Whether or not you’re interested in buying NIO stock, you should be aware of the risks involved. This is especially true if you’re considering making a purchase that has a high risk of losing value. The best way to protect yourself is to find a brokerage that offers a free market analysis of the company. The analysis will tell you how NIO’s shares should trade.
EV stocks are here to thrive
EV stocks are in a bear market. They have fallen in price by 25%-75%. The bear market is driving investors out of growth names and into cheaper value stocks.
Despite the bear market, there is tremendous momentum in the pure-play EV stocks. The global climate summit and Biden’s infrastructure bill are boosting investor optimism.
There are three main players in the EV race, Tesla, Lucid Group, and Nio. These three companies are developing next-generation technologies in autonomous driving and batteries. These technologies will help these companies to gain a strong position in the EV industry.
The International Energy Agency estimates that by 2030, 145 million electric vehicles will be sold worldwide. These vehicles include cars, vans, trucks, and buses. These vehicles will play a major role in reducing the carbon footprint.
EV stocks aren’t on the list of stocks that are better buys
EV stocks have lagged in recent months as investors have rotated out of growth names, and have embraced cheaper value stocks. Despite this, pure-play EV stocks are still making a strong impact in the market. These companies are benefiting from massive demand from automakers and electric charging station companies.
The global EV market is expected to double to 6.6 million vehicles by 2021. Global EV sales will continue to grow in 2022. Many automakers are in the process of expanding their EV lineups.
One of the biggest challenges for a carmaker is balancing meeting strict emissions standards and generating revenue from EV sales. As the market gets more competitive, a company must prove it can consistently post profits and meet production targets.
NIO’s EPS is forecast to be -$0.63 for 2022
Having been in business for over five years, NIO has already established a robust reputation as a manufacturer of high-quality electric vehicles, and the company is planning to release a series of high-end electric vehicles, including the new ES7 mid-to-large five-seat SUV. In addition, the company will also unveil the world’s first electric vehicle that features the latest in battery technology.
While the company hasn’t revealed its earnings plans, analysts are still speculating on what the company will deliver in the coming quarters. In the meantime, however, NIO is making headlines for its impressive product line, which includes the aforementioned ES7, and the new EP9 supercar. With that said, the company hasn’t exactly been quiet on the public relations front, as COVID-related constraints were enforced in China over the weekend. In fact, the company did issue a press release on May 1, highlighting the supply chain and logistical challenges posed by the new model.
NIO’s battery-swapping strategy sounds good, but it could weigh on the stock
EV startup Nio is a disruptive force in the EV industry. Not only does the company offer an all-electric SUV, but it has also developed a business model that makes owning an EV more affordable. In addition, it has a battery-swapping strategy that could weigh heavily on the company’s stock price.
The company has established a network of 700 battery-swapping stations in China and plans to add another 600 sites. It also hopes to install a total of 4,000 stations by 2025.
With the next iteration of its swapping station, Nio plans to cut the costs by half. Currently, the cost to build a swapping station is around $500,000, but the company says that costs will be halved with the next iteration. The company will also start building EVOGO stations throughout China, and plans to open 10 stations in the first year.
Among the numerous new entrants to the automotive scene, the Chinese electric vehicle maker is a notable contender. After rolling out the first ET5 tooling trial builds in late April, the company plans to deliver its fifth-generation car by the end of the year. The ES7 is slated to feature the company’s signature NIO Technology 2.0 (NT2) system.
While the NIO ES7 may be the cheapest EV on the block, the company’s SUV boasts a price tag of half that of the Tesla model. The company is slated to unveil a new mid-sized five-seat SUV in late May of next year. A digital cockpit upgrade program is also in the works for existing users. The EV maker has also secured a license to test autonomous vehicles in Shenzhen.