To The Moon

🌟🌟🌟The Best EV news of the week comes from $Li Auto(LI)$  as it reported an Excellent Q423 earnings on Monday February 26 beating Analysts expectations. 

Li Auto achieved revenue of  USD 5.878 billion (up by a massive 136.4% from Q4 22) versus USD 5.599 billion expected.

Earnings per share was reported at 59 cents per share in Q423, well above estimate of 44 cents per share.

Full Revenue reached USD 17.44 billion in 2023.

Li Auto delivered 376,030 vehicles, an increase of 182% versus 2022.  In February 2024, Li Auto delivered 20,251 vehicles, up 21% but down 35% from January due to the Chinese New Year holidays. 

The latest results not only had a positive impact on Li Auto but lifted other EV stocks as well on Monday.

Li Auto is up 11% for the week and is up 25% year todate.  In the past year, Li Auto was up 71%.

$XPeng Inc.(XPEV)$  also did well this week with its share price up 11% for the week.  However XPeng is down 2.9% year todate but up 6% in 2023.  XPeng delivered 4, 545 vehicles in February, down 24% year on year and down 44% from January.   This was due to upgrades at one of its factories and the Lunar New Year holidays.  XPeng is due to announce its Q423 earnings on March 19.

$NIO Inc.(NIO)$  shares are also up 3.7% this week but has dropped 31% year todate.  In the past year, Nio was down 36%.

Nio saw deliveries fall further in January 2024 as the Chinese New Year holiday caused disruptions and potential customers are adopting a wait and see attitude for new 2024 models.  Nio delivered 8132 vehicles in February, down 33% from previous year and down 19% from January.   Nio will release its Q423 earnings on March 5 next week. 

$Faraday Future Intelligent Electric Inc.(FFIE)$  announced that it planned a 1 for 3 reverse stock split to regain compliance with Nasdaq listing requirements on Monday February 26.  This share consolidation was expected to come into effect on February 29 and marks Faraday's 2nd reverse stock split in 5 months after a cash crunch and supply chain issues wiped nearly 99% of its market value last year. 

On Friday Faraday Future's shares closed at 9 cents, giving the company a market value of around USD 11 million.   

Nasdaq had sent a notice to Faraday warning that its shares were at risk of delisting after trading below the USD 1 minimum trading price for 30 consecutive business days. 

Faraday's CEO Matthias Ayd said on Monday that the company was prioritising cash flow breakeven over volume to avoid scaling production too quickly. 

Faraday has only delivered 10 FF91 vehicles in 2023.  It reported a Q323 quarterly loss of USD 78.05 million last year. 

$Rivian Automotive, Inc.(RIVN)$  plummeted to a record low after it reported a Q423 results and profit forecast that missed Wall Street Expectations.  Rivian said on February 23 it sees vehicle production for 2024 hitting 57,000 units, well below the 80,000 units expected.  For the full year profitability Rivian said that it sees an adjusted EBITDA loss of USD 2.7 billion versus USD 2.59 billion expected with capital expenditure outlays hitting USD 1.75 billion versus USD 2.37 billion estimated.  Rivian said it would cut 10% of salaried staff citing economic uncertainty. 

Rivian share price fell more than 27% last week on Thursday.  Last week's selloff in Rivian lowered the value of Amazon's investment by USD 986.6 million.  Rivian's 65% drop year todate has taken off about USD 2.05 billion off the value of Amazon's investment.  In November 2023, Rivian ended its exclusivity deal with Amazon to provide Electric Delivery Vans. 

However thanks to the good news from Li Auto, Rivian is up 11% this week. 

Only Li Auto is profitable compared to Nio, XPeng, Rivian and Faraday Future.  It is simply amazing how Li Auto did it despite the competition and price cutting from other EV competitors especially from Tesla. 

However the EV market is huge.  In 2024, the revenue in the EV markets is projected to reach a staggering USD 623.3 billion worldwide.  It is expected that the EV market will demonstrate a steady annual growth rate of 9.8% between 2024 to 2028.  This growth will ultimately lead to a projected market volume of USD 906.7 billion by 2028.

It is important to choose wisely which EV stock to invest and ride the huge upside potential ahead.  I would certainly choose an EV stock that meets the core fundamentals of profitability, solid balance sheet and an excellent management team.   That's the hallmark of great investments and Warren Buffett's Winning formula. 

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