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- Investors in China based EV manufacturers hope the companies would build upon their success in China and grab some of Tesla’s global market share.
- The leading Chinese EV brand Nio has proved incredibly popular with investors. Nio stock has increased 979% in the past year.
- Li Auto and Xpeng have also experienced moderate gains since listing on the US stock exchanges last year.
Tesla Inc’s (NASDAQ:TSLA) shares have shown immense growth, from trading at US$155 (on 26 February 2020) to close the day at a price of US$682.22 on 25 February 2021. The increase in price reflects investors extreme level of confidence in the EV manufacturer to continue its dominance of the EV market.
At the same time, Tesla’s competition has been quietly gaining market traction and investors attention.
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Investors have also been buying shares in China-based EV manufacturers, Nio Inc (NYSE:NIO), Li Auto Inc (NASDAQ: LI), and XPeng Inc (NYSE:XPEV), hoping the companies would replicate the success of Tesla.
Nio Inc (NYSE:NIO) is currently Tesla’s biggest competition out of the three Chinese brands. The EV manufacture is not yet selling in North America or Europe, yet it is the largest EV brand in China and the fastest growing one as well. The brand is expected to expand globally this year, beginning in Europe by late 2021.
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The Company has been popular with the US-based investors on the back of its impressive sales growth in China. Nio sales doubled in 2020 to 44,000 vehicles. Tesla share price grew 650% in 2020, whereas Nio shares experienced a 1,110% increase in the same period. The Company has a market cap of approximately US$73.62 billion, as on 25 February 2021.
The primary point of differentiation for Nio is its battery swapping technology. Nio has built hundreds of automated stations across China that swap out a vehicle’s drained batteries with fully charged batteries within minutes.
On 25 February, Nio shares last traded at US$46.81, decreasing by 9.74%.
Xpeng Inc (NYSE: XPEV) has managed to double its sales in 2020 to above 27,000 vehicles. Sales of the Company’s two models come mostly from China, along with a sprinkling of sales coming from Europe. Xpeng is ahead of its Chinese rivals in respect to chasing the markets outside its home territory.
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The share price of Xpeng has risen 66.8% since listing on the NYSE in August 2020. The increase is of course modest compared to Nio and Tesla in the same period. The Company has a market cap of approximately US$27.96 billion, as on 25 February 2021.
On 25 February, XPeng shares last traded at $35.40, decreasing by 8.53%.
Li Auto Inc (NASDAQ: Li) shares have grown moderately since its listing on the NASDAQ in July 2020.
Sales of the Company’s EVs are lower than XPeng and Nio, but consistently strong sales growth in China means the Company has remained attractive to investors.
The automaker has only one model, which makes the Company’s success all the more remarkable. Li-Auto sales for 2020 exceeded 32,500 vehicles, generating US$560 million in revenue. The young Company remains unprofitable but heavily invests in fast-charging and autonomous driving technologies to better compete with the industry leaders. Li Auto has a current valuation of US$23.22 billion, as on 25 February.
On 25 February, Li Auto shares last traded at $25.87, decreasing by 9.80%.