Chinese electric vehicle stocks NIO Inc (NYSE:NIO), XPeng Inc (NYSE:XPEV) and Li Auto Inc (NASDAQ:LI) shares are trading higher on Monday as reports suggest China’s scrappage program has the potential to boost demand for electric vehicles.
Bloomberg reports that the program could result in total sales of over 10 million electric vehicles by 2024.
In July, China announced plans to introduce incentives that would allow consumers to pay 20,000 yuan ($2,760) to scrap an old car with higher emissions for an electric car or 15,000 yuan for a more fuel-efficient gasoline car.
Many cities followed suit and introduced additional incentives of $140 to $1,400 per vehicle.
According to Bloomberg, BNEF analyst Siyi Mi expects the Chinese government’s increased subsidies to boost auto sales by as much as 2 million cars, including 1.1 million electric vehicles sold, generating revenue of $26 billion.
Nio delivered 20,498 vehicles in July, flat year-on-year after electric car makers started offering attractive discounts to boost their market share. Li Auto delivered 51,000 vehicles in July, up 49.4% year-on-year. XPeng delivered 11,145 vehicles, up 1% year-on-year. China is also reportedly planning to ban Chinese software in autonomous and connected vehicles, which is a blow to the companies.
Nio shares have plunged 64%, XPeng 58% and Li Auto over 48% over the past 12 months as they have struggled with a domestic price war and protectionist tariffs from the US and EU.
NIO Stock Forecast for 2024
Stock analysis can be a valuable source of information to learn more about a company’s fundamentals. Analysts create financial models based on a company’s fundamentals and expected future earnings to determine a price target and recommendation for the stock.
The average price target for NIO shares over the 1-year period is $6.8, which corresponds to an expected upside potential of 67.9%.
Based on different assumptions, analysts can arrive at very different price targets and recommendations. No analyst has a bearish recommendation for NIO, while one analyst has an optimistic view. Citigroup’s highest price target is $8.5, while B of A Securities’ lowest is $5.9.
Price promotions: NIO shares were trading 2.55% lower at $4.05 at last check on Monday. XPEV is up 1.80 to $7.07 and LI is up 3.19% to $21.19.
Photos via Shutterstock
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This article What’s happening Monday with Chinese EV stocks Nio, XPeng and Li Auto? originally appeared on Benzinga.com
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