Electric cars are becoming increasingly popular, a trend driven by social acceptance, the green mentality and the recognition that the internal combustion engine has its shortcomings. Electric vehicles address some of these shortcomings. They bring lower emissions, less pollution from cars and the promise of high performance to the point. Currently, the main drawbacks are the high cost and relatively short range of current battery technology. Even so, many consumers have decided that the benefits outweigh the costs, and EV sales are increasing. China, in particular, has long been known for its pollution and smog problems, and the government is actively pushing for electric vehicles as a potential improvement factor. Furthermore, with their fast acceleration and (usually) short range, electric vehicles are a good fit for China’s crowded and growing urban centers. In a comprehensive review of China’s EV sector, Jefferies analyst Alexious Lee noted, “We see the outlook for NEV in China as constructive as the country advances the trend from electrification to digitization. While global automakers’ joint ventures are rapidly moving towards the Market come. ” New models of energy efficient vehicles (HEVs and PHEVs) to meet the top-down target of reducing annual average fuel consumption (CAFC). Chinese automakers (both legacy and start-ups) are motivated to accelerate the adoption of BEVs quickly as they get started. Level, city commuting models and premium-positioned advanced models. With that in mind, Lee picked one Chinese EV stock worth obsessing over and two investors should avoid for now. We used TipRanks’ database to find out what other Wall Street analysts were saying Prospects for these three say. Li Auto (LI) Chinese EV company Li Auto is proud to have the best-selling model of electric vehicle in the country, with the Li ONE selling 3,700 units last October, bringing the total to 22,000 in its first year of production. At current sales and production rates, Li expects the company to double its annual sales this year. This is a big deal in the world’s largest electric car market. China produces more than half of all electric vehicles sold in the world and almost all electric buses. Li Auto was founded in 2015 and has focused on plug-in hybrids – models that are connected to a charging station can be used to service the battery, but also have an internal combustion engine to compensate for low density charging systems. The Li ONE is a full size SUV hybrid electric that has quickly gained popularity in its market. Li Auto went public on NASDAQ in July 2020. When it went public, the company started with a share price of $ 11.50 and closed the first day with a profit of 40%. In the months since then, LI has appreciated 116%. These stock gains are due to the company posting strong gains. For the third quarter of the last quarter, LI posted sales of $ 363 million, up 28% from the previous quarter, and accounted for the lion’s share of the company’s total revenue of $ 369.8 million. Also positive was that Li sequentially increased free cash flow by 149% to $ 110.4 million. Impressed with Li Auto’s technology, Lee notes, “Li One’s EREV powertrain has proven to be a great success because of (1) extended range, (2) limited impact at low temperatures, and (3) easier acceptance by car buyers. The advantage is sustainable ahead of the battery cost parity, which is estimated at fiscal 25 (LFP) and fiscal 27 (NMC). This makes LI AUTO the car manufacturer who made OCF positive and profitable towards peers in the past. The analyst added, “LI AUTO is the first in China to successfully market Extended Range Electric Vehicles (EREV), which provide a solution to driver range anxiety and automakers’ high bill of materials. The ER system runs on fuel and offers an alternative power source in addition to battery packs. This is of paramount importance in low temperature environments where BEVs can lose up to 50% of printed yield. “With the company’s technology being the main attraction for customers and investors, Lee initiated coverage of LI with a buy rating and a target price of $ 44.50. That number implies 25% growth over the coming year. (To see Lee’s track record, click See you here) There is broad consensus with Lee on Wall Street that this stock is an offer to buy. LI stocks have a strong buy consensus rating based on 6 ratings including 5 buy and 1 hold. The shares are rated at 35.60 And the average target price of $ 44.18 is Lee’s, suggesting 24% up for the next 12 months. (See LI stock analysis on TipRanks) Nio (NIO) Wo Li Auto the best-selling EV model in China rival Nio competes with Elon Musk’s Tesla for top position in market share in the Chinese EV market, with a market capitalization of US $ 90 billion largest domestic electric car manufacturer in China. The company has a diverse range of products, including SUVs with lithium-ion batteries and a water-cooled sports car with an electric motor. Two sedans and a minivan are on the drawing boards for future release. In the meantime, Nio’s vehicles are popular. The company reported 43,728 vehicle deliveries in 2020, more than twice as many as in 2019. In the last five months of the year, car deliveries rose for five consecutive months. Deliveries in December exceeded 7,000 vehicles. Nio’s sales have grown steadily and saw significant year-over-year growth in the second and third quarters of 2020. In the second quarter the increase was 137%; in the third quarter it was 150%. In absolute terms, revenue for the third quarter was $ 654 million. However, with stocks up 1016% in the past 52 weeks, there is little room for further growth – at least according to Jefferies’ Lee. The analyst initiated coverage of NIO with a hold rating and a price target of $ 60. This number implies a modest 3% uptrend. “We use the DCF method to evaluate NOK. In our DCF model we take into account solid volume growth, a positive net profit from FY 24 and a positive FCF from FY 23. We apply a WACC of 8.1% and Assume a terminal growth rate of 5% and get to the target price of $ 60, “explained Lee. Overall, Nio has a moderate buy rating from the analyst consensus with 13 ratings, including 7 buys and 6 holds. NIO sells for $ 57.71, and recent stock gains have pushed that price just below the average target price of $ 57.79. (See Nio stock analysis on TipRanks) XPeng, Inc. (XPEV) XPeng is another company like Li in the mid-price level of the Chinese electric car market. The company has two models in production, the G3 SUV and the P7 sedan. Both are long-range EV models that can travel 500 to 700 kilometers on a single charge, and have advanced autopilot systems to assist the driver. The delivery of the G3 began in December 2018; The P7 in June 2020. In another comparison with Li Auto, XPeng also went public on the US markets in the summer of 2020. The stock was listed on the NYSE on the last day of August at a price of $ 23.10 and when it went public on the company raised $ 1.5 billion. Since going public, the stock is up 127% and the company has a market capitalization of $ 37.4 billion. Increasing sales are behind equity gains. XPeng reported 8,578 vehicles delivered in the third quarter of 2020, an increase of 265% compared to the same quarter of the previous year. The bulk of those shipments were P7 sedans – the model saw shipments jump from 325 in the second quarter to 6,210 in the third quarter. The strong revenue resulted in revenue of $ 310 million for the quarter, an impressive 342% gain. Jefferies’ Lee sees XPeng as a well-positioned company that may have reached its short-term growth. He writes: “XPENG is very much exposed to technology-driven growth. While we prefer its specialty in autonomous driving and power usage efficiency, our FY21 forecast is lower than consensus with revenue growth of 120%, while our FY22 forecast is 129% higher given slower market adoption and increased competition in the Segment Rmb200-300K. “To this end, Lee is holding a hold on XPEV and its target price of $ 54.40 suggests a slight upward movement of ~ 4%. Recent gains on XPEV have pushed the price slightly above the average price target of $ 51.25. The stock is now selling for $ 52.46. This goes hand in hand with a consensus rating for Moderate Buy analysts, which is based on 8 ratings and is split into 5 buys, 2 holds and 1 sell. (See XPEV stock analysis on TipRanks.) To find good ideas for trading EV stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the presented analyst. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.