Last week shocked electric car investors with earnings reports from Tesla's small Chinese competitors.
The Chinese company NIO increased sales by 146%, deliveries of its products amounted to about 13 thousand vehicles. At the moment, the pace of development of NIO resembles the pace of Tesla 4 years ago. Bank of America, Deutsche Bank and JPMorgan raised their NIO stock prices. Nio is expected to be profitable starting in 2023, a year earlier than previously predicted.
Xpeng and Li Auto are very vague in their forecasts regarding the results, but at the same time they made optimistic forecasts for sales and profits: Li Auto an increase in profits by almost 20%, Xpeng an increase in sales compared to the previous period by 160% and a positive profit. This allowed the shares of these companies to creep up again, after a short drop caused by the NIO report.
After all the reports provided, a reasonable question arose: have Chinese electric car manufacturers started redesigning the market in China, like Tesla in the United States, or are they simply imitating the heights of Tesla's stock market?
At the moment, all disputes over Chinese cars boil down to one thing: will there still be such a breakthrough as Tesla? That is why investors are buying up shares in Chinese electric car companies, hoping for a breakthrough and counting on a large domestic market.
So far, only 5% of Chinese cars are electric; according to forecasts, this figure will reach 10% by 2027.
"LI, NIO and BYD are creative, innovative companies with a focus on the china market, which has 8-10 times more room to grow electric car sales," said specialist from Wedbush Securities.
General Motors has increased its planned investments in electric and self-driving vehicles by 36%.
“We want to be at the top and to lead, not just participate,” Doug Parks, GM's executive vice president of global product development, procurement and supply chain, told reporters.
With the observed growth of Chinese electric car manufacturers, Tesla has no reason to worry, whose shares have grown 7 times this year. Tesla is also building a plant in China, which allowed them to freely enter the local market and increase brand awareness. So far, not a single Chinese company, starting with NIO, Li Auto and Xpeng, positioning themselves as manufacturers of only electric vehicles, ending with Geely Auto, which adds a line of electric cars to gasoline cars, have achieved experience in intelligent development, software.
In order to give a deep assessment of the Chinese automakers will take time and it is too early to draw any conclusions. It is also worth paying attention to such variables as battery costs, the global pandemic crisis, vaccine development and how these events will affect the world in general and companies in particular.