What's Going On With Chinese EV Stocks Nio And XPeng?

Nio, Inc. NIO and XPeng, Inc. XPEV shares are trading higher Tuesday amid strength in Chinese EV stocks that may be impacted by the U.S. Treasury Secretary Janet Yellen’s China trip and upcoming inflation data.

The Details:

Treasury Secretary Janet Yellen met with government officials in China to discuss trade policies and industrial practices. Yellen reported that initial talks were productive and both parties agreed to ongoing, intensive discussions on the matter. 

Consumer Price Index data for March will be released on Wednesday, and investors are looking for signs of cooling inflation that would allow the Federal Reserve to begin cutting interest rates. 

Chinese EV stocks got a boost last week following a report claiming Tesla, Inc. TSLA had scrapped its plans for a low-cost electric vehicle. However, Tesla CEO Elon Musk has denied the report. 

Related News: Treasury Secretary Janet Yellen Sees ‘Flood Of Chinese Exports Wiping Out’ US Green Energy Industry

NIO Stock Forecast in 2030:

Predicting the future in stock prices over long periods of time is challenging. Wall Street analysts use complex models that take into account interest rates, economic growth, competitive advantages, management teams and historical profitability, among a host of other factors.

If, as an investor, you want to assume most of the major factors remain stable, you can use trend analysis as a helpful tool. Using a longer term trend line or historical performance of the stock, you can aim to forecast a stock's annual rate of return.

For Nio, over the past 5 years, it's annualized stock performance is -2.7%, and if you assume that trend continues for another 5 years, you can expect a stock to trade at $4.03.

Using a trend line (see how to perform this function here), If you choose to use a trend line, connect your two points and look into the future to the point in time in which you're curious. Once you've identified that stock price, you may want to consider what type of conditions would need to exist for the stock to justify the share price – be it an outside influence or managerial decision making.

NIO, XPEV Price Action: According to Benzinga Pro, Nio shares are up 5.49% at $4.61 and XPeng shares are up 8.88% at $8.03 at the time of publication Tuesday.

Image: T. Schneider from Shutterstock