Tesla’s march to US$1 trillion inspires bets on BYD, Xpeng, Ganfeng Lithium as China EV sector caps best run since July

Name: Luxury shopping centres open new battleground for China’s electric car makers
Uploaded: 2021-11-05T08:20:24.000Z
Duration: 2 min 52 s
Description: Luxury shopping centres open new battleground for China’s electric car makers

An index tracking top electric-car and battery makers has risen more than 14 per cent over four weeks as Tesla hits US$1 trillion in market value

China recorded a 185 per cent surge in EV sales in the first nine months this year, according to an industry association

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Elon Musk addresses the opening ceremony of the 2021 World Internet Conference Wuzhen Summit via video on September 26. Tesla reached US$1 trillion in market value on October 25. Photo: Xinhua

Zhang Shidong

Published: 4:20pm, 5 Nov 2021Updated: 9:03pm, 5 Nov 2021

Tesla’s march to US$1 trillion in market value over the past two weeks is underpinning the industry’s prospects, inspiring the best run in four months in shares of Chinese electric vehicle (EV) and battery manufacturers.

The MSCI China All Shares IMI Future Mobility Top 50 Index, which tracks EV makers, lithium-ion battery producers and other new-energy stocks, has risen 14.5 per cent in four straight weeks, the longest winning streak since early July. The index has returned almost 50 per cent this year, while the Hang Seng Index slipped 7.4 per cent.

Xpeng, NIO, Contemporary Amperex and Ganfeng Lithium have risen by 2.6 per cent to 9.4 per cent over the past week, as Elon Musk’s company in California gained more market value after surpassing the trillion-dollar milestone on October 25 during its 11-week surge.

The red-hot industry is a bright spot in an otherwise bleak economy that is fast losing its shine. Chinese EV makers and their parts suppliers ticked the boxes with strong market demand, favourable policies and friendly regulations, in stark contrast to the troubled property and technology sectors.

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Luxury shopping centres open new battleground for China’s electric car makers

“We expect the EV penetration rate to exceed 20 per cent in 2025 in China and Europe,” said Yuan Jiancong, an analyst at Citic Securities. “The momentum in the global EV market will continue in 2022 and Tesla will continue to lead the global trend of smart EVs. This trend is irreversible.”

Reports this week underlined that optimism with bullish October sales data. Xpeng delivered more than 10,000 cars for a second month while BYD recorded an 85 per cent surge in sales. Ganfeng Lithium won a three-year supply contract from Tesla.