Chinese electric automakers see boost from post-COVID optimism, good metrics
Yahoo Finance Live anchors discuss what’s driving investor sentiment in Chinese electric automakers.
Video Transcript
BRIAN SOZZI: Chinese EV makers are seeing a charge this morning, charged up by strong sales numbers from Li Auto, as post-lockdown demand is set to keep things upbeat. Tax exemptions and subsidies from the Chinese government are also providing more tailwinds for the companies. And Julie, really interesting moves here in the pre-market because these sales came out later last week. I would argue that a lot of these moves, we are seeing Li Auto, NIO, Xpeng here, really, more related to just the opening of the Chinese economy. Not fully, but it's happening very slowly, and investors are pricing this stuff in.
JULIE HYMAN: Yeah, investors trying to figure out how quickly we're going to see a snapback in activity there. We're also seeing gains in shares of stocks like Alibaba, Pinduoduo. But basically, most of the Chinese stocks that trade here in the United States are seeing a lift this morning, especially the growth stocks, right? And there's a couple of things going on. There is, indeed, that slow reopening and the reassessment of how quickly, particularly the consumer-facing names, are going to come back.
And then there are also some reports about, again, a closing of the phase of regulatory crackdown in China. The "Wall Street Journal" reporting on that with regard to Didi in particular this morning. So Didi shares have also been gaining where they trade, right, since we have the delisting that is in progress here in the United States. So, all of that sort of lending to optimism for the moment. As we know, things can change quickly in terms of whether we would have, hopefully, not shutdowns again there. But that seems to be what's going on here this morning, guys.
BRAD SMITH: Yeah, mitigating shutdown is one thing. But I think another thing here, too, it still comes back to the chips as well that they've talked about in recent conference calls and earnings calls, particularly the challenges of the growing chip supply volatility, raw materials, those costs increasing. And then you get back to production as well. And so for Didi-- and that was NIO specifically that had brought that up in one of their most recent earnings periods. That still continues to be a headwind for this broader electric vehicle space, too.
BRIAN SOZZI: Yeah, I do want to caution, though. You look at some of these moves, and NIO, over the past five sessions, up about 12%, Xpeng up about 6% or so. They're starting to price in, I would say, a strong bounceback in Chinese activity, economic activity. We have not seen that yet in the data.
