Electric vehicle stocks took a beating last year as the global market witnessed a surge in sales that affected the EV market. However, in 2024, a revival is on the horizon with the projected EV sales volume about to hit $623 billion.
The Underdog Champion: Li Auto (LI)
Li Auto (NASDAQ:LI) stands out as a notorious pick among Chinese EV stocks, defying conventional wisdom with its stagnant stock price owing to broad economic challenges caused by factors like high-interest rates and soaring oil prices.
Despite these macroeconomic winds, Li Auto boasts an average 12-month price target of $54, indicating a potential 70% upside. With all ten analysts unanimously recommending a buy on the stock, Li Auto’s impressive performance has grabbed many eyeballs.
In 2023, the company’s stellar delivery figures saw a striking 182.2% increase in vehicle deliveries compared to the previous year. What sets Li Auto apart from its peers is its profitability, as evidenced by its Q4 2023 earnings report surpassing expectations and showcasing profits – a first for Chinese EV firms.
Expanding its product line, Li Auto is gearing up for the launch of the more affordable Li L7 and Li L8 models in May, aiming to reach an annual sales target of 800,000 units by 2024. With China dominating EV sales, Li Auto stands to gain from the government’s substantial subsidies.
The Fallen Star: Nio (NIO)
Nio (NYSE:NIO) once held the crown among Chinese EV stocks, but its glory days seem to be fleeting, with a 45% decline in shares in 2024. A slowdown in EV sales coupled with a significant jump in net losses have shifted investor focus to Li Auto in recent times.
To revamp its position, Nio is venturing into new markets globally, making a strong push in Europe and the U.S. Nio’s launch of the ultra-luxury ET9 is poised to compete with high-end players like Tesla and Porsche, offering advanced features like self-driving capabilities and a rapid-charging battery.
Looking ahead, Nio eyes profitability in 2024, with analysts foreseeing a potential 50% surge in the stock price. As the company strives to gain traction in the competitive EV market, strategic acquisitions and self-sufficiency in the supply chain remain top priorities.
The Rising Contender: XPeng (XPEV)
XPeng (NYSE:XPEV) emerges as a potential dark horse with a 70% upside expectation based on a $13 per share target price, setting it on a similar path as Nio. However, XPEV faces concerns over stock dilution due to a substantial rise in outstanding shares in recent years.
Despite this, XPeng is aggressively broadening its footprint beyond China, particularly targeting the European market, the second-largest EV market globally. With operational bases already in Norway and the Netherlands, the company aims to expand its presence in key European markets by 2024.
XPeng’s focus on autonomous driving technology akin to Tesla’s Full Self-Driving and the success of models like the G6 SUV underscore its appeal to value-conscious consumers seeking competitive pricing. The company’s robust sales performance in 2023 bodes well for its future growth trajectory.