Chinese EV Stocks Charge Up to Begin 2021

After blowing through initial guidance, shares in Nio, Li Auto, and XPeng hit high gear.
Anthony RussoJan 04,2021,18:00

Chinese electric vehicle makers were charging up to start the new year after posting deliveries that blew past their internal guidance figures.

Starting with Nio (NYSE: NIO), it was trading 10% higher intraday Monday after it delivered 7,007 vehicles in December, up 121% from the same month last year. In the fourth quarter, Nio delivered 17,353 vehicles, ahead of its range of 16,500 and 17,000 that it previously guided for.

Two other fellow Chinese EV makers Li Auto (Nasdaq: LI) and XPeng (NYSE: XPEV) watched their shares rise 14% and 9% by midday today after posting strong vehicle deliveries of their own.

In December XPeng delivered 5,700 vehicles, up 326% year-over-year. In total, Li Auto delivered 12,964 vehicles in the quarter ending December, nearly 3,000 above its guidance, according to comments from management in its third-quarter conference call.

Li Auto also wound up crushing its guidance. In the fourth quarter, it delivered a total of 14,464, well above the 11,000 to 12,000 range it previously expected. In December, Li’s deliveries surged by 530% to 6,126 vehicles.

With their stocks starting the new year in the green, all three EV players will look to rebound from a disappointing month of December, as President Donald Trump recently signed a bill into law that could delist Chinese firms from trading on American bourses if they don’t comply with auditing standards.

That said, 2020 was quite the year to own shares in electric vehicle stocks. According to MarketWatch, year-to-date returns on “pure-play” EV shares have ranged from fivefold to tenfold, as of Dec. 29, 2020.

However, the huge gains posted last year followed by the surge today could mean that the EV space is overvalued. For instance, XPeng currently trades roughly 15 times its projected full-year 2021 sales, according to Barron’s.

That said, analysts appear to disagree with that notion, as 60% rate shares of Li Auto, Nio, and XPeng as buys.

In other EV news, the world’s most valuable car company Tesla recently priced its Shanghai-made Model Y crossover at 339,000 Yuan ($52,000). That’s priced lower than the NIO EC6 and around the same price as the Li ONE.

Topics:Nio, Li Auto, XPeng, Tesla.