Benzinga
The upcoming catalyst that can move Chinese EV shares Nio, Xpeng, Li Auto
Chinese shares in electric vehicles have shaken off somewhat in recent sessions. One upcoming catalyst could pull the stock out of this sluggish phase: the delivery numbers in January available next week. Find the sweet spot in China’s EV market: China is a hot EV market, both from the perspective of the responsible market opportunity and supply. “China is a greenfield EV market opportunity for very well-positioned car players, as we believe total EV sales in the region could double in the next few years, given the pent-up demand for EV vehicles from customers at all price points , “said Wedbush analyst. Daniel Ives said in a note. Goldman Sachs analyst Fei Feng estimates that the penetration of EV, including battery electric and plugged 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 of China Association of Automobile Manufacturers, said at a summit late last year that China’s EV sales could reach 1.8 million units in 2021 – 40% higher than a year earlier – thanks to stable economic growth , ongoing incentive policies for vehicle consumption and sales promotions by manufacturers. However, the supply side is jam-packed with homemade startups, international pure-play EV company Tesla Inc (NASDAQ: TSLA) and traditional carmakers all fighting for a piece of cake. Among the players in China, the standouts include Nio Inc – ADR (NYSE: NIO), Xpeng Inc – ADR (NYSE: XPEV), Li Auto Inc. (NASDAQ: LI) and WM Motors, backed by both Baidu Inc. (NASDAQ: BIDU) and the technology conglomerate Tencent Holdings ADR (OTC: TCEHY). Edison Yu, analyst at Deutsche Bank Securities, said the companies together are the “Fab Four” of the China EV market. Nio On Record Streak: Nio, which has an excellent position in the China EV market, reports the record numbers of late. After the COVID-19 pandemic affected sales in the first two months of 2020, the company credibly acquitted itself through a series of innovative measures and technological improvements. The company ended 2020 at a peak, with a record 43,728 vehicles for the year. It has shown monthly records since August 2020. In December, Nio produced a record 7,007 vehicles, consisting of 2,009 ES8s, 2,493 ES6s and 2,505 of the newly launched EC6s. Deliveries take place in January 2020 at a not-so-strong rate of 1,598. As Nio has announced that it will compensate for the reduction in government subsidies for vehicles purchased until January 10, and a limited period without a down payment option, the pace of sales is likely to have accelerated further. Nio’s battery-as-a-service scheme has already begun to show a positive impact on sales. Related Link: Nine Analyst sees significant setbacks for EV Brand’s sales volume Xpeng makes the right noises: Xpeng, which listed its ADSs on the NYSE at the end of August, has also joined the party. XPeng is well positioned to take market share in the midrange and lower premium market, providing a technically-centric ‘smart’ experience by shifting the limits of its ADAS features and the cabin’s user interface feature, especially in voice recognition Yu said in a note that Xpeng – which sells the G3, an EV SUV and the P7, an all-electric sedan – is expected to launch a new sedan with lidar technology this year. the company launched a major upgrade for the P7 sedan customers in China with a new version of XPeng’s operating system, Xmart OS 2.5.0, in December Xpeng delivered a record 5,700 vehicles, an increase of 326 % on an annual basis and an increase of 35% from year to year.For the year, the company produced a total of 27 041 vehicles, an increase of 112% on an annual basis.Li Auto’s robust performance: Li Auto also delivered a beautiful December performance, delivering 6,126 Li ONEs in Dese mber and 14,464 units for 2020. The monthly performance represents increases of 31.9% month-over-month and 529.6% year-on-year. Chinese EV share performance: Nine shares rose to a record high of $ 66.99 on January 11, in response to the January 9 Nio Day event. Since then, the stock has retreated. Xpeng reached a high of $ 74.49 on December 24 before retiring. After the stock then moved approximately sideways, the stock has returned in recent sessions. Li Auto sees a slim spot after hitting a $ 47.70 high, also on December 24th. The delivery figures for the coming week and the looming results in the fourth quarter could be the key to determining in which direction the shares are heading. Photo courtesy of Nio. Read more about Benzinga Click here for options related to Benzinga Break down Novavax’s Coronavirus vaccine data: 2 analysts take Johnson’s & Johnson’s COVID-19 vaccine data: what you need to know © 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.