What is the EV price war and why is it important for investors?

The EV price war refers to the intense competition between electric vehicle manufacturers to offer lower-priced vehicles while maintaining features and quality. It's important for investors because it's driving massive production increases, benefiting the entire supply chain from raw materials to components. When companies like Xiaomi challenge Tesla with aggressive pricing, it expands the overall market size and accelerates EV adoption, creating investment opportunities across the sector.

What is LiDAR technology and why is it included in this stock group?

LiDAR (Light Detection and Ranging) is a remote sensing technology that uses laser light to measure distances and create detailed 3D maps of surroundings. In electric vehicles, it's a critical sensor technology for advanced driver-assistance systems (ADAS) and autonomous driving features. Companies like HSAI, INVZ, and LAZR are included in this group because LiDAR is becoming a key competitive feature in premium EVs. As Xiaomi, Tesla, and others compete on technology and features, LiDAR suppliers benefit from increased demand for their products.

Why are lithium producers included in a collection about the EV price war?

Lithium is an essential raw material for EV batteries, which represent about 30-40% of an electric vehicle's cost. As the price war intensifies and manufacturers like Xiaomi and Tesla ramp up production, the demand for lithium increases dramatically. Companies like GNENF and TQLCF are major lithium producers that directly benefit from this increased demand. Their inclusion gives investors exposure to the valuable upstream portion of the EV supply chain, which is crucial for the entire industry's growth.

How does Xiaomi's entry into the EV market affect traditional automakers?

Xiaomi's entry represents a significant threat to traditional automakers because it brings tech industry advantages: strong brand loyalty, software expertise, existing customer base, and efficient supply chain management. When tech giants like Xiaomi successfully enter the auto industry with competitive products like the YU7 SUV, it forces traditional automakers to accelerate their EV strategies, invest more in technology features, and often compress their profit margins to remain competitive. This creates opportunities for investors in companies that can successfully navigate this disruption.

What does "vertically integrated" mean for EV companies like BYD?

Vertical integration means a company controls multiple stages of its production process and supply chain. For BYD (represented by the ticker BYDDF), this means they not only manufacture electric vehicles but also produce their own batteries, semiconductors, and other key components. This strategy gives BYD significant advantages during a price war, including better cost control, less reliance on external suppliers, and the ability to capture profits at multiple points in the value chain. Investors often value vertically integrated companies for their resilience during competitive market conditions.

15 handpicked stocks

Xiaomi vs. Tesla: The EV Price War

Xiaomi's new budget-friendly YU7 SUV has sparked an intense price war with Tesla in China, the world's largest EV market. This collection features carefully selected companies across the EV supply chain that are positioned to benefit from this competitive manufacturing boom.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 30