Chinese electric vehicle stocks NIO Inc (NYSE:NIO), XPeng Inc (NYSE:XPEV), ZEEKR Intelligent Technology Holding (NYSE:ZK), and Li Auto Inc (NASDAQ:LI) maintained their upward stock price trajectory Friday since China shared plans to cut its key rates to spur discretionary spending.
On Tuesday, China's central bank shared plans to cut banks' reserve requirement ratio (RRR) by 50 basis points or half a percentage point. The central bank also looks to slash the seven-day reverse repurchase rate to 1.5% from 1.7%.
Chinese EV stocks are down 27%—35% as the industry grapples with soft domestic demand, leading to a price war. EU and US protectionist tariffs pose additional headwinds.
The sector also bore the brunt of the US semiconductor sanctions on China, as artificial intelligence technology plays a vital role in the automobile sector.
Reuters cited China's commerce ministry as saying that China initiated an anti-discriminatory investigation against Canada's additional tariffs on Chinese electric vehicles and more.
The China EV sector also got a boost from Chinese hyperscalar Alibaba Group Holding's (NYSE:BABA) partnership with Nvidia Corp (NASDAQ:NVDA) to boost the autonomous driving experience for Chinese smart vehicle owners like Li Auto and more.
Alibaba's Apsara Conference showcased the e-commerce juggernaut's AI accomplishments, including Alibaba Cloud's collaboration with XPeng to enhance smart cockpit experiences.
NIO Stock Prediction For 2024
NIO's revenue growth in FY23 was 7.3%, reflecting the influence of various factors including the macroeconomic environment, demand for its products and services, and its position relative to competitors. This growth is a critical indicator for investors assessing the company's future prospects.
Some macro factors that could impact the company's performance in the next year include higher interest rates, progress on reeling in inflation and labor market strength. The Fed's benchmark rate is currently at 4.83%, while PPI recently came in at 0.2%, growing 1.7% from last year. The unemployment rate was most recently reported as 4.2%.
An investor should pay attention to economic conditions to decide whether they think the macro environment is positive or negative for NIO stock. For real time economic data and breaking market updates, check out Benzinga Pro. Try it for free.
How does this stack up against NIO's peers?
Investors may also want to analyze a stock in comparison to companies with similar products or in similar industries. NIO operates in the Consumer Discretionary sector. The stock has experienced average annual growth of -45.16% compared to the -34.99% average of its peer companies. This is below the broader sector movement of NIO.
Price Actions: NIO stock is up 4.15% at $6.02 premarket at the last check Friday. XPEV stock is up 4.20% at $12.16, ZK stock is up 2.07% at $18.70 and LI stock is up 0.04% at $25.38.
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