In late 2020, the bubble in electric vehicle stocks popped. Markets tried but failed, to send EV stocks higher in Feb. But the Nasdaq corrected badly, ending that rally.
Two EV stocks are on the rise, erasing much of their losses in the last month. XPeng bottomed at $25 and closed at $45 last week. Nio, whose market capitalization is around twice the size, also recovered.
Investors piled on XPEV (NYSE:XPEV) and Nio (NYSE:NIO) stock after both companies posted solid delivery figures. In May, XPeng posted a five-fold increase in smart EV deliveries, at 5,686 units. Most of its deliveries were P7s. XPILOT 3.0, launched in January, has strong customer utilization rates. Expect XPeng to post growing subscription revenues as a result. Gross margins will expand as unit sales increase. Eventually, XPeng will post operating profits, which will lift the stock to new highs.
Nio posted a 95.3% Y/Y increase in deliveries, to 5,611 units. It delivered 3,017 ES6s, its five-seater smart electric SUV. It delivered 1,412 ES8s in the month. Semiconductor parts shortages will hurt shipments. Still, once the disruptions ease, sales will grow.
Chances are good that Nio stock will trade and stay in the $50 - $60 range next.
