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3 Little-Known Chinese EV Stocks Looking For Nio


Nio (NYSE:NIO) is by far the best-known Chinese maker of electric vehicles, at least in the United States. Ask most investors to name a Chinese electric vehicle brand, and many would likely struggle to find Nio. Beyond that, a few others might be able to name XPeng (NYSE:XPEV). But there are actually plenty of Chinese EV stocks for investors to choose from.

In fact, a recent article from New York Times estimates the number of Chinese electric vehicle manufacturers at more than 300. According to Wikipedia, there are less than 90 in the United States.

Additionally, investors might be surprised to learn that China is the largest and fastest growing market for electric vehicles in the world. In fact, 57% of electric vehicles sold worldwide have been in China. So, it makes sense that China would have more manufacturers vying to meet this greater demand.

Let’s take a look at some of the top Chinese EV stocks currently targeting Nio’s market share.

LI Li-Auto $16.84
UNITED Niu Technologies $2.86
BYDDF BYD Company $24.00

Li Auto (LI)

Source: Carrie Fereday/Shutterstock.com

First on this list of Chinese electric vehicle stocks to consider is Li-Auto (NASDAQ:LI), one of Nio’s strongest competitors. It’s also one of the biggest names in the Chinese EV space.

For one, Nio is bigger than Li Auto as measured by market capitalization. Nio has a market capitalization of approximately $17 billion. Meanwhile, Li Auto’s market capitalization is slightly lower, at around $16 billion.

That said, given this small size gap, it’s clear that Li Auto is a serious competitor to Nio. By evaluating vehicle sales, this truth becomes clearer.

At the end of September, Li Auto announced that it planned to deliver 25,500 vehicles in the third quarter. The company only produces SUVs, both of which are 6-seater vehicles. Basically, Li is expected to deliver around 8,500 vehicles per month in the third quarter.

Nio said it delivered 10,677 vehicles in August. 7,551 of these were SUVs/Crossovers, with sedans making up the balance.

The point here is this: Li Auto sells slightly more SUVs than Nio on a monthly basis. It doesn’t have the same brand recognition, but it has a chance to carve out a name for itself as the electric SUV of choice in China.

Niu Technologies (NIU)

Image of a Niu (NIU) storefront with a scooter showroom inside and shoppers

Source: TY Lim / Shutterstock.com

Niu Technologies (NASDAQ:UNITED)stock represents a company taking a different approach to electric vehicles than Nio. The Beijing-based company provides urban mobility solutions. In other words, electric scooters, motorcycles and electric bicycles.

One of the reasons Niu Technologies is an interesting Chinese electric vehicle company is that it’s still grappling with sales mix and pricing decisions. Sales were down 12.4% in the last quarter, falling to the USD equivalent of $114.12 million at current exchange rates.

In gross terms, these revenues are well below the $1.536 billion that Nio posted in the second quarter. It is therefore difficult to say that the two are comparable.

But here’s the catch: EV motorcycles are a bigger volume market in China than EV cars. There were 41 million electric motorcycles sold in China in 2021. In comparison, only 3.6 million electric cars were sold in China up to August this year.

This is not an apples-to-apples comparison, of course. But NIU stock has significant upside potential due to China’s huge EV market. This is reflected in his stock, which has 20X potential, based on his target price.

BYD (BYDDF)

BYD Company Limited logo in front of their website.  BYDDY stock.

Source: T. Schneider / Shutterstock

Rounding out this list of Chinese electric vehicle actions targeting Nio is BYD (OTCMKTS:BYDDF). A massive and diverse Chinese company that produces electric vehicles and many other products, BYD is best known as Warren Buffett’s holding company. Indeed, any stock that Buffett clings to is one that investors should pay attention to.

The company is broadly divided into four operating segments; automotive, rail transport, renewable energies and electronics. Interestingly, BYD employs over 288,000 people in these industries.

Its range of vehicles is relatively similar to that of Nio. BYD has three electric vehicles – a small SUV called the Atto 3, a sedan called the Han and a large SUV called the Tang. All three BYD vehicles are powered by the company’s BYD Balde Battery platform.

The BYD name may not have the same cache as Nio. However, what it lacks in recognition it makes up for in sales volume. This is because BYD sells far more vehicles than Nio. In September alone, BYD sold more than 200,000 of its electric vehicles. That figure represented a 187% year-over-year increase and 26,996 more vehicles sold than in August.

BYD stock is currently trading above $21 and carries a price target of $40. It’s not a pure EV company like Nio, which might explain why it’s lesser known. But BYD is selling far more vehicles and could be the big market share winner when all is said and done.

At the date of publication, Alex Sirois did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Alex Sirois is an Independent InvestorPlace Contributor whose personal equity investing style focuses on long-term stock picks, buy-and-hold, and wealth building. Having worked in multiple e-commerce industries to translation to education and using his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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