What’s up with Chinese stocks EV, Nio, XPeng and Li Auto on Monday?

Stocks of electric vehicles from China NIO Inc (NYSE:NIO), XPeng Inc (NYSE:XPEV) and Li Auto Inc (NASDAQ:LI) traded higher on Monday amid reports pointing to the potential of China’s cash exchange program to boost demand for electric vehicles.

The program could translate into total electric vehicle sales exceeding 10 million in 2024, Bloomberg reports.

In July, China announced plans to launch incentives that would help consumers afford 20,000 yuan ($2,760) to scrap an old, higher-emitting car for an electric vehicle, or 15,000 yuan for a car on more efficient gasoline in terms of fuel consumption.

Many cities have followed suit, introducing additional incentives of $140-$1,400 per vehicle.

According to Bloomberg, BNEF analyst Siyi Mi expects higher Chinese government subsidies to boost car sales by up to 2 million, including 1.1 million electric vehicle sales worth $26 billion in revenue.

Nio delivered 20,498 vehicles in July, flat year-on-year, after electric vehicle companies began offering attractive discounts to increase market share. Li Auto delivered 51,000 vehicles in July, up 49.4% year-on-year. XPeng delivered 11,145 vehicles, an increase of 1% year-on-year. Reports have also indicated China’s plans to ban Chinese software in autonomous and connected vehicles, which is a hurdle for companies.

Nio shares have fallen 64%, XPeng 58% and Li Auto more than 48% over the past 12 months as they battled a domestic price war along with protectionist tariffs from the US and EU.

NIO stock prediction for 2024

Equity research can be a valuable source of information to learn about a company’s fundamentals. Analysts create financial models based on a company’s fundamentals and expected future earnings to arrive at a price target and stock recommendation.

NIO stock has a 1-year average price target of $6.8, representing an expected upside of 67.9%.

Because of the differences in assumptions, analysts can arrive at very different price targets and recommendations. No analysts have bearish recommendations on NIO, while 1 analyst has bullish ratings. Citigroup’s highest price target is $8.5, while B of A Securities’ lowest price target is $5.9.

Price Actions: Shares of NIO traded down 2.55% to $4.05 as of last check on Monday. XPEV is up 1.80 to $7.07 and LI is up 3.19% to $21.19.

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This article What’s up with Chinese EV stocks Nio, XPeng and Li Auto on Monday? originally appeared on Benzinga.com

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