Tesla continues to win even as Chinese EV enemies watch sales soar

Stocks got back on track on Monday, and the Nasdaq composite (NasdaqINDEX: ^ IXIC) helped lead the way higher. Even though other major market benchmarks gave up a large chunk of their daily gains, the Nasdaq was still up a third of a percent as of 12:30 p.m. EDT.

Electric vehicles have been a hot sector of the market lately, and You’re here (Nasdaq: TSLA) remains the leader in this premier industry. Even though Chinese competitors were the most talked-about on Monday, Tesla’s stock continued to rise as investors seemed confident in the company’s ability to stay on top of the fast-growing market. Below, we’ll take a look at what Chinese EV companies have said and what that means for Tesla and the industry in general.

Image source: Tesla.

China loves electric vehicles

Several Chinese electric car makers have released their latest monthly results. They all showed continued growth, albeit at different rates.

Actions of Nio (NYSE: NIO) rose nearly 3% Monday afternoon. The company said it delivered 7,931 vehicles in July, a jump of nearly 125% from the same month a year ago. Nio delivered 3,669 ES6 five-seat SUVs, 2,560 EC6 coupe SUVs and 1,702 six- and seven-seat ES8 SUVs. This brought the total number of vehicles that Nio has delivered in its history above the 125,500 mark.

XPeng (NYSE: XPEV) saw an even bigger rise, with its stock climbing 6%. The automaker announced July deliveries of 8,040 vehicles, up 228% year-on-year. Deliveries of the P7 midsize sedan reached 6,054, while XPeng shipped 1,986 of its compact SUV model, the G3. 2021 has been a bumper year for XPeng, with seven-month year-to-date deliveries nearly quintupled the same number as in 2020. The company attributed much of the P7’s popularity to its platform. form of driver assistance guided by current navigation and technology. innovation could make this feature even more valuable for drivers.

Recently, Li Auto (Nasdaq: LI) leads the pack with 8,589 deliveries in July. The company’s Li ONE has been a huge success, with almost 38,750 deliveries since the start of the year. July again marked a record month for deliveries, and co-founder Yanan Shen predicted that further improvements by the end of 2021 will further support the positive perception of Li Auto’s vehicle model among consumers. Li’s shares were up 2% on the day.

Tesla keeps winning

Some would have thought that gains in Chinese EV stocks would lead to losses for Tesla, but that’s not how investors saw it. Instead, Tesla shares rose 5%, as shareholders seemed to assume that while China’s own automakers are successful, Tesla also serves the Chinese market with vehicles from its Shanghai Gigafactory.

Tesla got a vote of confidence from KGI Securities on Monday. Analysts gave Tesla an outperformance rating and set a price target of $ 855 per share, which means almost 20% more upside from where the stock is currently trading.

The other news item affecting Tesla came from Piedmont Lithium (Nasdaq: PLL), which said it would delay deliveries of lithium to the automaker. Shares in Piedmont were up even though the supplier did not specify a date by which it could honor its deal with Tesla.

As a leader in the field of electric vehicles, Tesla has managed to keep the competition at bay while steadily expanding the addressable market for electric vehicles of all kinds. This is positive for the entire industry, and it means Chinese electric vehicle stocks can win without jeopardizing Tesla’s key role in promoting innovation in the industry.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

Floyd N. Morlan