China's EV upstarts appear to be plotting world domination. They are targeting developing markets like Brazil and Indonesia as the US and Europe impose tariffs. Western car giants run the risk of ceding the rest of the world to China. Western governments are taking steps to protect their markets, with Joe Biden imposing sweeping tariffs on Chinese automakers and the EU passing its own measures. Today, let's look at the charts of the famous 3 Chinese EV makers.
NIO
Nio upgraded virtual voice assistant, NOMI GPT, which incorporates artificial intelligence technology, reached more than 10 million user interactions. This comes 76 days after the new version of the virtual voice assistant was launched on April 12. NOMI GPT completed tasks including trip planning, role-playing, and text creation in its interactions with users.
NIO daily chart
What a wasted rebound for NIO share price since earlier May, all being erased during the past weeks due to the release of disappointing earnings. If we zoom out a bit for its mid term trend, it seems like NIO is still facing difficulties to breakout beyond its downtrend line since December 2023, as illustrated by the ORANGE line. For such, I remain bearish for NIO $NIO Inc.(NIO)$
XPENG
Xpeng Motors CEO He Xiaopeng has shared his observations and feedback after personally experiencing Tesla's Full Self Driving system. The executive seemed to have come out of his experience behind the wheel of FSD with a bullish stance on autonomous driving, as he stated in a post on Weibo that he believes fully autonomous driving could see a “ChatGPT moment” next year. It seems like Xpeng is going to focus in its XNGP system.
XPEV daily chart
For the past 2 months, Xpeng share price consolidated and formed a symmetrical triangle pattern. However, 2 weeks ago, the share price failed to sustain above the lower uptrend line and broke below. This led to another round of downtrend as we can observe through the chart. For such, I strongly believe Xpeng $XPeng Inc.(XPEV)$
LI
Li Auto is on track to offer its new level 3 automated driving system within the next 12 months, which would enable hands-free, eyes-off driving under certain conditions, as it transitions towards “end-to-end neural network” architecture. This marks an increase in competition between Tesla and Chinese automakers over the adoption of autonomous driving.
LI daily chart
As we can observe from its technical chart shared above, it is very obvious that we can conclude that Li share price is extremely bearish and has been traded under a parallel downtrend channel since early March. Recently, the good news is it seems like Li share price refuses to go lower and starts consolidate recently, this signifies that the share price might reach its bottom already. In addition, this week, Li started to stay outside its downtrend parallel channel. For such, I start to have bullish feel towards Li $Li Auto(LI)$
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NIO Inc. (NIO)
NIO is a Chinese electric vehicle (EV) manufacturer that has gained significant attention in recent years. The company is known for its innovative technology and stylish designs, which have helped it establish a strong presence in the EV market.
In terms of earnings, NIO has faced some challenges. The latest earnings report showed disappointing results, leading to a decline in the share price. However, it's important to note that the company has a positive earnings forecast for the future. Analysts expect NIO to improve its financial performance in the coming years, with forecasted EPS of -5.92 CNY for 2025 and -3.10 CNY for 2026.
From a technical perspective, NIO's stock price has been volatile. It experienced a rebound in May but has since erased those gains. The stock has been struggling to break out of its downtrend line since December 2023. Most of the rebounds have been short-term, forming lower highs. The current consolidation phase suggests that the stock may have reached its bottom, and there is a bullish sentiment towards NIO.
In terms of capital flow, NIO has experienced mixed trends. Over the past five days, there have been both inflows and outflows of capital. However, on a daily basis, there has been a small inflow of capital. This indicates that investors have shown some interest in the stock.
Analysts have provided a target price for NIO, with a mean estimate of 57.53 CNY, a low estimate of 32.0 CNY, and a high estimate of 122.0 CNY. It's important to consider these target prices as they reflect the opinions of market experts.
LI Auto Inc. (LI)
LI Auto is another Chinese EV manufacturer that has gained attention in the market. The company is known for its focus on developing level 3 automated driving systems and its transition towards an "end-to-end neural network" architecture.
In terms of earnings, LI Auto has a positive earnings forecast. Analysts expect the company to improve its financial performance in the coming years, with forecasted EPS of 13.86 CNY for 2025 and 19.02 CNY for 2026. This indicates potential growth in the company's business.
From a technical perspective, LI Auto's stock price has been bearish. It has been trading under a parallel downtrend channel since early March. However, there are signs of consolidation and the stock has started to stay outside its downtrend parallel channel. This suggests a potential bullish sentiment towards LI Auto.
In terms of capital flow, LI Auto has experienced mixed trends. Over the past five days, there have been both inflows and outflows of capital. On a daily basis, there has been a small inflow of capital. This indicates some investor interest in the stock.
Analysts have provided a target price for LI Auto, with a mean estimate of 35.06 USD, a low estimate of 21.0 USD, and a high estimate of 68.0 USD. These target prices reflect the opinions of market experts.
Investing in US or China EV stocks?
Investing in EV stocks can be an attractive opportunity due to the growing demand for electric vehicles worldwide. Both US and Chinese EV companies have shown potential for growth and innovation in this industry. However, it's important to consider the following factors when making investment decisions:
Market Potential: China is the largest EV market in the world, with a strong government push towards electric mobility. This provides Chinese EV companies with a significant domestic market advantage. On the other hand, US EV companies have a strong presence in the US market and benefit from the country's infrastructure and consumer demand.
Competitive Landscape: Both US and Chinese EV companies face competition from each other and other global players. It's important to assess the competitive landscape and the company's ability to differentiate itself and capture market share.
Regulatory Environment: Government policies and regulations play a crucial role in the success of EV companies. Investors should consider the regulatory environment in both the US and China and how it may impact the growth prospects of EV companies.
Financial Performance: Analyzing the financial performance and future earnings forecasts of EV companies is essential. It provides insights into the company's ability to generate profits and sustain growth.
Risk Considerations: Investing in individual stocks carries inherent risks, including market volatility, company-specific risks, and geopolitical factors. Diversification and thorough research are important to mitigate these risks.
It's recommended to consult with a financial advisor or conduct further research before making investment decisions. The information provided here is for reference purposes only and should not be considered as investment advice.
Disclaimer:The above analysis and recommendations are for informational purposes only and should not be considered as investment advice. Investing in stocks involves risks, and it's important to conduct thorough research and consider your own risk tolerance before making any investment decisions. The stock market is subject to fluctuations, and past performance is not indicative of future results.