The persistently high-interest rate environment affected consumers’ ability to afford cars, consequently impacting the sales of EVs (electric vehicles) in 2023. This led the industry titan Tesla (NASDAQ:TSLA) to cut its prices to boost volumes. As this sector may continue to face macro challenges in 2024, Wall Street analysts are either sidelined or cautiously optimistic about EV stocks. Nonetheless, TipRanks’ Stock Comparison tool shows that analysts favor these two Chinese EV stocks: Li Auto (NASDAQ:LI) and Nio (NYSE:NIO).
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With analysts being optimistic about LI and NIO stocks, their average price target suggests significant upside potential.
What is the Forecast for Li Auto?
Li Auto stock has gained about 63% year-to-date. The notable growth in LI stock reflects its strong delivery numbers, growing revenues, and focus on improving efficiency and lowering costs. Additionally, the introduction of Mega, its all-electric vehicle boasting an impressive 500-kilometer driving range, has contributed to the upward trajectory of its stock price.
The company delivered 41,030 vehicles in November, marking a remarkable growth of about 173% year over year. Furthermore, the cumulative year-to-date deliveries have surpassed expectations, reaching 325,677 cars and exceeding the 2023 target of 300,000 ahead of schedule. With Li Auto consistently achieving robust delivery figures, analysts see substantial upward potential in its shares over the next 12 months.
Four analysts cover LI stock, and all recommend a Buy. Further, the average LI stock price target of $53.75 suggests that it has the potential to rise by 61.9% from current levels.
Is Nio Stock Expected to Go Up?
Nio stock has underperformed the broader markets, losing about 14% of value year-to-date. Heightened competition led by Tesla’s aggressive pricing strategy and macro headwinds took a toll on Nio’s margins and share price.
Nevertheless, Nio’s focus on driving profitability, production ramp-up, efforts to broaden its collaboration in battery swapping, and growing sales of NT2 products, which command higher average selling prices, are likely to significantly boost its margins.
This is reflected in analysts’ bullish outlook on NIO. With seven Buy and two Hold recommendations, NIO has a Strong Buy consensus rating. Further, the average LI stock price target of $11.36 suggests that it has the potential to go up by 34.9% from current levels.
Bottom Line
While Tesla maintains its leadership in the EV segment, its stock has more than doubled in 2023, keeping analysts sidelined. On the contrary, the improving delivery numbers and margins of Li Auto and Nio keep analysts bullish on their prospects. Also, LI and NIO stocks offer notable upside potential based on analysts’ average price target.
