The COVID-19 pandemic has accelerated the adoption of technology in the auto industry. Governments, such as those of China, France, Italy, are using electric vehicle subsidies to stimulate the economy and build a more sustainable world. Legacy car makers, like General Motors and Daimler, are investing lavishly in related projects. In this report, we comprehensively analyze China's automotive industry and indicate the main investment opportunities appearing within the sector.
- NIO, Li Auto and Xpeng are taking sizable losses, but are still highly valued by the markets
- Legacy automakers have been suffering, with their stocks delivering low returns
- Tesla's market dominance has made global incumbents join the game
- We are rather optimistic about China's New Energy Vehicle (NEV) market, which is hugely driven by government support, improving infrastructure and the rise of local Chinese brands
- China's dominance in the EV segment is continuing: to date, ~1.2 million EVs, or 57% of global sales, have occured in the country