Shares of several electric vehicle companies including Tesla (TSLA) and NIO (NIO) surged in 2020 thanks to optimism surrounding the future of the industry.
The biggest EV automaker, Tesla, as well as the Chinese firms NIO (NIO), Li Au (LI), and X PENG (XPEV) beat analysts’ estimates for deliveries and spiked in the first trading day of 2021.
China is strongly supporting the industry through subsidies, looser regulation, and its goal to achieve net zero carbon emissions by 2060. The ramp up of electric vehicle adoption in combination with China’s strong economic position should only help the burgeoning market.
However, Chinese automakers still have a long way to go to catch up to Tesla. Tesla's sales are 5X of the three aforementioned automakers combined in 2020.
Tesla has identified the opportunity in China and is penetrating the market by opening a factory in Shanghai, China in 2019 and more recently planning to deliver a China-made Model Y with a 30% price cut (339,000 yuan) to what was previously announced.