EV stocks remain of great interest to the investment community, given the long-term growing trend in the acceptance of electric vehicle sales around the world. Estimates for 2024 suggest that EV sales could exceed 17 million units, which is more than 20% of cars sold worldwide. Under the current legal situation, electric vehicles are expected to account for around 55% of all light vehicle sales by 2035 and 40% of total sales by 2030.
China leads the world’s largest EV market, and the government has introduced notable policies such as production incentives and subsidies, making it an ideal region for EV stocks. About half of the EVs sold globally in 2023 will be made by Chinese manufacturers.
China is currently leading the growth of EVs, accounting for more than 60% of global EV sales in 2023. By 2028, China’s electric vehicle market is projected to grow from the current $319 billion to $398 billion.
So we take a look at three blue-chip Chinese EV stocks we recommend buying that are poised for double-digit gains. Moreover, these Chinese EV companies have recently shown strong monthly EV shipment numbers, supporting this positive theory.
Lee Auto (LI)
Source: Robert Way / Shutterstock.com
Li Auto (NASDAQ:LI) delivered 47,774 vehicles in June 2024, up 46.7% year-over-year. The figure brought second-quarter sales to 108,581, up 25.5% year-over-year. As of June, Li Auto delivered 822,345 vehicles, the most among China’s new energy automakers, boosted by the popularity of the Li L6.
Additionally, in April, the company unveiled the five-seater Li L6 premium family SUV, which will be available in two models, Modus and Max, with improved autonomous driving capabilities, a range extension system that will allow it to travel 1,390 kilometers (862 miles), and a retail price starting at $34,500.
Li Auto’s all-wheel drive range-extended technology, the Li L7, is already an ideal contender in the premium family SUV market sector.The five-seater premium family SUV comes equipped with the latest safety technology, a panoramic sunroof and a high-end entertainment system.
Li Auto is also working with Nvidia (NASDAQ:NVDA) to incorporate its Drive Thor platform into upcoming models, enhancing the vehicles’ self-driving and artificial intelligence capabilities.
Finally, Li Auto, the first major Chinese EV maker to turn a profit, is down double digits this year, mainly because deliveries of its all-electric SUV model have been delayed until 2025. But this represents an attractive entry point for the company’s shares, with upside potential of 81%.
XPeng (XPEV)
Source: THINK A / Shutterstock.com
XPeng (NYSE:XPEV) shipped 10,668 vehicles in June, a 24% increase from a year ago, including the release of the impressive XPENG X9, which boosted sales.
XPeng shipped 52,028 smart EVs in the first half of this year, 26 percent more than in the same period last year. XPeng plans to expand its product lineup by adding about 30 new and improved models over the next three years.
XPeng plans to roll out the P7+ sedan in the fourth quarter of 2024. Formerly known as the F57, the model was part of XPeng’s ambitions to expand its market share. In July, XPeng is set to unveil the Mona M03, an all-electric hatchback coupe.
In addition, XPeng’s AI Tiandi system XOS 5.1.0 and AI giant language model XBrain will drive AI and self-driving cars. XPeng aims to achieve L4 level autonomous driving by 2025, making it easier to drive cars autonomously.
Additionally, XPeng and Volkswagen (OTCMKTS:VWAGY) are working together to introduce Volkswagen’s MEB technology into upcoming electric vehicles. This collaboration will give China a cutting-edge digital EV platform, with Volkswagen expected to start production within 24 months.
Internationally, XPeng has launched the G6 Coupe SUV in Singapore for its global expansion, and the XPeng G6 will soon be launched in Malaysia, marking XPeng’s entry into this market.
Despite global growth and strong delivery statistics, the Chinese electric vehicle company’s shares are down more than 42%. The $11.5 price target suggests a 43% upside, making it one of the best-performing EV stocks.
NIO
Image credit: Michael Vi / Shutterstock.com
Nio (NYSE: NIO) shipped 21,209 electric vehicles in June 2024, marking the second consecutive month of delivering more than 20,000 vehicles. In the second quarter of 2024, 57,373 vehicles were shipped, up 143% year-over-year.
Going forward, NIO’s low-cost electric SUV (priced at $30,465) is scheduled to debut in China in September 2024. Aimed at rival Tesla’s Y car, the Onvo L60 should further boost NIO’s sales.
In addition, NIO’s sub-brand Alps will begin test production of its debut model DOM this year. The fully electric SUV can target cheaper markets with a switchable battery. Large-scale production is expected to begin later this year, helping NIO further expand its market share.
Nio is set to unveil interior improvements for the 2024 ET7 at the Beijing Auto Show, including new displays, AI technology for vehicle performance and stability, reclining options and increased computing power.
Additionally, Nio will release its second generation mobile phone on July 27. The AI-powered voice assistant NOMI GPT will improve the engagement of Nio vehicle users on this mobile phone. This integration will improve mobile and car integration.
Despite rising deliveries and new product releases, NIO’s shares are down 48% this year, giving it a 51% upside potential based on our $6.50 price target, solidifying its position among the best undervalued EV stocks.
As of the date of publication, Faizan Farooq 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 author in accordance with InvestorPlace.com’s Publishing Guidelines.
As of the publication date, the responsible editor (directly or
We do not indirectly hold any positions in the securities described in this section.
Faizan Farooque is a contributor to InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was previously a data journalist for S&P Global Market Intelligence. His passion is helping the average investor make more informed decisions about their portfolio.
