Insights

Nio, Xpeng, Li Auto thrive on products and ecosystems, but fierce competition requires significant investment to stay competitive, according to Fitch.

Deutsche Bank maintains a Hold rating on Li Auto and a $34 price target, implying a 14.8 percent upside.

CITIC Securities believes that Nio, Xpeng, and Li Auto are in an accelerated period of improving profitability and are expected to approach the break-even point in the coming year.

Barclays gives Nio a price target of $34, Xpeng $45 and Li Auto $38.

This means the team sees Xpeng outperforming the overall market by 10-20 percent within the next six months.

Deutsche Bank analyst Edison Yu's team sees three ways Chinese EV stocks could potentially come out of this slump.

The team said Nio is a first mover in the premium electric vehicle market and is bullish on its potential for intelligence and the expansion of its user base with lower-priced products.

CITIC Securities expects energy replenishment to remain primarily charging, supplemented by battery swap, over the next five years, but the latter's adoption will accelerate significantly.

Xpeng is expected to be included in the Hong Kong-Mainland Stock Connect around February 11, while Li Auto is expected to see this happen around March 14, CITIC Securities said.

HSBC's price target increase is not due to a change in their expectations for Nio's sales or valuation, but rather due to changes in exchange rates.