Chinese EV majors including Li Auto (NASDAQ:LI), NIO (NIO) and XPeng (XPEV) were trending lower in pre-market trading on Thursday as Tesla’s (TSLA) Q3 results missed estimates. This is the first time that Tesla missed estimates since the second quarter of 2019. More worryingly, Tesla’s CEO, Elon Musk also warned about production challenges regarding its electric pickup, Cybertruck.
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Tesla is facing stiff competition in China from local players and has continued to slash its prices over the past few months. This has also forced the local Chinese players like BYD (BYDDY) to lower their car prices. According to a CNBC report, citing data from Canalys, in the first six months of the year, BYD was the top EV manufacturer as the company’s EVs made up 21% of its global sales of EVs while Tesla was at second place with a 15% market share.
Overall, EV stocks were trending lower in pre-market trading on Thursday as Tesla’s results have raised fears that a macroeconomic slowdown globally could result in a drop in EV sales.
What are the Best EV Stocks to Buy?
Among the Chinese players, analysts remain bullish about Li Auto with a Strong Buy consensus rating while they are cautiously optimistic about XPeng and Nio with a Moderate Buy consensus rating. The average LI price target is $53.61, implying an upside potential of 63.7% at current levels.
