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China Electric-Vehicle Stocks Are All the Rage, Trouncing Tesla

  • Nio, XPeng and Li Auto’s ADRs each up over 64% in past month
  • Investors say more catalysts needed for the rally to last
A NIO Inc. dealership in Shanghai, earlier in June. 

A NIO Inc. dealership in Shanghai, earlier in June. 

Photographer: Qilai Shen/Bloomberg

Shares of China’s electric-vehicle makers are trouncing global industry leader Tesla Inc., bolstered by Beijing’s consumption incentives and heavy dip-buying from investors.

American depository receipts of Nio Inc., XPeng Inc. and Li Auto Inc. have surged at least 64% each over the past month to be among the top gainers in Chinese stocks traded in the US. The sharp rally reflects improving sentiment following a monthslong slump due to worries over high valuation and supply bottlenecks.