The persistently high interest rate environment has affected the ability of consumers to pay for cars, consequently affecting sales of EVs (electric vehicles) in 2023. This has led industry titan Tesla (NASDAQ:TSLA) to cut its prices to boost volumes. As this sector may continue to face macro challenges in 2024, Wall Street analysts are either sidelined or cautiously optimistic about EV stocks. However, TipRanks’ Stock Comparison shows that analysts favor these two Chinese EV stocks: Li Auto (NASDAQ:LI) and Nio (NYSE:NO).
With analysts bullish on LI and NIO shares, their average price target suggests significant upside potential.
What is the Prognosis for Li Auto?
Li Auto’s shares have gained about 63% year to date. The remarkable rise in LI stock reflects its strong delivery numbers, growing revenues and focus on improving efficiency and lowering costs. Additionally, the introduction of Mega, its all-electric vehicle, which has an impressive driving range of 500 kilometers, contributed to the upward trajectory of its share price.
The company delivered 41,030 vehicles in November, marking a remarkable growth of approximately 173% year on year. In addition, the cumulative year-to-date deliveries exceeded expectations, reaching 325,677 cars and surpassing the 2023 target of 300,000 ahead of schedule. With Li Auto consistently achieving robust delivery figures, analysts see great upside potential in its stock over the next 12 months.
Four analysts cover LI stock, and all recommend a Buy. Further, the average LI stock price target of $53.75 suggests that it has the potential to increase by 61.9% from current levels.
Is Nio Stock Expected to Go Up?
Nio stock has underperformed the broader markets, losing about 14% of value year to date. Increased competition led by Tesla’s aggressive pricing strategy and macro headwinds have impacted Nio’s margins and share price.
However, Nio’s focus on driving profit, production increases, efforts to expand its cooperation in battery exchange and growing sales of NT2 products, which command higher average selling prices, are likely to increase its margins significantly.
This is reflected in analysts’ bullish outlook on NIO. With seven Buys and two Recommendations, NIO has a consensus rating of Strong Buy. Further, the average LI stock price target of $11.36 suggests that it has the potential to rise by 34.9% from current levels.
Bottom Line
While Tesla maintains its leadership in the EV segment, its stock has more than doubled in 2023, keeping analysts on edge. On the contrary, the improving delivery numbers and margins of Li Auto and Nio keep analysts bullish on their prospects. Also, LI and NIO shares offer notable upside potential based on analysts’ average price target.
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.