To The Moon

🌟🌟$Li Auto(LI)$  unexpectedly lowered its guidance for its 1st quarter deliveries on Thursday and also lowered its sales target for the full year as well.   Li Auto now expects  to sell between 560,000 and 640,000 units for the full year of 2024, down from the previous 650,000 to 800,000 units.

Li Auto  expects vehicle deliveries in Q1 24 to be in the range of 76,000 to 78,000 units, down from the previous figure of 100,000 to 103,000 units due to a lower than expected order intake.

As a result Li Auto share price fell 14% this week.  Other China EV stocks fell too in sympathy. $NIO Inc.(NIO)$  is down 16% for the week while $XPeng Inc.(XPEV)$  fell 17%.

In other news, William Li, Founder, Chairman and CEO of Nio showed off the interior of the first model of Nio's sub brand Onvo in a short video on Douyin and said that he took test rides  and test drive the first model of the Onvo vehicle on the factory site.

The Onvo L60 will be a direct competitor to Tesla's Model Y.

 Nio Power and Zhongan signed an agreement to collaborate on the planned construction of battery swap stations.  The 2 companies will work together on battery standards, charging and battery swap technology, battery swap network and construction.

Todate Nio has 2391 battery swap stations in China and Nio plans to add 1000 more battery swap stations in 2024, bringing the total to more than 3310.

Nio has also just  signed a deal with CATL to jointly develop longer life EV batteries.  This will eliminate the need to worry about high replacement costs due to improper batteries or reduced vehicle residual values due to the aging of the batteries.  This will be a good selling point for Nio once these new batteries are ready.

XPeng shares fell 8.7% on Friday on news that Alibaba has filed to sell another 33 million of XPeng's American Depositary Shares worth USD 314 million.  This will reduce Alibaba 's stake from 10.2% to 7.5% after the sale of the shares.  Alibaba said that the move was based on the company' s capital management goals.

$Tesla Motors(TSLA)$  will increase prices in China on April 1 with the Model Y's price to go up by RMB 5000.    Tesla's current insurance subsidy of RMB 8000 and paint reductions of up to RMB 10,000 for stock vehicles will expire on March 31.  This is according to a report by a local media outlet Cailian.

This is a turnaround from Tesla 's January 12 decision to cut prices of both versions of Model 3 and Model Y.

Tesla is also planning to reduce the production of EVs at its China factory amid sluggish growth in EV sales and fierce competition in the market according to a report by Bloomberg. So instead of working 6.5 days, Tesla employees at its Shanghai Gigafactory will now work 5 days week to reduce the production of Model Y and Model 3.

While Tesla is increasing prices, its rival $BYD COMPANY(01211)$  is expanding.  BYD will officially launch its compact electric SUV Yuan Up on March 26.  The Yuan Up will be the first A0 class pure electric SUV in BYD's all electric e-Platform 3.0 with a range of 401 km. 

BYD 's chairman Wang Chuanfu is expecting that China could see monthly new energy vehicle penetration to exceed 50% within the next 3 months. 

According to China Passenger Car Association, in March China' s retail sales of passengers EVs are estimated to be around 750,000 units, up 37% year on year and up 93% from February.  New EV penetration is expected to reach a record 45% in March.

So while the EV uptake is increasing, each  EV company has its own perspectives and different goals.  BYD is on an expansionary phase with new markets launches in Europe while Tesla is cutting back on production.

Ultimately the best EV companies will continue to expand by developing new models, new markets, new technologies.  It is a fast moving industry and the strong and innovative EV companies will not only survive but thrive as well.

So as an investor, I have to keep up todate with the latest developments in this exciting industry so as to choose the best EV stocks to buy and hold long term. 

As Warren Buffett likes to say Buy Wonderful Companies at a Fair Price and his favourite holding period is forever. 

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