What happened

Shares of China-based electric vehicle (EV) maker Li Auto (LI -1.92%) have been on a tear this year. The stock is up by more than 23% year to date, with the majority of those gains coming this week. Li shares were higher by 14.5% since last Friday's closing price as of midday trading on Friday, according to data provided by S&P Global Market Intelligence.

So what

Momentum in the stock has been coming from China's reopening that helped Li report strong fourth-quarter delivery numbers earlier this month. The company delivered a record number of vehicles in December, helping the company achieve 47% year-over-year growth in 2022. 

But the spike this week came from something Tesla (TSLA 5.30%) CEO Elon Musk said in that company's fourth-quarter earnings call with analysts. 

Parent and child plugging in EV together.

Image source: Getty Images.

Now what

Tesla impressed investors with its fourth-quarter results earlier this week. The company overcame struggles that particularly impacted its factory in Shanghai, China. That government's attempt to prevent COVID-19 from spreading also hindered supply chains and consumer spending. 

But Tesla and Chinese EV makers like Li Auto started to overcome that hurdle late last year. When Tesla executives were asked in the conference call about the competitive landscape, there were several comments regarding Chinese EV makers' competitive advantage

Tesla's vehicle engineering vice president Lars Moravy commented, "The Chinese are scary, we always say that." Musk followed that by saying, "The Chinese market is the most competitive. They work the hardest, and they work the smartest." He added that he felt that one of the Chinese EV makers would become the most successful EV company besides Tesla. 

That helped spur investors to push shares of Li Auto and other Chinese EV stocks higher this week.