This morning, reports have emerged that Chinese automakers NIO (NYSE: NIO) and Xpeng (NYSE: XPEV) took roughly six years to produce a total of 100,000 cars since the company’s were first founded. In contrast, U.S.-owned Tesla (NASDAQ: TSLA) took 12 years to make the same amount of vehicles.
In a bid to win the electric vehicle race, NIO and Xpeng have ramped up production volumes, skating off shortages of semiconductors. As Tesla attempts to win over the Chinese non-gas-powered car market, investors might be comparing the manufactures and wondering which EV stock is a better investment right now.
Which stock should I buy, Tesla, Xpeng, or NIO?
Today, Xpeng stated that it has produced 100,000 cars, a target it has reached just six years after the company launched. Its competitor NIO hit this milestone back in April. While NIO was founded in 2014 under a different name — it only became NIO in 2017 — it took the company around 7 years to reach the target.
As mentioned above, Tesla took 12 years so shareholders might be wondering why it took so long compared to its Chinese rivals?
One factor could be Tesla’s high standard technology. Tesla really set the stage for EV production and put a lot of research and development into making its models. With a lot of the groundwork already uncovered, newer EV companies had a good basis, and examples of vehicles, to allow them to hit the ground running.
Also, China is known to be a manufacturing hub. The country prides itself on efficiency and lower manufacturing costs. Coupled with a massive workforce pool to choose from, it does make sense why Xpeng and NIO were able to scale up production times faster than Tesla.
Is Tesla stock a buy?
Don’t be fooled though, Tesla is still in another league. It has the technology, staff, and growing factories that are set to ramp up production volumes in 2022. The electric carmaker has hit the 1 millionth car mark over a year ago in March 2020.
In the third quarter, Tesla raced past its rivals to report record-breaking sales. During a time when its competitors struggled with supply chain issues and the global chip shortage, the company reported 241,300 sales in the third quarter, boosted by the popularity of its newer Model 3 sedan and Model Y crossover. Deliveries soared, up 20% from the previous quarter and up a whopping 73% from the same period last year.
These impressive results suggest that Tesla is the major player in the EV game. However, it has to be said that NIO and Xpeng have reached a great milestone early on in their journeys. Investors looking to diversify their portfolios with international EV stocks would be wise to keep an eye on how these companies perform as the race to become the leading manufacturer in the green-powered vehicle market is kicked into fifth gear.
With Tesla’s new gigafactory in Berlin launching over the weekend, this stock is set for further gains in the future as it steps up to dominate the European sector.
Over the past year, Tesla stock has gained almost 78%, while NIO has jumped 64%, and Xpeng has increased almost 90%. All in all, they are all looking like solid EV investment options.
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Financial Writer at MyWallSt
Nicole's favorite stock is Etsy because she loves its original and handmade items. She believes people are going to stop buying mass-produced items and start purchasing ‘one of a kind’ fashions and furnishings. In a world of sameness, Etsy has the advantage.