To The Moon

The Chinese EV industry led by $BYD COMPANY(01211)$  , $XPENG-W(09868)$  , $NIO-SW(09866)$  , $LI AUTO-W(02015)$  and $XIAOMI-W(01810)$  has been weighed by slowing domestic EV demands, not helped by overcapacity as a result of aggressive expansion to secure market shares in the highly competitive Chinese market, as more players jump onto the EV bandwagon, the latest entry being Xiaomi with a deep pocket. Nevertheless, the Chinese EV makers have proven themselves to be adapting well to waning domestic demands, rising competition and an ensuing price war, by containing their costs, sealing partnerships and expanding to overseas markets. With their lower cost structures and richer EV lineup to capture different segments of the market, the Chinese EV makers have been giving Tesla a run for its money.

With better knowledge of the local market, their sales have proven to be resilient despite slowing demands at the expense of Tesla, while their profit margins have remained stable with their lean cost structures. Despite being late to the party, Xiaomi has been so successful in its early EV launches and selling so much more EVs than it has expected, that it is raising hopes to be able to break even sooner than predicted.

Hence, a rebounce may be in sight for the Chinese EV sector. In fact, I believe the current stock prices of the Chinese EV makers are not doing justice to their fundamentals and may present opportunities to participate in their long-term growth.

@TigerWire