li by 0.47% and 0.87%, respectively.
The past week has also been generally good for these companies. They have all spent the past five days mostly in the green. It’s early in the trading day for American markets, but so far the outlook is positive for Chinese EV stocks.
What It Means
As hot as the EV and sustainable technology markets are right now, all production companies operating in either have had to deal with the unfortunate constraint of supply chain shortages this year. Li’s president noted that the chip shortage had posed a difficulty this year but also noted that demand had increased and that the company was taking “multiple measures” to stay ahead of the curve.
The statistics speak for themselves. According to the issued statements, Nio delivered “10,628 vehicles globally in September 2021, an all-time high monthly record representing a robust growth of 125.7% year-over-year.” Furthermore, XPeng enjoyed its “highest-ever monthly deliveries in September of 10,412 Smart EVs, representing a 199% increase year-over-year, and a 44% increase over last month.”
If these companies are able to meet this increasing demand in any capacity amid a global shortage of computer chips and other key components, it bodes well for the future of the industry, both in the short and long terms.
Why It Matters
If these patterns are any indication, we’re going to see more growth from this sector throughout the coming year, specifically from Chinese EV stocks. Companies such as Foxconn Technologies are already trying to tap into it by expanding into America’s market through partnerships with U.S. EV producers.
There’s been some skepticism from investment communities regarding the sustainability of the industry throughout the current supply chain crisis. However, the way it looks from here, these companies are weathering the storm pretty well. In some cases, they’re coming out even stronger.
Investors should definitely be watching Chinese EV stocks throughout the coming year.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
