Chinese EV stocks are some of the best long term value buys for high growth investors.
Table of Contents
- Why Invest in Chinese EV Stocks?
- Best Chinese EV Stocks to Buy
- Are Chinese EV Stocks a Good Investment?
- Are Chinese EV Stocks Risky?
- Where to Buy Chinese Electric Car Stocks
Why Invest in Chinese EV Stocks?
China is the world's #1 electric car market due to its massive population and economy. However, China faces a lot of environmental challenges due to its huge population.
Smog and dust particles fill the air and can cause health problems. In major cities like Beijing, the air is so polluted that it's the equivalent of smoking 40 cigarettes a day.
Can EVs save China from its dangerous pollution problem? EVs help remove pollution from the environment since ICE vehicles cause around 80% of a country's carbon emissions.
Chinese President Xi Jinping set a goal to hit peak carbon emissions by 2030 and zero Carbon emissions by 2060.
Moving China from ICE vehicles to EVs is one of the best ways for China to reduce its carbon emissions and improve its green footprint.
That means Chinese EV makers will receive a lot of demand for their vehicles once more Chinese consumers make the switch.
China car sales quadrupled in February 2020 to 1.18 million vehicles while 97,000 of these sales were EVs (7x increase YoY).
EV sales will continue growing and it's only a matter of time until EV overtakes ICE vehicles in China.
Best Chinese EV Stocks to Buy
In this article, we'll go over the best Chinese EV stocks to buy. Here is a list of my Chinese electric car stock recommendations:
- Nio (NasDAQ: Nio)
- Li Auto (NASDAQ: Li)
- Xpeng (NASDAQ: SPEV)
- Kandi (NASDAQ: KNDI)
Here's a breakdown of each stock by total returns over the last 52 weeks:
Nio (NASDAQ: NIO)
Nio is the largest EV car company in China with over 43,000 EVs delivered in 2020 alone.
The company was founded by billionaire CEO William Li who set a goal to create a forward thinking electric vehicle company that runs on incredible software and technology.
Nio deliveries are projected for another record quarter with 20,000 to 25,000 deliveries for Q1 2021.
Nio stands out amongst its peers with its attractive vehicles and cost saving “battery swap” technology. Customers can “rent” their battery and swap it in the future to help lower the cost of the initial EV purchase.
When your Nio battery runs low, Nio customers can drive to a battery swap station and replace the old battery with a newly charged one. The whole revolutionary process takes just 3 minutes to complete.
Nio has a long way to go because the company has only sold a cumulative 88k vehicles since inception.
At about 1/10th of Tesla's production, Nio has ambious plans to expand to Europe as well as America in the future.
It's my favorite Chinese EV stock and looks attractive at these current price levels.
Li Auto (NASdAQ: Li)
Li Auto is another Chinese EV maker that seeks a growing market share of the Chinese electric car market.
Xpeng (NASDAQ: XPEV)
The company is rapidly increasing deliveries at a robust pace with 2,223 g3 and p7 deliveries in February 2021 alone. Combined January and February deliveries equals a 557% YoY increase.
Xpeng continues to build out its supercharger network like Tesla and operates 135 branded super charging stations as of Q3 2020.
What makes Xpeng unique is its focus on smart EV technology, self-driving, and its fast growing super charging station networks.
XPEV stock currently trades at a P/S ratio of 20 that's very similar to Tesla. The company will report Q4 2020 and full year results on March 8th and I'll be sure to update this article with a more accurate valuation of the company.
At just a $21 billion market cap, Xpeng looks undervalued as a long term investment.