In late October, Li, Xiao, and Wei continued to hover near their 52-week lows on both the Hong Kong and U.S. stock exchanges. Tesla's market capitalization still fluctuates by more in a single day than the combined market caps of these three companies. Once collectively hailed as the 'vanguards of the new energy vehicle sector,' NIO, XPeng, and Li Auto have all seen their market valuations dip below HKD 100 billion.

Since the start of the year, the stock prices of these three firms have taken turns in decline. Li Auto is under pressure from expectations of a shift from profitability to losses, XPeng's stock price has plummeted by more than half this year, and despite NIO reporting consecutive quarters of reduced losses in its financial statements, it has been unable to stem the selling pressure.

With the penetration rate of new energy vehicles surpassing 60%, the industry has transitioned from enjoying incremental dividends to facing fierce competition in existing markets. Huawei, Xiaomi, Leapmotor, and Aito have carved up the price range from RMB 200,000 to RMB 500,000 into multiple segments.

In the past, investors were willing to pay a premium for the narrative of 'China's Tesla,' but now their focus has narrowed to one key question: Can scale be reliably converted into profits? Under this premise, the declines of Li, Xiao, and Wei reflect the same market sentiment, but their survival conditions have diverged markedly.

NIO: Multiple Brands Gaining Momentum

Among the three, NIO demonstrates the 'most significant operational recovery but the coldest capital response.'

In the first three quarters, deliveries exceeded 300,000 units, marking a nearly 50% year-on-year increase. The main brand maintains its foothold in the market above RMB 350,000, the Onvo brand caters to mainstream family needs, and the Firefly brand complements the premium compact car segment. For the first time, these three brands have truly formed a comprehensive product lineup.

In the second quarter, the gross margin for complete vehicles rebounded to 18.5%. Under adjusted metrics, the company achieved operational profitability for three consecutive quarters. Its battery swap network, chip development, and self-driven intelligent driving technologies constitute formidable barriers that competitors cannot easily replicate in the short term.

However, the stock price has not responded favorably.

The market is not fixated on the current quarterly report but rather on the 'ongoing validation costs' of NIO's model: the battery swap system necessitates massive investments in heavy assets, with single-station utilization still hovering near the breakeven point; Onvo, tasked with driving volume, faces stiff competition from BYD, Leapmotor, and price-cut products from joint ventures; after the rollout of multiple brands, hidden expenses in channels, marketing, and organizational coordination continue to escalate. While financial data is improving, the capital expenditure cycle has not concluded.

William Li has shifted the company's strategy from 'building barriers' to 'lean operations,' opening up battery swap cooperation with players like Geely and outsourcing heavy assets. However, as long as GAAP net profit has not consistently turned positive, NIO is still perceived by the market as 'profitable in prospect but not yet delivered'—this is the fundamental reason its valuation remains constrained: the narrative is compelling, but the timeline is too protracted.

XPeng and Li Auto: One Pursues External Growth, the Other Endures Internal Transitions

XPeng's decline resembles a 'growth stock discount.'

Deliveries are surging, reaching 100,000 units in the second quarter. MONA brings intelligent driving to mass-market prices, while the G9L and X9 cater to high-end and overseas markets. New models like the MONA L05 are lined up for the fourth quarter.

More significant changes are occurring overseas: in the first half of the year, overseas revenue accounted for over 25% of the total. With localized production in Europe, NGP overseas test rides, and technology licensing to Volkswagen, XPeng is expanding from 'selling cars' to 'selling cars and technology.'

Stories about the Turin chip, VLA intelligent driving, Robotaxi, and flying cars continue to circulate, but each is still in the investment phase.

The problem lies here. The gross margin for the automotive business is just over 12%, and the vehicle business has not yet achieved self-sufficiency. Annual R&D budgets exceed RMB 10 billion, with continued funding for AI and robotics directions.

The market does not dismiss XPeng's technology but is uncertain when these capabilities will translate into profits. As a result, XPeng's valuation remains heavily suppressed—it tells a story of a globalized tech company three to five years from now, but current capital is only willing to price it as an automaker in a high-investment phase.

Li Auto faces a different kind of challenge: it is not lacking in foundation but is stuck in a product generational gap.

The L series was once the most compelling solution for family scenarios in the range-extended era but now faces direct competition from Aito, Xiaomi, and Zeekr. Features like 'refrigerator, TV, and large sofa' are quickly becoming standardized, while intelligent driving and ecosystems are not Li Auto's strongest suits. In 2026, the company proactively cut off orders for older models, choosing to endure a delivery gap rather than engage in fire sales. This preserved short-term user reputation but dragged down both gross margin and sales volume. The all-electric i6, i8, and i9 models are gradually taking their place, and the all-electric version of the L series is undergoing road tests, but the profit model for all-electric SUVs has not yet proven successful.

Li Xiang has explicitly shelved sedan plans, refocusing resources on the 'large family space' theme, essentially using strategic contraction to achieve product focus.

Li Auto boasts the thickest cash reserves, strong brand equity, and mindshare among family users, but it faces the sharpest question: When the range-extension dividend fades and all-electric models have not yet taken over, where will the company's next round of premium pricing come from? The market's decline in its stock price is a pricing of 'uncertainty during the transition period,' not a denial of its product strength.

Conclusion

The synchronized decline in the stock prices of Li, Xiao, and Wei reflects shifting market expectations about their prospects.

In the past, the focus was on delivery growth; now, it is on per-unit profit. In the past, investors believed in tech narratives; now, they trust free cash flow. All three have been pulled back to the same valuation baseline, but the ground beneath their feet is entirely different:

NIO is testing whether 'heavy-asset service networks can become long-term moats,' XPeng is testing whether 'technology exports and globalization can withstand domestic price wars,' and Li Auto is testing whether 'a family brand can cross the generational gap from range-extended to all-electric.'

The road ahead will undoubtedly be tougher for all three. If each can find its own path, their stock prices may not rebound immediately, but the market will ultimately reward the first to translate 'stories' into 'profits.'