NIO (NIO) - Get NIO Inc. American depositary shares each representing one Class A Report and Xpeng (XPEV) - Get XPeng Inc. American depositary shares each representing two Class A Report were climbing Thursday after the Chinese electric vehicle makers both reported big gains in their first-quarter deliveries.
NIO was advancing 7.9% to $42.06, while Xpeng was rising 6.4% to $38.86 in premarket trading.
NIO said it delivered 20,060 vehicles in the first quarter, up a record 423% from a year ago. The company delivered 7,257 vehicles in March, a new monthly record and up 373% year-over-year.
Xpeng said it delivered 13,340 Smart EVs in the first quarter of 2021, a record 487% increase year over year. In March, Xpeng delivered 5,102 Smart EVs, a 384% increase year over year and a 130% increase month over month.
"This morning the EV sector got another shot of good news with Chinese EV stalwarts Nio and Xpeng both exceeding Street estimates for deliveries in March, which we view as a very positive indicator of the China EV market growth trajectory for the rest of the year," Wedbush analyst Daniel Ives said in a research note on Thursday.
Ives said he expected "more good news out of China over the next 24 hours with our expectations that Musk & Co. had a strong March in China with Model 3 sales exceeding Street expectations with S/X deliveries noise at this point."
Electric vehicle stocks got a jolt on Wednesday after President Joe Biden unveiled his latest infrastructure program, which includes $174 billion of support for the industry.
"We believe with a Biden-driven green tidal wave in the US, coupled by brisk EV demand in China and Europe, that the EV sector is entering a golden age with a new auto supply chain (OEMs, batteries-QS, recycling, commercial vehicles, trucks, fleet conversions) being built over the next decade," Ives said.
The analyst said he continues to encourage investors "to see the forest through the trees on these EV names."
Ives said recent chip shortages that have hit the auto industry "are near-term speed bumps that will be quickly forgotten given the skyrocketing demand trajectory ahead on this $5 trillion EV market globally."