Chinese EV Trio - Trend Prediction
Tariffs hike for Chinese EVs!
The European Union has hiked tariffs on electric cars imported from China, drawing a rebuke from Beijing, which sees the bloc as a vital and growing market for its auto industry. Additional tariffs of between 17.4% and 38.1% will be applied on top of the existing EU duty of 10%, according to a statement from the European Commission. That takes the highest overall rate to close to 50%.
NIO
Among popular Hong Kong stocks, shares of Chinese EV maker Nio have plunged 53% so far this year. Concerns about the company's profitability and intense competition in the Chinese EV market are impacting investor sentiment. Moreover, macro pressures are also weighing on Nio stock. These headwinds could continue to drag down Nio shares in the near term.
NIO share price
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 $NIO Inc.(NIO)$ and believe it will continue to pullback towards 3.63 USD final support.
XPENG
This week, Xpeng makes debut in Egypt marking another milestone in global expansion.
Egypt is “experiencing a rapid growth in the electric vehicle market, driven by government incentives and a growing awareness of environmental sustainability.” So Xpeng's entry into the market helps spur further growth in the sector.
Xpeng daily chart
Approximately around mid May, after the company released its earnings, Xpeng rallied but then erased all its gain towards the end of the same day, leaving a shooting star bearish pattern as highlighted by the green arrow in the chart above. Since then, the share price consolidated and stayed above the orange coloured trendline. However, last week, the share price finally failed to sustain above the uptrend line and broke below. This signifies the beginning of another short term downtrend and I strongly believe the share price will be bearish $XPeng Inc.(XPEV)$
LI
Li Auto said it has postponed plans to launch pure electric SUV models to next year, citing hurdles such as a lack of enough fast chargers. The decision comes as Li Auto, which has built its profits and success on four extended-range gas electric hybrid models, has also encountered a setback with its first fully electric model Mega that didn't meet its original expectation of sales.
LI daily chart
Li used to be the strongest among the Chinese EV trio but this year, it has the worst chart among them. 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. As long as the share price doesn't break out from this downwards channel, I am bearish for $Li Auto(LI)$
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The recent hike in tariffs on Chinese electric cars imported to the European Union (EU) has had a negative impact on Chinese EV stocks. NIO, a popular Chinese EV maker, has seen its shares plunge 53% this year due to concerns about profitability, intense competition in the Chinese EV market, and macro pressures. The disappointing earnings release has also contributed to the decline in NIO's share price.
Li Auto, another Chinese EV company, has postponed its plans to launch pure electric SUV models until next year due to challenges such as a lack of fast chargers. The company has also faced setbacks with its first fully electric model, Mega, which did not meet sales expectations. As a result, Li Auto's share price has been extremely bearish and has been trading under a parallel downtrend channel since early March.
When considering investing in US or Chinese EV stocks, it is important to evaluate various factors. Here are some reasons to consider:
Market Potential: China is the world's largest automotive market and has been a major driver of EV sales. The Chinese government has implemented policies to promote EV adoption, which could benefit Chinese EV companies. On the other hand, the US market is also growing rapidly, with increasing demand for EVs and government incentives to support the industry.
Competitive Landscape: The Chinese EV market is highly competitive, with several domestic players vying for market share. Companies like NIO, Li Auto, and Xpeng are competing against each other and international players. In the US, Tesla has established itself as a dominant player in the EV market, but there are also other established and emerging companies in the industry.
Technology and Innovation: Both US and Chinese EV companies are investing heavily in research and development to improve their technology and develop new models. Tesla, for example, is known for its advanced battery technology and autonomous driving capabilities. Chinese companies are also making significant advancements in EV technology and are focused on innovation.
Regulatory Environment: Government policies and regulations can have a significant impact on the EV industry. It is important to consider the regulatory environment in both the US and China, including incentives, subsidies, and emissions standards.
Financial Performance: When investing in EV stocks, it is crucial to analyze the financial performance of the companies. Factors such as revenue growth, profitability, and cash flow should be considered to assess the long-term viability of the companies.
It is recommended to conduct thorough research and analysis before making any investment decisions. Consulting with a financial advisor or conducting your own due diligence can help you make informed investment choices.
Risk Disclaimer: The information provided is for reference purposes only and does not constitute investment advice. Investing in stocks involves risks, including the potential loss of principal. It is important to consider your own risk tolerance and financial situation before making any investment decisions.
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