Key points:
- As the Chinese EV market continues to explode, competition is heating up
- Nio are recording lower growth levels than its' rivals Xpeng and Li Auto
- Bears tend to prey on slower growth, so investors might want to watch out
China has been the epicenter of EV focus lately, as investors look towards higher growth markets in the face of a one-step-behind U.S EV industry. With a large number of companies beginning the shift or still in a start-up growth phase; profitability is few and far in between. Companies are consistently pushing back delivery dates and cutting down targets due to various market headwinds, but Chinese companies offer a wildly different investment landscape.
Manufacturers like Xpeng, Li Auto, and Nio are still new companies, but they fit into a landscape that is much more geared towards EV usage, with China being the long-standing global hub of EVs. As usage continues to soar, so does competition. In the face of Tesla and traditional giant BYD; it’s a race for market share for Xpeng, Li Auto, and Nio – and it seems that Nio, which was once regarded as the ‘Tesla of China’ might be starting to fall behind the pack.
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January delivery numbers certainly alluded to that anyway. Whilst all companies are posting consistent levels of growth; Nio is lagging behind. Xpeng and Li both doubled January sales from last year, but Nio grew 34%. Similarly, in 2021, Li, Xpeng, and BYD all nearly tripled sales whilst Nio only doubled sales.
You can’t be too picky when it comes to EV companies, and although NIO is evidently growing; not at a rate that will wow investors. NIO stock is currently showing a daily gain of 1.5% but is down 56% year-on-year.
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