If you’re looking to invest in EV stocks, there is really only one geography worth exploring China. The country marries the potential of electric cars with autonomous vehicle technology, ensuring companies hold the possibility of capitalizing on two multi-billion dollar markets.
China is nimbler than its European and North American counterparts in terms of regulation and execution. It recently opened up road access for highly autonomous vehicles, to speed up the rollout of Level 3 and Level 4 self-driving cars in several big towns, including Beijing, Shanghai, Guangzhou and Shenzhen.
In addition, Baidu and Pony.ai, among others, have been testing their robot taxis in designated areas since 2018, and the general public has shown increasing acceptance and interest in these services.
What’s more, for EV cars with autonomous driving abilities, China remains the best place to operate, with less regulation and more government support. The country wants to make sure 40% of all new vehicles sold by 2030 are electric, aiding in reaching net-zero emissions by 2060.
Hence, Chinese EV stocks, down double digits in 2024, are contrarian investments for investors wanting to play both AV and EV technology, since they offer better values and upside than pricey American peers like Tesla (NASDAQ:TSLA).
Li Auto (LI)
Li Auto (NASDAQ:LI), the first profitable Chinese EV startup, has a consensus rating of Strong Buy and an impressive upside potential of 79%; among the 12 analysts rating it, 11 recommend buying.
LI’s latest models use Nvidia’s (NASDAQ:NVDA) DRIVE Orin computers, which can run AD Max at 508 trillion operations per second.
The company wants Nvidia’s next-generation DRIVE Thor centralized car computer in its future cars. Its self-driving systems will benefit from DRIVE Thor’s AI computing platform, which includes an AI dashboard, parking, driver and passenger monitoring and autonomous driving.
LI is also developing Li AD Max 3.0, a self-driving system that uses AI models to make real-time decisions. By 2024, the company plans to implement this system in 100 towns. Meanwhile, it intends to begin doing business internationally in 2024, initially in the Middle East.
Apart from its autonomous driving initiatives, Li Auto is heavily funding China’s fast charging network, planning to build over 10,000 fast charging stations by 2025 to facilitate electric car charging.
Finally, LI is continuously adding to its portfolio; new products include the five-seat luxury SUV Li L6, released in April 2024, which has sold over 15,000 units. Three flagship family SUVs are available: Li L7, L8 and L9. Li Auto also released the high-tech showcase family MPV Li MEGA, its first fully electric car.
Nio (NIO)
Nio (NYSE:NIO) is making big advances in self-driving cars among EV stocks, with the NIO Adam supercomputer and NIO Aquila Super Sensing system key to its plan.
The NIO Aquila Super Sensing system has 33 high-performance sensing units, including GPS, IMU, high-resolution cameras, millimeter-wave radars, acoustic sensors and LiDAR. This method gives Nio good peripheral vision and 360-degree visual support.
What’s more, four Nvidia DRIVE Orin (SoCs) give the NIO Adam supercomputer 1,016 Tops of processing power. The setup uses advanced sensing algorithms, high-precision positioning from multiple sources and multi-mode forecasting and planning.
In addition, new Nio SUVs have Mobileye self-driving tech. This partnership wants self-driving cars in Oslo’s Grorud Valley by 2024 or 2025.
Besides these initiatives, now is a particularly fruitful time for Nio compared to other EV stocks, with May emerging as a record-breaking month — 20,544 cars sold. In May, Nio also launched Onvo, starting with the L60, targeting different segments of electric car buyers.
XPeng (XPEV)
XPeng’s (NYSE:XPEV) driver-assist technology, XNGP, integrates multiple forms of automated driving technology, and 82% of city dwellers utilized the XNGP system at the start of 2024.
In addition, XPeng is expanding its self-driving technology outside China, testing its navigation-guided pilot features on German roads, where they were effective. Plus, XPeng is testing its self-driving technology in Europe to sell it.
On the product side, AI-powered smart EVs from XPeng were on display at the Beijing Auto Show 2024.
Additionally, the Volkswagen Group and XPeng have signed a basic technical partnership in electronic and electrical design expected to accelerate XPeng’s car self-driving feature development and use. Besides this, XPeng’s flying car continues to gather attention, with the company now taking pre-orders, with delivery expected within 2024.
That said, XPeng plans to launch its G6 model in the U.K. by the end of 2024. With its cutting-edge technology and speedy charging, the G6 is designed to rival the Tesla Model Y.
Overall, XPeng delivered 10,146 cars in May 2024, a 35% increase from the same month the year before, and 9,393 cars in April 2024, a 33% increase versus the year-ago period. Deliveries from Xpeng to date this year total 41,360, an increase of 26%.
XPEV has a consensus rating of Moderate Buy from 14 analysts, with an upside potential of 53%; 10 of them recommend buying.
On the date of publication, Faizan Farooque did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
