Are EV stocks still attractive?
The Chinese electric vehicle makers $NIO-SW(09866)$ , $XPENG-W(09868)$ and $LI AUTO-W(02015)$ have been weighed down by waning domestic EV demands amidst a patchy recovery of the Chinese economy and intensifying competition both in the local and international marketst, as more players jump onto the EV bandwagon. The race to the bottom in the prevailing price war has resulted in narrowed profit margins, as the EV makers attempt to undercut one another to increase or defend their market shares. With slowing demands and shrinking profit margins, I would refrain from adding exposure to the trio until signals emerge of the recovery of the Chinese EV demands.
Meanwhile, I favor EV makers with deeper pockets such as BYD, $Tesla Motors(TSLA)$ and $XIAOMI-W(01810)$ that have much greater resources in coping with the macro headwinds and slowing demands.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. As its CEO Elon Musk would proclaim, Tesla is not a automaker, but rather as a digital platform ready to capitalize on the growing global demands for automation and digitization. Tesla is poised to take advantage of artificial intelligence as it drives the next phase of growth of Tesla.
@TigerWire
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
