To The Moon

By Howard Smith

KEY POINTS

• EV charging infrastructure is expanding in both Europe and the United States.
• Nio just shipped the first power-swap station from its new base in Hungary.
• XPeng has officially launched its latest model, the G9 SUV, and has high hopes for it.

Nio and XPeng both recently had new launches, but macroeconomic conditions look to be hitting the stocks.

What happened

Chinese electric vehicle (EV) makers Nio($NIO Inc.(NIO)$ )and XPeng($XPeng Inc.(XPEV)$ )have both made recent announcements about expanding their businesses, but investors are punishing the stocks today anyway. Shares of U.S.-based EV charging company ChargePoint Holdings, on the other hand, had been rising. ChargePoint stock was off its highs and trading around breakeven at that time.

So what

Nio just announced that it shipped the first battery-swap station from its new facility in Hungary as it continues to expand in Europe. XPeng formally launched its high-end G9 SUV yesterday, which it expects to quickly become its best-selling vehicle and challengeT esla's Model Y in China.

But both stocks are being hit hard today as the macroeconomic picture in China is overshadowing that company-specific news. ChargePoint operates charging networks in the U.S. and Europe, so the stock is not going to react to the same news as the Chinese EV makers.

Now what

ChargePoint shares have also been moving higher over the last month as theBiden administration works to implementsome of the spending that has been allocated to help grow charging infrastructure domestically.

Nio is trying to lead a revolutionary change in EV charging with its battery-swap stations. The company offers a battery-as-a-service option that allows consumers to pay less up front for one of its EVs while effectively using a subscription service for replacing drainedbatteries.

Nio already has more than 1,100 swap stations in China where drivers can obtain a fully charged battery pack in a matter of minutes. As Nio has begun exporting its vehicles into Europe, it has plans to add those battery-swap stations there, too. Nio began shipping vehicles to Norway last year, and is adding other European countries to its list of export destinations this year.

That includes Germany, where Nio just sent its first swap station this week. Nio constructed a power facility in Hungary to implement the shipment of the swap stations into Europe. The company said it expects to add 1,000 swap stations outside of China by 2025.

XPeng is also growing its product offerings with the higher-end G9 SUV it launched this week. The company hopes to take on Tesla's Model Y with the new EV and expects it to become XPeng's best-selling vehicle.

But these two stocks are moving down today despite the businesses moving forward. That's likely from uncertain conditions in China related to COVID-19 lockdowns and a struggling real estate market.

But if investors believe in the long-term success of both Chinese EV makers, these declines could be an opportunity for high-risk investments.

Resource: the Motley Fool