So far, Wednesday is proving to be a great day for the Chinese electric vehicle market. Already, XPeng (NYSE:XPEV), Nio (NYSE:NIO), and Li Auto (NASDAQ:LI) are up in grand style, though some more so than others. As for why there was such a surge in the Chinese electric vehicle market, there are two main reasons. One of the reasons is raw numbers.
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Nio managed to break a record for vehicles delivered in the fourth quarter of 2022. It turned in a hefty total of 40,052. That’s a year-to-year increase of 60%, reports note, which is admirable for any company. Li Auto managed to deliver more vehicles still, coming in at 46,319. That’s a 31.5% increase over the same time last year. XPeng, however, was down on its deliveries, posting only 22,204 vehicles delivered against last year’s 41,751. XPeng did manage to roll out a lot more in December than it did in November, though. It nearly doubled November’s figures.
The other reason is more aspirational. With China abandoning the Zero-COVID philosophy, a reopened economy poses a great opportunity for supply chains to reopen. That will hopefully eliminate—or at least reduce—many of the problems the sector saw this year. It’s worth noting that all of these figures pale against Tesla (NASDAQ:TSLA), which delivered 405,278 vehicles in the last quarter alone.
Wall Street, however, is largely unfazed about the Chinese electric vehicle market’s ability to compete. Both XPeng and Nio are considered Moderate Buys, while analyst consensus calls Li Auto a Strong Buy. Overall, analysts have consensus price targets of $16.14, $27.78, and $13.16 on NIO, LI, and XPEV stocks, respectively. This implies upside potential of over 50%, 21%, and 11%, as indicated by the graphic above.
