What’s New With Nio Stock?

NIO: Nio logo
NIO
Nio

U.S. listed Chinese EV player Nio stock (NYSE: NIO) has recovered by almost 65% from recent lows of about $13 per share seen in early May, currently trading at about $21. While Nio stock was weighed down by sluggish delivery growth over the first few months of the year due to Covid-19-related lockdowns in China, and also by concerns about the delisting of Chinese stocks from U.S. exchanges, there are a couple of factors that have helped Nio recently. Firstly, production and deliveries for Chinese EV players recovered strongly in the month of June, as the government eased Covid-19-related restrictions. In fact, Nio delivered a record 12,961 vehicles for the month, up 85% from May and up by almost 60% versus last year, although its deliveries were below rivals Xpeng and Li Auto, which delivered about 15,295 and 13,024 vehicles, respectively.

Things could look up for Nio going forward. While there are concerns about a global economic slowdown, amid surging inflation and rising interest rates, demand is unlikely to be an issue for EV players, in our view. EV sales in China soared 130% to 546,000 units in June, accounting for close to 30% of overall auto sales. The China Passenger Car Association also just raised its forecast for new energy vehicle sales (NEV) for 2022 to 5.5 million up from a previous expectation of 4.8 million. Production could pick up, with the semiconductor shortage showing signs of easing, due to cooling global growth and slower demand from the technology sector.  This should help Nio, considering that its high-end luxury SUVs have a very high semiconductor content.  Moreover, Nio also has new models in the pipeline, including the new ES7 SUV, which starts at about $78,000, and updated versions of ES8, ES6, and EC6 vehicles which are due to launch in August. The Chinese government’s support of the electric vehicle industry is also likely to continue, given the reports that it is considering extending tax breaks for EVs in the country.

Check out our analysis on Nio, Xpeng & Li Auto: How Do Chinese EV Stocks Compare? for more details on how Nio stock stacks up versus its peers Xpeng and Li Auto.

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What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Jul 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 NIO Return -3% -33% 231%
 S&P 500 Return 1% -20% 71%
 Trefis Multi-Strategy Portfolio 2% -21% 210%

[1] Month-to-date and year-to-date as of 7/14/2022
[2] Cumulative total returns since the end of 2016

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