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Are These 3 Electric Car Stocks Still Worth Buying? Analyst Weighs In

Electric cars are growing in popularity, a trend fueled by social acceptance, the green mentality, and a recognition that the internal combustion engine does have its flaws. Some of those flaws are addressed by electric vehicles (EVs). They bring lower emissions, less pollution from the car, and the promise of high performance off the mark. For the present, 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 issues, and the government is actively pushing EVs as a possible ameliorating factor. In addition, EVs, with their quick acceleration and (usually) short range, are a ready fit with China’s crowded – and growing – urban centers. In a comprehensive review of the Chinese EV sector, Jefferies analyst Alexious Lee noted, “We are constructive on the outlook for NEV in China as the country pushes forward with the ‘electrification to digitalization’ trend. While global automakers’ JVs are quickly rolling out new models of energy saving vehicles (HEVs and PHEVs) to comply with the top-down target to reduce annual Corporate Average Fuel Consumption (CAFC), Chinese automakers (both legacy and startups) are motivated to quickly accelerate the adoption of BEV with entry-level, city commuting models and premium-positioned advanced models.” Against this backdrop, Lee has picked out one Chinese EV stock that is worth owning, and two that investors should avoid for now. We used TipRanks’ database to find out what other Wall Street analysts have to say about the prospects of these three. Li Auto (LI) Chinese EV company Li Auto boasts of having the country’s single best-selling model of electric vehicle. The Li ONE sold 3,700 units this past October, bringing the total number sold in the first year of production to 22,000. At current sales and production rates, Li expects the company to double its annual sales number this year. That’s a big deal, in the world’s largest electric car market. China produces more than half of all EVs sold globally, and nearly all of the electric busses. Li Auto, founded in 2015, has focused on plug-in hybrids – models which can plug into a charging station to maintain the battery, but also have a combustion engine to compensate for low-density charging networks. The Li ONE is a full-size SUV hybrid electric that has rapidly found popularity in its market. Li Auto went public on the NASDAQ in July of 2020. In the IPO, the company started with a share price of $11.50, and closed the first day with a gain of 40%. In the months since, LI has appreciated 116%. Those share gains come as the company reported strong earnings. In 3Q20, the last quarter reported, LI showed US$363 million in sales, up 28% sequentially, and forming the…