Nio, Xpeng, Li Auto Stocks Surge Pre-Market After China Pledges Fresh Stimulus Amid Trump’s Return: Retail Divided

The news propelled the stocks of three companies to gains of 4%-5.4% on the Hong Kong Stock Exchange.

U.S.-listed shares of Chinese EV makers Xpeng, Nio, and Li Auto surged more than 7% in pre-market trading Monday following a statement from China’s Politburo led by President Xi Jinping. 

The statement outlined plans to implement “more proactive fiscal policies and moderately loose monetary policies,” marking a significant policy shift. 

This is reportedly the first mention of “moderately loose” central-bank policy since 2011 and introduces “extraordinary counter-cyclical adjustments,” indicating a robust fiscal expansion and potential interest rate cuts.

Zhaopeng Xing, a senior strategist at ANZ Bank, described the Politburo’s language as “unprecedented” and reflective of China’s confidence in countering U.S. economic threats, including President-elect Donald Trump’s proposed 60% tariff on Chinese exports, according to Bloomberg. 

Analysts at Societe Generale highlighted the historical significance of this policy shift, comparing it to measures taken during the aftermath of the Global Financial Crisis, according to MarketWatch.

The news propelled the stocks of Xpeng, Nio, and Li Auto to gains of 4%-5.4% on the Hong Kong Stock Exchange.

In U.S. trading, Nio is poised to reach its highest levels in over a month, Xpeng is rebounding to three-week highs, and Li Auto is targeting one-week highs if pre-market gains hold.

Despite the gains, retail sentiment on Stocktwits showed divergence. 

Xpeng and Li Auto displayed ‘bullish’ scores, while Nio encountered ‘bearish’ sentiment. 

Skeptics on Nio’s stream argued that the rally might be short-lived, pointing to broader concerns about the EV maker’s long-term prospects. 

However, one optimist highlighted Nio’s chip development, its two sub-brands slated for 2025, and its Battery-as-a-Service (BAAS) model as game-changing factors.

The Chinese EV trio also garnered attention last week after the firms reported record monthly deliveries for November. Guidance from their third-quarter earnings calls suggested that December could set another record, adding fuel to the recent rally.

Year-to-date, Nio’s stock has declined over 45%, while Li Auto is down more than 35%. Xpeng, while outperforming its peers, has still shed over 10%. 

The Chinese Politburo’s policy shift could provide a crucial tailwind for these EV makers as they navigate a challenging global economic landscape.

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