The global shortage of semiconductor chips continues to affect Chinese electric vehicle companies. However, this industry still has huge long-term potential. Popular Chinese EV stock NIO Inc., XPeng Inc., and Li Auto Inc. were able to beat third quarter vehicle sales estimates. This is despite the fact that the global chip shortage continues to impact the industry. However, EV sales in China have seen a significant boost thanks to subsidies and other preferential policy. The Chinese government wants 20% of all new vehicles sold by 2025 to be electric cars.

Moreover, China’s Ministry of Industry and Information Technology indicated there could be sector consolidation. Tu Le, the founder of Beijing-based advisory firm Sino Auto Insights, said that he expects China’s top electric-car makers to benefit from efforts to consolidate the industry “since it’ll eliminate potential competitors and perhaps allow them to acquire a team or technology to enhance their products.”

Li Auto Inc. and XPeng Inc. (XPEV) are two of the most well-known Chinese EV producers. They delivered higher-than expected EV sales during the third quarter.

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