XPeng (NYSE: XPEV) was based in 2014 and went public in August 2020, its inventory value rising over 85% since then. Nio (NYSE: NIO) was based in November 2014 and went public in September 2018, its inventory value hovering over 288% since. In an effort to scale back greenhouse fuel emissions, the Chinese language authorities has been subsidizing EV corporations and startups and each corporations have benefitted. Nonetheless, each haven’t been with out controversy both; working the gamut from company espionage to unsafe autonomous automobiles to utilizing compelled labor. In gentle of this, we ask which is the higher funding: XPeng or Nio?
XPeng: bulls and bears
As per the corporate’s newest quarterly earnings report (Q3 2021), XPeng is firing on all cylinders with deliveries up practically 200%, income rising by 187%, and gross margin hovering over 213%, year-over-year (YoY). The corporate additionally has over $7 billion in money and equivalents, permitting it a protracted runway for development and enlargement. For the upcoming fourth quarter, XPeng expects a YoY enhance of roughly 170% in deliveries and a 155% enhance in income.
Lately, the corporate secured the best quantity of funding within the low-altitude flying automobile sector ($500 million) for its upcoming flying automobile (sure, lastly, a flying automotive!). To broaden manufacturing capability and improve provide chain administration, XPeng is opening a 3rd manufacturing unit in Wuhan, which is able to produce 100,000 automobiles yearly. And the corporate is making headways into the European market (the second-largest EV market on the planet), having bought 486 EVs there final yr.
The extremely aggressive EV market conjures up unscrupulous habits and XPeng is just not immune. In actual fact, the corporate is accused of stealing from not solely Tesla however Apple as properly to additional its personal autonomous automobile (AV) ambitions. It prevented critical repercussions, however who’s to say it received’t occur once more and be damaging this time. Additionally, paradoxically, lithium mining requires 2 million liters of water for each ton of lithium.
Nio: bulls and bears
In response to Nio’s final quarterly earnings report (Q3 2021), automobile deliveries grew over 100%, income was up 117%, and gross margin climbed over 57%, YoY. Like XPeng, the corporate additionally has over $7 billion in money and equivalents. For the upcoming fourth quarter of 2021, Nio expects deliveries to develop 40% and income to climb 46%, YoY.
The corporate has three fashions at the moment in manufacturing and a fourth to make its debut this yr. Its gross sales development has been constant throughout all three fashions indicating excessive demand for the model. Moreover, Nio is at the moment underpriced primarily based on its income development and price-to-sales a number of.
Earlier than launching its IPO, Nio advised traders that it was constructing a brand new manufacturing unit in Shanghai-a whole fabrication. Final yr, a 31-year-old man died when his NIO crashed in self-drive mode. And at last, the corporate has been recognized as being related to compelled Uyghur labor in Xinjiang.
Which inventory is a greater funding proper now?
Each are good investments however I really feel XPeng has the sting with its enlargement into the European market.