Why shares of EV stocks Nio, Li Auto and XPeng are soaring higher today

The markets seem ready to end the week on a high note S&P500 And Dow Jones Industrial Average is rising after a tough trading session yesterday.

But several electric vehicle (EV) Stock prices are significantly higher today as investors believe Chinese EV makers could be ready to make a bigger push into the market with more affordable models.

investors step on the accelerator on shares of Nio (NYSE: NIO), Li Auto (NASDAQ: LI)And XPeng (NYSE: XPEV). As of 12:22 PM ET on Friday, shares of Nio were up 8.8%, while shares of Li Auto and XPeng were up 6.6% and 10.5%, respectively.

Driving in a new direction

Speaking to CNBC yesterday, executives at Nio and XPeng both said they are committed to offering more moderately priced vehicles by 2024. Nio CEO William Li specifically told the cable network that the company will offer an SUV that is cheaper than Tesla's Model Y.

According to co-president Brian Gu, XPeng expects to debut its more fuel-efficient Mona in the coming months.

Nio's comments will come as no surprise to those who follow the company closely. On the recent one conference call for the fourth quarter of 2023, Li referred to the more family-oriented model that will be launched in the second half of the year. Becoming optimistic, Li said:

“[The new model] is aimed at the mass market and also at family-oriented users, where competition is also fiercer. But fortunately, it can leverage the existing electrification and smart technologies and infrastructures that Nio has already developed. So it has certain advantages than starting a completely new brand from scratch. For this second brand we will focus more on volume.”

Similarly, XPeng also sees the launch of the Mona as a promising opportunity. During Xpeng's fourth-quarter 2023 conference call, James Wu, vice president for finance and accounting, expressed belief that XPeng's partnership with transportation company DiDi will be beneficial.

It appears investors are bidding Li Auto higher out of sympathy for Nio and Peng, whose apparent recognition of the market for more moderately priced vehicles has likely made investors optimistic that Li Auto will also benefit from growing demand for its flagship family SUV.

Is Now the Time to Strengthen Your Portfolio with These EV Stocks?

While many investors may interpret Nio and XPeng's news as a green light to buy the stock, both companies' new approaches should be taken with some grains of salt. The two companies have both managed to grow revenue, but have also suffered increasing net losses.

NIO turnover (annual) graphNIO turnover (annual) graph

NIO turnover (annual) graph

Unless investors are comfortable with a fair amount of risk, this doesn't seem like the best time to hit the buy buttons on Nio and XPeng. However, Li Auto has generated positive net income over the past four quarters, suggesting it could be a better fit for EV investors looking to reduce risk.

Should You Invest $1,000 in Nio Now?

Before you buy shares in Nio, consider the following:

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Think about when Nvidia made this list on April 15, 2005… if you had $1,000 invested at the time of our recommendation, you would have $506,291!*

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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has and recommends positions in Nio and Tesla. The Motley Fool has one disclosure policy.

Why shares of EV stocks Nio, Li Auto and XPeng are soaring higher today was originally published by The Motley Fool

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