Despite Tesla having a head start, overseas competition is stiff and is catching up when it comes to the EV industry. China has seen a rise in its EV stocks such as NIO (NIO) and XPeng (XPEV) and a July 2020 report from McKinsey & Co. found that European EV sales increased by 44%, marking the highest growth rate since 2016. In fact, the most recent reports are showing a new competitor in China that wasn’t too relevant even a year ago.
The name of the company is Li Auto and they reported more deliveries than XPeng in June. This August, Li Auto is back at it again, proving themselves as one of the top dogs in the EV industry. After already raising billions of dollars last year through their US IPO, Li Auto is ready to go public in China and has set the maximum price of its Hong Kong initial public offering at $150HK or roughly (US$19.29) per share. At this price point Li Auto is poised to potentially raise $1.9 billion.
Despite selling close to 9,000 cars last month, Li auto is still closely trailed by Chinese competitor XPENG, who is only a few hundred cars short of Li Auto in monthly units. And overall, both companies must still contend with Tesla’s superior battery technology and public brand strength. One other issue with Li Auto it its profitability, according to Li Auto themselves:
“We have not been profitable since our inception. We may not generate sufficient revenues or continue to incur substantial losses for a number of reasons, including lack of demand for our vehicles, increasing competition,”. What do you think about the Chinese EV market? And do you think one of these companies has what it takes to take the spot as the global leader in Electric Vehicles?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.