Heard on the Street: Chinese electric-vehicle stocks are hot. Actual EV sales in China—not so much.
By Jacky Wong Close Jacky Wong July 20, 2020 7:18 am ET The Tesla TSLA 9.47% frenzy is supercharging shares of Chinese electric-vehicle makers as well. The question is how long that will last—and if there is really enough high-end EV demand to go around.
Bubbly Tesla shares have, unsurprisingly, helped light a fire under the broader Chinese EV sector as well. Nasdaq-listed Nio has gained 175% this year and hit a record high last week. That is despite the fact that as recently as the beginning of 2020, the company was scrambling for cash, before it received a financial lifeline from state investors. Nio’s Alibaba-backed rival, Xpeng Motors, said Monday it has raised nearly $500 million from investors including Sequoia Capital.
EVs still cost too much for mass adoption, especially after the Chinese government slashed subsidies last year. A big part of EV demand comes from corporate and government fleets; individual buyers are concentrated in the large cities and may be buying a Tesla for the cool factor. Another problem is the lack of charging facilities. The government hopes to work on this bottleneck in its latest infrastructure push.
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