The 2 Worst Performing Chinese Electric Vehicle Stocks YTD

: NIO | NIO Inc. ADR News, Ratings, and Charts

NIO – The Chinese electric vehicle (EV) industry saw a rocketing rally last year. But the absence of requisite financial strength and product pipelines are lately causing a pullback by many of these stocks. NIO Limited (NIO) and XPeng Inc. (XPEV) are two of the worst performing stocks in this space so far this year. And, given the weakness in their financials, we think they are best avoided now.

China-based electric vehicles (EV) manufacturers account for most global EV deliveries. In fact, the 1.3 million EVs sold in China in 2020 represented 41% of global EV sales. However, the EV boom has given rise to many EV start-ups in the country that have yet to develop production capacity to capitalize on the growing demand. And existing players are facing stiff competition in maintaining  their market share.

As a result, investors have become concerned about  the current valuations of Chinese EV stocks. And the stocks that have skyrocketed in the absence of sufficient fundamental strength based solely on investors’ optimism have been experiencing  a major sell-off this year.

Furthermore, a current global semiconductor shortage has led many automakers to halt their production. This represents another investor concern. NIO Limited (NIO - Get Rating) and XPeng Inc. (XPEV - Get Rating) have retreated significantly this year, and it’s a trend that may not reverse anytime soon. So, we think it  wise to avoid these two stocks now.

Click here to checkout our Electric Vehicle Industry Report for 2021

NIO Limited (NIO - Get Rating)

Based in China, NIO designs, jointly manufactures, and sells smart premium electric vehicles, driving innovations in next-generation technologies in connectivity, autonomous driving, and artificial intelligence. The company provides users with comprehensive and convenient power solutions including Battery as a Service (BaaS), NIO Pilot and NIO Autonomous Driving (NAD), Autonomous Driving as a Service (ADaaS) and other user-centric services.

On March 26, NIO decided to  temporarily suspend its  vehicle production  in its  JAC-NIO manufacturing plant in Hefei for several working days due to a semiconductor shortage. The overall semiconductor supply constraint   impacted the company’s production this month.  Consequently,  NIO has also lowered its vehicle delivery outlook for the first quarter.

NIO’s total revenues have  increased 46.7% sequentially to $1.02 billion in the fourth quarter ended December 31. However, its top-line growth has not  translated into profits. Its net loss has increased 32.4% from the previous quarter to $212.82 million, while its loss per share has risen 7.1% to $0.16.

Analysts expect NIO to report a loss per share of $0.15 in the current quarter ending March 31, 2021. The stock has lost 23% year-to-date and is currently trading at 11 times its sales, 776.8% higher than the industry average  1.25x.

NIO’s POWR Ratings are consistent with this bleak outlook. The stock has a D overall rating,  which equates to Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

NIO has a D grade for Sentiment, Value, and Quality. It is currently ranked #81 of 84 stocks in the D-rated China industry.

In total, we rate NIO on eight different levels. Beyond what we’ve stated above, we have also  given NIO grades for Momentum, Stability, and Growth. Get all of NIO’s ratings here.

XPeng Inc. (XPEV - Get Rating)

XPEV is a Chinese smart electric vehicle company that designs, develops, manufactures, and markets smart electric vehicles. The company’s primary products are a type of sport utility vehicle named G3 and four-door sports sedan named the P7. It also provides vehicle leasing, bank loans, and auto insurance services.

This month , XPEV’s subsidiary in China entered a strategic cooperation agreement with Guangdong Yuecai Investment Holdings Co., Ltd. Pursuant to the agreement, Yuecai will invest a total of RMB500 million in XPEV’s subsidiary in China to accelerate the company’s business expansion.

The company’s revenues in the fourth quarter (ended December 31, 2020) were $436.99 million, surging 345.5% year-over-year. However, XPEV is still unprofitable and reported a loss of $171.83 million.

Analysts expect XPEV to report a loss per share of $0.15 in the current quarter, ending March 31. The stock has lost 21% year-to-date and is currently trading 12.21 times its sales, 875.6% higher than the industry average.

XPEV’s poor prospects are apparent in its POWR Ratings also. The stock has an overall D rating,  equating to Sell in our proprietary rating system. XPEV also has a D grade for Quality, Stability, and Value. In the Auto & Vehicle Manufacturers industry, the stock is ranked #44 of 51 stocks.

Click here to see the additional POWR Ratings for XPEV (Momentum, Growth, and Sentiment).

The POWR Ratings are calculated by considering 118 different factors with each factor weighted to an optimal degree.

Click here to checkout our Electric Vehicle Industry Report for 2021

Want More Great Investing Ideas?

“MUST OWN” Growth Stocks for 2021

How to Ride the NEW Stock Bubble?

5 WINNING Stocks Chart Patterns

Unlock the POWR in Your Portfolio!


NIO shares were trading at $38.44 per share on Wednesday afternoon, up $0.89 (+2.37%). Year-to-date, NIO has declined -21.13%, versus a 6.76% rise in the benchmark S&P 500 index during the same period.


About the Author: Rishab Dugar


Rishab is a financial journalist and investment analyst. His investment approach is to focus on quality stocks, trading at low prices, with business models that he readily understands. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
NIOGet RatingGet RatingGet Rating
XPEVGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Stock Market Update: It’s Complicated!

The S&P 500 (SPY) may have bounced 17% from recent lows, but the outlook for stocks from here is...in a word...COMPLICATED. Read on to get Steve Reitmeister full market outlook and trading plan for this complicated market environment.

Becoming More Bullish on Stocks, But...

Stocks are on a roll with the S&P 500 (SPY) up more than 10% from the recent lows. Before you start getting too giddy, you should read this updated market outlook and trading plan Steve Reitmeister.

Stock Market Held Hostage

Uncertainty is the term most often applied to this stock market. Uncertainty over tariffs. Uncertainty of whether the S&P 500 (SPY) will fall into bear territory. Uncertainty over what happens next. Steve Reitmeister dives into the uncertainty to make sense of the market in this week’s commentary...

Stock Market Standing on the 50 Yard Line

Steve Reitmeister contemplates where the stock market stands now and what happens next in trying to stay on the right side of the market action. One path points to bear and one to new highs for the S&P 500 (SPY). Which will it be?

Bear or Bull Market?

The S&P 500 is on the brink of bear market territory...but that outcome is not a given at this time. Steve Reitmeister shares insights gleaned from his 45 years of investing to shine a light on current conditions along with his top picks...

Read More Stories

More NIO Inc. ADR (NIO) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All NIO News