it's smaller companies that generate some of the fastest sales growth, while
large-cap stocks (those with market caps of at least $10 billion) grow at a
more tempered pace. Larger companies are more likely to have time-tested or
mature operating models, making it less common that they generate eye-popping
Nio Inc – ADR (NYSE: NIO), often referred to as "the Tesla
of China," and is showing great promise in following in the footsteps of
the EV pioneer, is bucking the trend in this situation.
is on track to, at minimum, quintuple its sales over a four-year period,
according to Wall Street's consensus revenue estimate for 2024 (or fiscal
2025). You could rightly say that this is one of the fastest-growing large-cap
stocks on the planet.
all goes well, full-year sales can catapult from about $2.5 billion in 2020 to
$16.8 billion in 2024. That's a sales increase of approximately 561%.
a global chip shortage, NIO has shown Wall Street that it can effectively scale
its production. After delivering 20,060 vehicles in the first quarter, the
company is on pace to deliver between 21,000 and 22,000 EVs in the second
quarter. Once global chip supply issues are resolved, NIO will look to boost
its annual delivery capacity to around 150,000 EVs.
NIO, innovation is extremely important. It's been introducing one new vehicle
each year, with the sportier EC6 crossover SUV hitting showrooms last summer.
It's quickly become a hit with EV buyers.
NIO introduced a battery-as-a-service program. For a monthly fee, this
subscription service allows buyers to replace or upgrade their vehicle's
batteries. It also reduces the initial purchase price of the vehicle. Though
NIO is giving up near-term margin by reducing the purchase price of its EVs,
it's keeping buyers loyal and generating very high margin residual service
NIO has also done an excellent job of ramping up production over the
past year. Even though output is currently constrained by a global chip
shortage, it's on track to deliver between 21,000 and 22,000 EVs in the second
quarter. For some context, it delivered only 20,565 vehicles in the entirety of
It wasn’t so
long ago that analysts and investors alike were ready to write off their losses
and give up on electric vehicle manufacturer Nio. But China’s answer to
Tesla’s dominance powered on, eclipsed estimates, and most importantly, kept
its balance sheet in line. And it’s paid off, in a big way. Nio Tesla’s largest
competitor in China, has also started to offer a batteries-as-a-service
concept, in which car buyers can ‘lease’ the battery of their vehicle and save
as much as $10,000 on the price of a new vehicle, while also offering buyers
the option to swap batteries after a few years of use.
be huge for Nio, which is already making major moves. In fact, just last fall,
Nio revealed a pair of sedans that even the biggest Tesla die-hard would
struggle to pass up. The vehicles, meant to compete with Tesla’s Model 3, could
be just what the company needs to pull back control of its local market from
Elon Musk’s electric vehicle giant.
Nio broke above its downtrend with nearly a 10% gain. Over the weekend, analysts
reported 5 more battery swap stations in China from the company and also noted
they have a Power Day coming up July 9.
"NIO Power Day"
Nio said it
will hold a "NIO Power Day" event next month. "NIO Power"
is the company's name for its suite of vehicle-recharging products and
Chinese electric-vehicle news outlet CnEVPost reported that NIO has
begun inviting China-based journalists to NIO Power Day on July 9. The NIO
Power "service," as the company calls it, includes NIO's charging
network, its fast-growing network of battery-swap stations, and related
services including home chargers and "mobile charging cars" that can
assist stranded NIO owners.
The event will commemorate the third anniversary of NIO Power's launch, the
Electric-vehicle investors have become accustomed to companies using
big-day events to unveil new products and services but the excitement is warranted in this case.
NIO has said that it is accelerating the rollout of its new-and-improved
battery-swap stations, and we might see updates on that front; but I'm not
(yet) expecting big news from the July 9 event.
Benefits of Electric.....
is electric …And it could be much more than that.
on-demand cars, virtual showrooms, and an end to insurance, maintenance and
where we get super clean and wildly convenient.
broke just about every previous EV record in 2020, even in the middle of a
soared by over 40%, while overall car sales dropped by 14%.
just getting started and now there’s another potential huge disruptor. This one
won’t hinder the mainstreaming of EVs, but it could help rock the auto industry
to its core.
one analyst, the car subscription market is set to top $12 billion by 2027.
The first supercharged growth stock Wall Street sees driving away from
its competition is electric-vehicle manufacturer NIO. Even though NIO is
getting near the mean consensus price target, the high-water mark among
analysts calls for the company to hit $92 a share. That implies a more than
doubling in NIO's shares, based on where it closed this past weekend.
The bullishness surrounding NIO likely has to do with the company's
location and its ability to scale production. Concerning the former, China is
the largest auto market in the world. By 2035, the projection is that half of
all vehicles sold will be powered by some form of alternative energy, 95% of
which are EVs. Since the EV market is still nascent in China, the door is wide
open for NIO to become a major player.
of brokerages have recently issued reports on NIO.....
- Citigroup raised NIO from a “neutral” rating to a “buy” rating in a
research note on Tuesday, June 1st.
- Deutsche Bank Aktiengesellschaft reaffirmed a “buy” rating and set a
$60.00 price objective on shares of NIO in a research note on Tuesday, April
- BOCOM International initiated coverage on NIO in a research note on
Tuesday, June 8th. They issued a “buy” rating and a $57.00 target price on the
- CLSA initiated coverage on NIO in a research note on Friday, April 23rd.
They issued a “buy” rating and a $50.00 target price on the stock.
- Finally, HSBC raised their target price on NIO from $44.70 to $54.00 and
gave the stock a “hold” rating in a research note on Friday, February 26th.
Six analysts have rated the stock with a hold rating and fourteen have
assigned a buy rating to the company. The company has an average rating of
“Buy” and an average price target of $49.86.