China Electric Vehicle Stocks Are Soaring; Do You Have These EV Stocks On Your Watchlist?
Electric vehicle stocks have been the darling of Wall Street this year. Tesla’s (TSLA Stock Report) valuation received a massive jolt before its stock splits earlier this year. No doubt, this has led some investors to pile into this rapidly growing market. The recent weaknesses in TSLA stock are not without reasons. You see, you could argue that the pressure from analyst coverage and a mixed reception for the Battery Day is scaring some investors away. But the increasingly competitive space in the EV market is also giving investors more horses to stake their bets on.
Xpeng Motors Is Latest Tesla China Rival After Nio
For investors who want to bet on the migration to clean energy of transportation, chasing sky-high EV stocks need not be the game. For instance, Xpeng (XPEV Stock Report) is one of the top EV stocks to buy this week. This came after the company said there was a 266% increase year-on-year in the third quarter as it delivered 8,578 units. The company saw deliveries of 3,478 vehicles for the month of September, a leap of 145% from the same period last year. As a result, XPEV stock jumped by 10.17%. The increase was also partially due to the positive commentary from a Hong Kong-based analyst at Credit Suisse.
“The data shows that most of the customers who buy P7 care more about driving range and cost to performance, while the majority of Model 3 car buyers care more about brand/technology,” they wrote. “We believe the direct impact to Xpeng is manageable and we don’t rule out the possibility that Xpeng lowers the price of P7 if orders are impacted post Tesla’s price adjustment,”- Analysts from Bank Of America
As the world pushes toward renewable energy, bullish momentum has formed around the electric vehicle space. There are so many reasons to believe that EV stocks could be making huge moves amid the EV revolution. Analysts believe that major gains could be in store for top EV stocks. But investors are also reminded that not all EV stocks are created equal. After all, some have a significantly higher potential to succeed than the others. That said, let’s take a closer look at these three China EV stocks that could potentially be an electrifying addition to your portfolio.
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Top EV Stocks To Buy [Or Avoid] Right Now: Nio Inc.
Like Xpeng, Nio (NIO Stock Report) recently posted another monthly record with September’s deliveries. Last month’s deliveries hit 4,708 vehicles, up 133.2% YoY, as Q3 deliveries rose to 12,206 vehicles, up 154.2% YoY. These figures exceeded the corporate’s high estimate for the quarter of 11,500, and another monthly record, after August delivered similar triple-digit growth. Some experts believe that there’s more room for growth in the increasingly competitive EV industry. Nevertheless, Nio has established a name for itself and many are calling it the “Tesla of China”. Its share price has performed just as well. Its rally of over 400% happens to be around the same magnitude as the gain in TSLA stock. This has reminded investors of Tesla just a few years ago. And many are thus banking for Nio to achieve strong growth in the coming years if not decades.
If you have been paying attention to Nio, you would know that the company has reported strong growth and a positive operating margin for the first time this year. These make NIO stock one of the top electric vehicle stocks to watch in the long run. While some companies appear to be outright copying Tesla, NIO has its own definition when it comes to EVs. With investors scaling back their optimism after Tesla’s Battery Day, would Nio’s alternative batteries service be more attractive to investors?
Nio’s BaaS (Battery as a Service) allows users to swap batteries in minutes. This saves time in comparison with charging batteries. In fact, it may be well-suited to high-density cities in China. Now, with such a positive projection of Nio’s growth, in the long run, should investors buy the dip as the company progresses?
Top EV Stocks To Buy [Or Avoid] Right Now: Li Auto Inc.
Li Auto (LI Stock Report), an innovator in China’s energy vehicle market has also been on the move recently. This could simply due to the strong deliveries in the third quarter of 2020, recording a 31.1% growth quarter-over-quarter increase. The company had delivered a total of 18,160 year-to-date.
On the technology front, the company is teaming up with Nvidia (NVDA Stock Report) to provide its next-generation SUV with a chipset and software platform that can be used for self-driving functions.
Despite having a roller coaster ride with its share prices, the fundamentals remain strong. With a strong focus on “premium” electric vehicles, the company is hitting the sweet spot in the world’s largest electric vehicle market. Analysts who looked closely at Li Auto appear to like it. Goldman Sachs and Bernstein initiated coverage of the company with bullish ratings last week. Investors are also starting to pay close attention to this new EV player in the stock market.
Top EV Stocks To Buy [Or Avoid] Right Now: Kandi Technologies
Another EV stock making a splash in the electric vehicle market is Kandi Technologies (KNDI Stock Report). Many experts suggest that it could be one top EV stock to watch considering the rather volatile movement in its stock price. If you are looking for a speculative quick flip, by all means, have a shot at this one. However, if it’s for long term value-investing, I would take a deep breath before making any investment decision with this one.
For those who are not familiar with this company, Kandi is a Chinese electric vehicle and battery manufacturer. Now that Nio has had a strong rally this year, everyone wants to find the next Nio. And investors looking for a company with a similar growth to Nio, which in August posted a 104% year-over-year in its SUV sales.
Despite all that being, not everyone will like KNDI stock. The company’s product may be too niche for some. If you search for images of the company’s products, you will know what I am talking about. In the last 6 months, KNDI stock has gone up more than 170%. This proves that investors have shown interest in Kandi. If you believe there is going to be strong demand for electric superminis, Kandi would be the perfect beneficiary of the trend. After all, not everyone wants to fork out a fortune for an EV, right? With that in mind, would you consider investing in KNDI stock?
