In 2024, Chinese electric vehicle (EV) stocks experienced significant volatility. Although the unrest in the EV sector is contributing, larger worries about the Chinese economy and some of the market’s pessimism toward Chinese equities are also fluctuating in the industry.
The performance of Chinese EV stocks has diverged during the past few weeks. The group’s strongest performer, NIO (NIO), has increased by more than 40% in the past month.
Xpeng Motors (XPEV), up over 10%, is in the middle.
In this blog, we have thoroughly analyzed the two EV stocks, Nio and XPeng, and our analysts have highlighted observations about which one is a good investment.
Company Background:
Both companies’ backgrounds and work must be studied to determine their future performance.
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Nio Stock:
NIO Inc. is a holding company headquartered in China that manufactures high-end smart electric cars. The company’s primary business is designing, developing, producing, and selling luxury intelligent electric cars.
The company’s primary products are ES8, ES6, EC6, and ET7. It also creates technologies for autonomous driving and battery switching. Its electric cars use NAD (NIO Autonomous Driving) technology, which includes the supersensing system NIO Aquila and the supercomputing platform NIO Adam.
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XPeng Stock:
A Chinese smart electric vehicle (EV) company is called XPeng Inc. (XPeng). The business creates, develops, produces, and markets intelligent electric vehicles (EVs). The G3i (compact SUV), P7 (sports sedan), P5 (family sedan), G9 (flagship SUV), and P7i (sports sedan) are among XPeng’s intelligent electric vehicle (EV) models. It runs manufacturing facilities in Guangzhou and Zhaoqing, China.
Xpeng is active in Germany, Denmark, the Netherlands, Norway, and Sweden. Its main office is in Guangzhou, China.
Financial Performance
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Nio Stock:
NIO Inc.’s first quarter ended March 31, 2024, results were released. The company reported CNY 1527.32 Million in sales for the first quarter, up from CNY 1451.99 million in the same period last year. Compared to CNY 10,676.47 million a year earlier, revenue was CNY 9,908.64 million. Compared to CNY 4,803.63 million a year earlier, the net loss was CNY 5,257.92 million. From continuing operations, the basic loss per share was CNY 2.57 as opposed to CNY 2.91 in the previous year. From continuing operations, the diluted loss per share was CNY 2.57 as opposed to CNY 2.91 during the last year.
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XPeng Stock:
XPeng Inc. reported earnings results for the first quarter ended March 31, 2024. For the first quarter, the company’s EV stock reported revenue of CNY 6,548.1 million compared to CNY 4,033.42 million a year ago. Net loss was CNY 1,367.89 million compared to CNY 2,336.96 million a year ago. Basic loss per share from continuing operations was CNY 1.46 compared to CNY 2.72 a year ago.
Technology & Innovation
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Nio Stock:
Over the previous five years, NIO has significantly advanced battery technology, improving performance and safety features. The management of thermal runaway, a crucial component of battery safety, has advanced by introducing a design resistant to heat propagation. This architecture’s all-weather temperature management system improves battery longevity, performance, and safety.
NIO’s cutting-edge cloud-based integrated battery management system (BMS) is a key component of its technological edge.
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XPENG Stock:
Recognized for producing electric vehicles (EVs) with outstanding digital capabilities, XPENG is heavily influenced by self-driving capabilities to keep up with evolving mobility trends. The company’s intelligent in-car operating system, Xmart OS, was created to provide drivers with best-in-class functionality and its in-house designed XPILOT solution.
XPENG’s vehicles focus on technology, and the business will probably work to enable autonomy in the future.
Risk Factors
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Nio Stock:
Revenue Volatility: Nio has always been prone to fluctuating macroeconomics trends, so that the revenue can be highly volatile due to vehicle sales changes and market demand.
Profitability Challenges: As a relatively young company, Nio may struggle to achieve consistent profitability, which could impact investor confidence.
Debt Levels: High debt levels can be a concern, as they may affect Nio’s ability to finance operations and growth initiatives.
Cash Flow Issues: Negative cash flow or inadequate cash reserves can limit Nio’s ability to invest in new technologies and expand its market reach.
Dilution Risk: Issuing new shares to raise capital can dilute existing shareholders’ equity, potentially lowering the stock price.
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XPENG Stock:
Competition: The EV market is highly competitive, with numerous established players such as Tesla, Nio, and BYD. XPeng must continually innovate and offer superior products to maintain and grow its market share.
Market Demand and Economic Conditions: Economic conditions, consumer preferences, and government policies influence the demand for EVs.
Production and Supply Chain Issues: XPeng relies on a complex supply chain to produce its vehicles.
Analyst Ratings and Investor Sentiment
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Nio Stock:
NIO expects sales of $2.37 billion, with a range of $2.26 billion to $2.62 billion, for the upcoming quarter. Sales for the preceding quarter totaled $1.38 billion. Over the last 12 months, NIO has exceeded its sales projections by 0.00%, while the industry has exceeded sales projections by 56.11%.
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XPeng Inc:
The earnings estimate for XPEV for the upcoming quarter is—$0.23. The EPS for the prior quarter was—$0.20. Throughout the last 12 months, XPEV has beat its EPS estimate 50.00% of the time, while the industry as a whole has beat its EPS estimate 61.04% of the time. Over the past year, XPEV has underperformed its industry as a whole.
Nio stock or XPENG Inc- Which one should you invest in?
Investors should carefully evaluate several factors before deciding between Nio and XPeng. Consider each company’s financial health, growth prospects, technological innovations, and market positioning. Assess the competitive landscape, regulatory environment, and potential risks such as supply chain disruptions and economic fluctuations.
Review analyst ratings and investor sentiment and weigh each company’s long-term strategic plans and expansion efforts. Diversification and personal risk tolerance are crucial.
Ultimately, thorough research and a clear understanding of individual investment and updates from websites such as Abbo News are essential for making an informed choice between Nio and XPeng.
