Why These Analysts Are Highly Bullish On Chinese EV Trio Of Nio, Xpeng, Li Auto For 2022

U.S.-listed Chinese electric vehicle makers Nio Inc NIO, Xpeng Inc XPEV, and Li Auto Inc’s LI high valuation mirrors the companies' growth last year, analysts at CITIC Securities said, cnEVpost reported on Sunday.

What Happened: The analysts, led by Xu Yingbo, have priced in the high growth of Nio, Xpeng and Li Auto over the past year and continues to remain bullish for 2022.

All the three electric automakers are expected to see a sales boost this year with the new “heavyweight product launches,” which could help exceed expectations, as per the analysts.

Nio’s upcoming mid-sized electric sedan, which would enter production later this year, could become the automaker’s best-selling product and help boost expansion overseas, Xu's team wrote. 

See Also: Nio Says ET5, Launched Saturday, Is Already Its Model With Highest Pre-Orders

The Shanghai, China-based Nio revealed the ET5 last month at the company’s annual day. The fifth production model has since reportedly become its most pre-ordered model.

Deliveries for the ET5, which would compete with Tesla Inc’s TSLA Model 3, are scheduled to begin in September. The ET5 comes at a starting price of $51,500 before government subsidies while the Model 3 is priced at $40,905 onwards, after subsidies.

Nio, Xpeng and Li Auto delivered 91,429, 98155 and 90,491 electric vehicles in 2021.

Why It Matters: Shares of the three electric vehicle companies have been under pressure recently amid China's growing scrutiny on tech companies including DiDi Global Inc's DIDI plans to delist from the New York Stock Exchange. 

Further, China’s plan to cut subsidies on new energy vehicles by 30% this year has added to the woes. 

See Also: Tesla Rival Nio's December Deliveries Slip 3.6% From November, But More Than Double From Previous Year

China had earlier said NEV subsidies are expected to decline each year by 10%, 20% and 30%, from 2020 to 2022.

Price Action: Nio shares closed 0.15% lower at $29.3 a share on Friday. The stock is down 12.5% so far in 2022.

Xpeng shares closed 3.8% lower at $45 a share and the stock is down 10.4% year-to-date.

Li Auto shares closed 2.8% higher on Friday. The stock is down 9.8% year-to-date.

Photo: Courtesy of Nio