NIO, LI, or XPEV: Which Chinese EV Maker Is the Best Pick?
2024-09-13 04:08:06
The Chinese electric vehicle (EV) market has grown rapidly, becoming the largest in the world. However, this growth has led to fierce competition, which has pressured margins and stock prices of major players. In this article, using the TipRanks Stock Comparison tool, I’ll explain why I rate Li Auto (LI) as a Buy and view it as a better investment than Nio (NIO) and XPeng (XPEV), which I rate Hold and Sell, respectively.
Contrary to my pessimistic view, analysts’ consensus is bullish on XPeng’s stock. It holds a “Moderate Buy” rating, with seven out of ten analysts recommending a Buy. The average price target is $11.55, suggesting potential upside of 26.51%.
Conclusion: LI Auto Is My Top Pick
Investing in Chinese EV stocks has been risky, with several headwinds driving industry-wide selloffs. Among the players, I view Li Auto stock as the least risky and rate it a Buy, thanks to its reasonable valuation and strong margins. In contrast, Nio’s profitability challenges warrant a cautious outlook, while XPeng’s low margins support a bearish stance.
