Much of the electric vehicle (EV) market these days is focused on Tesla (NASDAQ:TSLA). When it started launching discounts on its popular line of EVs, that put the rest of the field in a bad position. While Tesla is rallying into Friday afternoon’s trading, Nio (NASDAQ:NIO) can’t say the same. Neither can Xpeng (NASDAQ:XPEV). Both of these electric vehicle makers were down significantly in late Friday trading.
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It’s easy to forget sometimes that Tesla delivers significantly more electric vehicles than any of the major Chinese EV makers. Nio posted a record 40,000 deliveries for the fourth quarter. Xpeng nearly doubled its November numbers by delivering a little over 11,000 vehicles. Tesla, meanwhile, delivered close to eight times what both of them did combined, at 405,000 for the fourth quarter. Thus, when the company that puts out the most electric vehicles around offers discounts, that leaves smaller players in a bad position and prompts investors to pull out like we saw today.
However, the price cuts were largely necessary. The Chinese government closed the book on some EV incentives, reports noted, which forced price cuts just to keep sales going. Without the CCP picking up the tab on some vehicles, that would mean losses all around as the Chinese customer instead looks at gas vehicles. Or, they could wait for prices to drop naturally as new models emerge. Thankfully, certain supply chain issues that were preventing car companies from making up the losses on volume are starting to relent.
While Tesla was the only gainer today, all three are down significantly over the past year. Moreover, in an unexpected twist, all three EV makers are considered Moderate Buys according to analyst consensus. Their potential, however, is the biggest difference. XPeng has a scant 14.20% upside, thanks to its average price target of $11.54 per share. Nio, with an average price target of $16.14, has an upside potential of 57.31%. Tesla’s future may be the brightest, with an average price target of $256.67, which gives it an upside potential of 125.27%.
