NIO, Xpeng, and Li Auto Are Not the Next Tesla. Why It’s Time to Unplug From Chinese EV Stocks

Electric vehicles are the future of the auto industry, so it’s no surprise they have captured Wall Street’s imagination, especially in this pandemic-plagued year when so many other businesses are starved for growth.

Consider the rise in the American depositary receipts of three Chinese EV companies—Nio, XPeng, and Li Auto. XPeng’s ADRs (ticker: XPEV) have tripled, to a recent $44.52, since the company’s Aug. 27 initial public offering, while Li Auto (LI) is up 180%, to $32, from its July 30 IPO. But NIO (NIO), which came public...