What happened

The U.S.-traded shares of several Chinese electric vehicle makers were moving sharply higher on Tuesday, rebounding from a sell-off after a key interest rate bellwether moved lower. 

Here's where things stood for these three stocks as of 2 p.m. EST, relative to their closing prices on Monday. 

NIO (NYSE:NIO), which often moves in tandem with Li Auto and XPeng, was also trading sharply higher on Tuesday, up about 19.1% at 2 p.m. EST. 

So what

All three of these stocks, along with most of the electric vehicle cohort, sold off sharply last week after the rate on the bellwether 10-year U.S. Treasury bond moved to its highest point in over a year. That suggested that the market expects higher interest rates over the next few quarters, and rising interest rates are generally bearish for high-flying growth companies that aren't yet consistently profitable. 

Tesla (NASDAQ:TSLA), the electric vehicle category leader, also fell sharply (over 30%) on the interest rate move, with the selling likely exacerbated in its case by some negative headlines last week. But Tesla also rebounded sharply on Tuesday: As of 2 p.m. EST, it was up about 19.9%. 

Given that Tesla investors also own other EV stocks, it wasn't surprising to see the exuberance spread to other names in the cohort.

A silver Xpeng P7, a sleek electric midsize sedan.

XPeng's P7 sedan has sold well since its launch last spring. A smaller sedan is expected to join the company's lineup later this year. Image source: XPeng.

Now what

While the stocks' moves appeared to be driven largely by the broader rally, there was some minor news of note on both Li Auto and XPeng on Tuesday. 

Li Auto said on Tuesday that it has adopted a new stock option incentive plan, and specifically that its board of directors has awarded CEO Xiang Li about 108 million Class B stock options, set to vest in six separate tranches as key business-growth milestones are met. (To give an idea, the final tranche vests after Li Auto delivers at least 3 million vehicles over 12 consecutive months.) 

We should note that Li Auto's American depositary shares are each equal to two of its Class B shares. In U.S.-market terms, the total award is options to buy about 54 million shares at an exercise price of $29.26.

Separately, Daiwa analyst Kelvin Lau on Tuesday morning double-upgraded XPeng to buy, from sell, and raised his price target to $34 from $32. 

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