There is a crazy amount of investors out there buying shares of EV manufacturers like Tesla (TSLA) and Li Auto (LI), or NIO (NIO). In any case, there are few concepts that market participants need to get to know before making an investment. In this article, I will try to summarize different features that you must get to know about your favourite electric vehicle manufacturer.
Tip Number 1: Get To Know The Location Of Clients
In my opinion, this is one of the most relevant tips when we assess EV producers. More in detail, if your manufacturer is located in China, you are lucky. China is investing a significant amount of money in the EV industry. The Government of China wants EV manufacturers to sell more and more cars in the future. It has created specific funds to finance the development of the industry. Hence, manufacturers in China like NIO, NIU, or Li Auto are expecting to profit from subsidies. We don’t know whether the European Union or the United States will do the same thing. Until that happens, I recommend looking at Chinese producers.
Tip Number 2: Understand The Number Of Cars To Be Delivered
The amount of cars to be delivered is more relevant than the number of EVs delivered. You need to get to know whether the company is increasing the numbers of cars manufactured or not. There are companies out there, like NIO or Li Auto, which expect sales growth of more than 80%-100%. They are currently building their factories, and investing billions of dollars in capital expenditures. These types of new manufacturers will have a larger valuation than old companies like Tesla (TSLA) or BYD Company (BYDDF). Don’t get me wrong. Analysts will be looking at the number of cars NIO will deliver in the future because NIO will grow quite a bit. BYD will not grow its sales that much, so investors will be focusing on the cars to be delivered this year or in the next three years. To sump up, this is finance; look at what’s about to happen, and forget about the past.
Tip Number 3: Learn About Their Artificial Intelligence Technology
NIO, NIU (NIU), Tesla, and Li Auto are adding AI features, which help drivers find places, or provide information about the status of the battery. Besides, some EVs and electric scooters can also connect to the driver’s smartphones, have self-driving systems, and provide details about the location of the vehicles. EV companies are signing agreements with tech companies like Nvidia or Intel, which you need to get to know.
Mobileye, an Intel company, and NIO, a pioneer in China’s premium electric vehicle market, are engaging in a strategic collaboration on the development of highly automated and autonomous vehicles (AV) for consumer markets in China and other major territories. As part of the planned cooperation, NIO will engineer and manufacture a self-driving system designed by Mobileye, building on its Level 4 (L4) AV kit. This self-driving system would be the first of its kind, targeting consumer autonomy and engineered for automotive qualification standards, quality, cost and scale. Source
The amount of artificial intelligence technology included in the electric vehicles is extremely relevant. Some analysts out there believe that EV stocks are not automotive stocks, but tech stocks. The expected valuation of these companies is larger if they are valued as tech stocks. Hence, study closely the features offered by EV manufacturers. Your stocks will fly higher if they offer AI capabilities.
Disclosure: We Don’t Hold NIO, TSLA, NIU, NVIDIA, INTEL, or LI shares.