What's Driving Chinese EV Titans Nio, XPeng, Li Auto Higher Premarket Today?

Chinese electric vehicle startups Nio, Inc. NIO, XPeng, Inc. XPEV and Li Auto, Inc. LI are seen extending their new-found momentum on Friday.

The stocks of these companies recently found support from the domestic government’s reiteration of support to jumpstart the economy. Although the announcement did not shed much light on the specifics regarding stimulatory support, domestic companies rallied in hopes of benefiting from a potentially strong economic recovery.

Thursday, the Chinese EV companies received a boost from Volkswagen AG VWAGY picking up a stake in XPeng and announcing plans to produce two models in partnership with the Chinese company targeting the middle-class segment.

Volkswagen also said its Audi will collaborate further with Chinese automaker SAIC. Following these, reports suggested that Nio could strike a deal with Mercedes-Benz Group AG MBGAF.

Thursday, Morgan Stanley analyst Tim Hsiao raised the price targets for the Chinese EV trio, citing anticipated improvement in fundamentals in the second half, CnEVPost reported.

“The lackluster 1H23 is now behind us, and we are starting to see an inflection point of meaningful operational improvement and potential re-rating opportunities, backed by volume upturn, policy tailwinds, autonomous driving and technology monetization,” the analyst reportedly said.

The analyst raised his price target for Nio from $12 to $18.70, for XPeng from $12.50 to $25.40, and for Li Auto from $40 to $53.

According to Benzinga Pro data, in premarket trading:

• Nio rallied 4.53% to $13.84.
• XPeng jumped 6.48% to $21.53.
• Li Auto climbed 5% to $40.94.

See Also: Best Chinese Stocks

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