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All eyes are on the stocks of NIO after the stocks of electric vehicles rising in the market

Summary

Electric vehicle stocks have had an outstanding performance this year in the stock market. For example, KraneShares Electric Vehicle and Future Mobility ETF’s stocks rose by close to 45 percent. This excellent performance had spilled over the past weeks, even […]

Electric vehicle stocks have had an outstanding performance this year in the stock market. For example, KraneShares Electric Vehicle and Future Mobility ETF’s stocks rose by close to 45 percent. This excellent performance had spilled over the past weeks, even when other stocks were plummeting. The performance of the leading stocks in the electric vehicle industry has been exciting to watch since they grow through the pandemic. Shares of mega-companies in the industry like NIO and Tesla have been surging throughout the year and compelling more investors to cash their investment.

The impending inclusion of Tesla into the S&P 500 will raise this agency’s stock value, stimulating growth, and technological advancement. NIO reported its highest value this Friday, but the value slowly came down with a 20% reduction raising eyebrows over what was happening in the company. NIO and Tesla’s high stakes are evidence of the efficient management and leadership in the companies resulting in the fulfillment of its objectives and goals. Nevertheless, the other factors accelerating growth in these companies include the transition to clean electric vehicles, government intervention in the uptake of electric vehicles through incentives and subsidies, and technological advancement spurring electric vehicles’ uptake over the ICE cars.

These profitable electric vehicle industry trends have attracted investor attention towards the emerging and growing companies like Li Auto and Xpeng. These companies can head in the same direction as the electric vehicle giants if they implement their visions and meet customers’ demands. However, investors are skeptical about investing in these companies for fear that there are underlying problems that can pop up once they make their investments. Experience has shown that the valuation tools have become irrelevant to the ever-changing market variables.

Nevertheless, the electric vehicle industry is the right place to invest in since companies are expanding and scaling up operations to widen the profit base. Enthusiastic investors have discovered the right investments to risk their cash and witness unparalleled profits in the future.

These companies are suitable investment alternatives disregarding the factors that investors are looking at, like the management’s characteristics, advancement in the electrical technology for the vehicles, and government support for these projects. A concise analysis of these factors will prove that the electric vehicle industry is more profitable than any other industry in the long run.

XPEV jumped 33% last week after its earnings report topped expectations. The report’s major highlights were revenues quadrupling, deliveries increasing by 265%, and gross margins becoming positive. These are positive signs that the company is scaling production, lowering per-unit costs, and gaining traction with customers.

The best illustration is Xpeng stocks, which tripled their value in the market after the company expanded its operations, minimized production costs, and educated customers concerning their products through promotions. Additionally, the Chinese government declared that it would develop the electric vehicle charging infrastructure to accelerate the transport industry’s transition to clean energy. Finally, NIO has sold over 10000 electric vehicles in a short time. The growing competition from other companies has made NIO expand its operations to other countries and scale up production.

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