Nio, Xpeng, Li Auto: After A Stellar June, Are Chinese EV Stocks A Buy?

In our analysis Nio, Xpeng & Li Auto: How Do Chinese EV Stocks Compare? we compare the financial performance and valuations of the major U.S.-listed Chinese electric vehicle players. Nio stock has rallied by almost 38% over the last month, Li Auto gained 45%, and Xpeng surged by almost 58%. Now although the three companies posted mixed delivery figures for the month of May, with Nio and Li Auto both posting declines in their deliveries versus April, and Xpeng growing sales marginally, the sales numbers likely weren't as bad as expected, considering the semiconductor shortage that has roiled the auto industry. Nio stock remains down by about 20% year-to-date while Xpeng is down by about 22%. See our analysis on Nio, Xpeng & Li Auto: How Do Chinese EV Stocks Compare? for an overview of the financial and valuation metrics of the three U.S. listed Chinese EV players. Our analysis Nio, Xpeng & Li Auto: How Do Chinese EV Stocks Compare? compares the financial performance and valuation of the major U.S. listed Chinese electric vehicle players. While Tesla is a leader in the Chinese luxury EV market driven by production at its new Shanghai facility, Nio, Xpeng, and Li Auto - three relatively young U.S. listed Chinese electric vehicle players, have also been gaining traction. In our analysis Nio, Xpeng & Li Auto: How Do Chinese EV Stocks Compare?we compare the financial performance and valuation of the major U.S. listed Chinese electric vehicle players. On a relative basis, Nio trades at about 15x projected 2020 Revenues, Li Auto trades at about 12x, while Xpeng trades at about 20x. While valuations are certainly high, investors are likely betting that these companies will continue to grow in the domestic market, while eventually playing a larger role in the global EV space leveraging China's relatively low-cost manufacturing, and the country's ecosystem of battery and auto parts suppliers.