3 Chinese EV Stocks That Could Be the Next BYD: May Edition


  • Wager on these top Chinese EV stocks to buy, likely to continue delivering the goods for its investors.
  • Li Auto (LI): Li Auto differentiates itself from its peers with an industry-leading gross margin of 22.2% and a robust cash reserve of $13.7 billion.
  • XPeng (XPEV): XPeng is showcasing resilience with a 33% YOY increase in EV deliveries and innovative AI integrations like the Tianji OS and XPlanner, enhancing its ADAS’s urban usage.
  • Xiaomi (XIACY): Xiaomi’s entry into EVs with the SU7 has captured market excitement, reflected by a bombastic showing in its pre-orders, demonstrating healthy consumer demand.
Chinese EV Stocks to Buy - 3 Chinese EV Stocks That Could Be the Next BYD: May Edition

Source: abolukbas / Shutterstock.com

Chinese EV stocks to buy have taken the market by storm, with BYD (OTCMKTS:BYDDF) leading the charge as a clear frontrunner. Not only have they dominated the domestic market, but they continue to spread their tentacles across the globe. Chinese EV exports shot up by 77% in 2023, reaching 1.2 million cars. Moreover, BYD knocked EV pioneer Tesla (NASDAQ:TSLA) off its perch to become the largest seller of battery EVs during the fourth-quarter (Q4) of 2023.

However, with the Biden Administration’s sweeping tariffs on Chinese goods, including EVs, there are concerns about the future performance of Chinese EV stocks. Industry experts believe that the North American market is the last on the priority list for Chinese EV companies as they look to stamp their authority on a global scale.

That said, here are three top Chinese EV stocks showing promising potential to follow in BYD’s footsteps. These stocks could be the next big players in the Chinese EV market.

Chinese EV Stocks to Buy: Li Auto (LI)

The steering wheel and dashboard inside Li Auto electric car. Interior of Li Auto EV. Li Auto Also known as Li Xiang, is a Chinese electric vehicle company
Source: Robert Way / Shutterstock.com

Li Auto (NASDAQ:LI) is one of the top Chinese EV manufacturers, setting itself apart from its competition by becoming the country’s first major EV startup to turn a profit. It ended last year, with an eye-catching $1.6 billion in net profit, while its peers are still in the red.  Additionally, when stacked against top EV manufacturers in the country, Li Auto’s profitability profile truly shines.

Profitability for companies like Li Auto is perhaps doubly important considering the fierce price war among EV players. Hence, its industry-beating gross margin of 22.2% should come in handy, as it navigates through the current testing economic climate.

Despite missing top-line expectations, the company still generated $3.6 billion, a 36.4% jump on year-over-year (YOY) basis. Moreover, it delivered 80,400 vehicles in the first quarter (Q1) of 2024, up a staggering 52.9% from last year. Also, it wrapped up the first quarter, boasting a powerful cash position of $13.7 billion.

Looking ahead, the launch of its flagship MEGA MPV could prove massive in the upcoming quarters. Moreover, its foray into Middle East and other international territories could potentially add new layers to its illustrious growth story.

XPeng (XPEV)

Silver door of Xpeng (XPEV) EV with company logo
Source: shutterstock.com/helloabc

XPeng (NYSE:XPEV) is another leading EV upstart that’s carved its niche in the Chinese EV space. However, broader market concerns have caused a substantial pullback in its price, with XPEV stock down more than 40% year-to-date (YTD).

Nevertheless, despite the headwinds, XPeng’s deliveries continue to impress. It delivered 9,393 EVs, marking a solid 33% jump YOY and a 4% sequential increase. These results are indicative of its resiliency in the face of a slowdown in the world’s largest EV market. Additionally, the healthy demand for its new 7-seater X9, launched earlier this year, is remarkable. Roughly 10,000 units of the X9 have been delivered, including 1,959 in April alone, pointing to a robust growth potential ahead.

Furthermore, XPeng is looking to add new AI features for its users, including the Tianji OS and the XPlanner, refining its smash hit, XNGP Advanced Driver Assistance System (ADAS). ADAS continues to gain strong traction among its user base, with an 82% urban usage rate in April. Hence, there’s plenty to like about XPEV stock, without even going into its thrilling ventures into flying car technology.

Xiaomi (XIACY)

coworkers holding on to letters to spell Xiaomi
Source: Xiaomi

Xiaomi (OTCMKTS:XIACY), one of the top brands in consumer electronics and software, recently made a cheeky entry into the EV market. Its first EV, the Xiaomi SU7, has become a crowd-pleaser. Mirroring the specs of BYD and popular German brands, the SU7 boasts impressive specs, turning heads with 664 horsepower, outperforming its competition.

Xiaomi’s SU7 has caused quite a stir following its debut, with XIACY stock jumping over 10%. Moreover, YTD’s stock is up a stellar 26%, while it gained more than 83% last year.  Within 24 hours of its release, its pre-orders topped 88,898, underscoring the market’s enthusiasm. Consequently, Xiaomi urged its suppliers to ramp up production effectively to meet the 10,000 cars monthly target, a sizable jump from 4,000 to 5,000 vehicles by April. Already, 5,000 units have rolled off the production line, signaling a stellar start for Xiaomi’s automotive ambitions.

On the date of publication, Muslim Farooque 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.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/3-chinese-ev-stocks-that-could-be-the-next-byd-may-edition/.

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