Electric Vehicle Stocks Are Having Their Best Year; Is This Just The Beginning?
Chinese electric vehicle stocks are on fire as the Tesla (TSLA Stock Report) halo spreads. The top Chinese EV stocks are buzzing with activity on Wednesday with Nio (NIO Stock Report) and Li Auto (LI Stock Report) both reporting double-digit percentage gains. And as if these aren’t enough, another electric vehicle maker from China is going public in the U.S. stock market soon. Here’s why you need to know about the Alibaba (BABA Stock Report)-backed electric vehicle venture.
Alibaba-Backed Xpeng’s IPO Process Kicks Off
Xpeng Motors will trade under the ticker ‘XPEV’. Xpeng Motors (XPEV Stock Report) plans to issue 85M ADSs at $15 per share to value the company at about $11B, according to Reuters. The company previously gave an IPO price range of $11 to $13 per share. With the new IPO pricing at $15, Xpeng is expected to raise about $1.28 billion. The listing process comes at a time where the company could capitalize on the current hot market for EV related stocks.
Unlike other EV manufacturers such as Nikola (NKLA Stock Report), Xpeng has a healthy sales record. The company already has two EV models on the market. These are an SUV, the Xpeng G3, and a sedan, the Xpeng P7. The latter was only launched in April, and Xpeng has shipped 1,966 units of them. The P7 registered sales of 1,641 units in the last month alone. Thus far, Xpeng has sold more than 20,700 EVs.
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When is Xpeng Motors Going Public?
Here comes the key question, when is Xpeng going public? Drum rolls… actually, the date hasn’t been set yet. What we know is that the company filed its IPO paperwork with the SEC on August 7, 2020. From the prospectus, the company disclosed that it generated $2.36 billion RMB in revenue last year. However, the company only managed to generate $1 billion RMB for the first half of 2020. Like other electric vehicle manufacturers, Xpeng’s drop in sales volume could be due to the coronavirus pandemic affecting demand and shipments.
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What To Watch Among Chinese EV Stocks?
No doubt, it has been a strong session for Chinese EV players in general in recent weeks. Nio, Li Auto and Kandi Technologies (KNDI Stock Report) all posted strong gains this week. Both NIO stock and LI stock have received ‘Buy’ ratings. It would be sensible for investors to pay close attention to the China automobile sales report for July which is coming out next week. That will be an indicator of how the demand for Chinese electric vehicles is faring. The reality is, China’s EV market remains the largest in the world. There is no reason to expect it to be a winner-takes-all market. Investors looking to gain exposure to this space have the luxury of being able to choose from a number of strong options.