Pricing was recently posted for the Chinese-made Model Y. It is somewhat cheaper than the competition. This is good news for Tesla bulls, but it can be bad news for the competition.
Tesla (ticker: TSLA) is selling the Model Y manufactured in Shanghai at a base price of 339,000 yuan, or about $ 52,000. Low Price
(NIO) EC6 crossover vehicles start at 368,000 yuan.
(XPEV) G3 starts for less money, but is a low-performance vehicle. The G3 lists its time from 0 mph to 60 mph at about 9 seconds. A comparable Model Y gained speed in about five seconds.
(LI) Lee One SUV starts at around 328,000 yuan. “With Lee One, we want to … be the top-selling model in your price segment [the 300,000 to 350,000 Yuan] Price segment, ”Lee Auto President Kevin Shane said on the companies’ recent earnings conference call.
Tesla, for its part, has been able to cut costs as it speeds up local production in China. Tesla’s Chief Financial Officer Zachary Kirkhorn said recently of the company, “We are also seeing the benefit of locally manufactured and delivered cars, which increased from 50% to 70% at the beginning of last year . ” Third-Quarter Income Conference All.
The Chinese-made Model Y was approved for sale in China in late November. Tesla also manufactures Model 3 sedans in China.
CEO Elon Musk recently said that it is important to continue reducing vehicle prices. “I don’t think our product is lacking in desire, but we are lacking in strength,” Musk said in a recent conference call.
Price cuts and competition have not hurt EV stock. Shares of XPeng, NIO and Li Auto- along with Tesla produced incredible returns in 2020. NIO stock, for example, climbed roughly 1,110%, giving Tesla a huge gain of 743%.
Despite the competition and the share price performance, Chinese EV stocks are still popular with analysts. Analysts covering all three companies buy more than 60% of the shares. The average buy-rating ratio at the Dow is around 57%.
Baron’s Is more cautious, recently writing that valuations among Chinese EV producers are very high, while suggesting that investors take advantage. This article appeared in mid-December.
XPeng has an estimated 2021 sales around 2021. The NIO and Li Auto business generated approximately 15 times and 8 times estimated 2021 sales. Tesla, for comparison, trades for about 14.5 times 2021 sales.
Three Chinese EV producers are expected to report delivery numbers in early 2021.
Write Al Root at [email protected]