EV Stocks Outpace Market Rebound As Li Releases Latest Model
EV stocks outperformed Tuesday’s stock market rebound. China-based electric vehicle maker Li Auto introduced its new model L9 SUV on Tuesday, following a similar introduction from peer Nio last week — with both companies aiming to dominate China’s auto market. Meanwhile, Jefferies analysts cut its sales forecast for the industry in the wake of supply constraints from Covid and slow economic recoveries.
Li Auto (LI) is challenging Tesla to be the top name for luxury EVs in China. The Beijing-based manufacturer unveiled its flagship smart SUV today, the Li L9 electric-hybrid auto. The six-seater SUV has a driving range of 1,100km to 1315km (683 to 817 miles) and includes Li’s autonomous driving system, Li AD Max. Order reservations for the L9 go live today with a price point around $74,000. The L9 will hit Li Auto retailers starting July 1, and deliveries are set to commence by the end of August.
The Li ONE, Li’s first electric-hybrid model, was one of China’s top-10 sellers across all fuel types in 2020. In May, the company delivered 11,496 Li ONEs for the month and has delivered a total of 171,467 since its debut in December 2019. As of May 31, Li has 223 retail stores and 253 service locations in operation.
Alongside the L9 launch on Tuesday, Citigroup reiterated its buy rating and raised its 12-month price target for Li to $58.60 from $26.80 per share. Li stock is up about 11% today following the news. It’s trading just below $37 per share.
A five-week advance has lifted LI Stock to just below a 37.55 buy point. However, the market remains in a deep correction — a lousy time to jump into new positions. Watch for Li to form a possible handle.
EV Stocks: NIO’s New Model
On June 15, Li’s Shanghai-based competitor Nio (NIO) launched a new smart SUV of its own. The ES7 was the sixth and latest addition to its lineup of electric vehicles. The mid-large SUV has five seats and includes Nio Autonomous Driving, which allows for semi-auto pilot. Its driving range is 485 km to 850 km (301 to 528 miles) depending on the battery size. The ES7 will cost between $69,942 and $78,900, depending on the model and features. NIO’s ES7 is available for preorder now, with deliveries to begin at the end of August.
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Deutsche Bank analysts are bullish on NIO’s production. They expect deliveries to reach 25,000 per month by the end of the year, up from the current 7,000 monthly deliveries, according to a research note reported in the Wall Street Journal. Analyst Edison Yu says NIO’s ET7 and ET5 sedans are set to be the most desired cars in China’s premium market this year.
However, on Tuesday, Citigroup’s note on EV stocks slashed its price target for NIO to $41.10 from $87, but maintained its buy rating. So far, NIO stock is up almost 10% today and trading around $22.90. NIO stock has also staged a five-week advance. But it remains deep in a consolidation.
Slow Short-Term Sales?
On June 16, analysts at Jefferies lowered their expected EV sales numbers for 2022 and 2023 due to slower-than-expected market recoveries across the U.S., China and the European Union. They’re forecasting 8.7 million EVs will be sold in 2022, down from their previous consensus estimate of 9 million. And expected EV sales will reach 11.5 million in 2023, down from predictions of 11.8 million. Still, analysts say demand for EVs will remain strong and Jefferies raised its market penetration outlook to 11% and 14% for 2022 and 2023, respectively. Both are up 1% from the previous forecast. The long-term outlook is more optimistic. Jefferies expects global EV sales to reach 19 million in 2025 and 36 million in 2030.
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FedEx Gets An EV Delivery
Another blip on the EV stock radar Tuesday: FedEx (FDX) said it received its first 150 electric delivery vehicles from General Motors‘ (GM) tech startup BrightDrop. That was part of FedEx’s goal to become an all-electric, zero-emission delivery fleet by 2040. FDX has ordered 2,500 electric trucks, named Zevo 600s, for its parcel and delivery services, that will be incorporated into its fleet in the next few years. In preparation for going green, FDX has installed more than 500 charging stations throughout California and plans to bolster its charging infrastructure across its facilities. FDX stock climbed 0.6% to $230.30 per share on Tuesday, following a volatile week last week that left shares up more than 11%.
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