If you believe in the future of the global movement towards electric-powered vehicles, Nio (NYSE:NIO) is a company that should be on your radar. As an investor, you’ll find that Nio stock is easily affordable and the company has strong growth potential.
Don’t get me wrong: there is always risk involved if you’re investing in a start-up company. That being said, it’s undeniable that the electric-vehicle market is disrupting the automotive industry as we know it. And as a business enterprise, Nio is still in the first innings of the game.
It is true that the novel-coronavirus crisis took a serious toll on the global automotive market. But that actually provided an opportunity to accumulate shares of Nio stock while panic was setting in. Today, the data suggests that the fears were overstated. The electric-vehicle market is here to stay, and so is Nio.
Nio Stock at a Glance
A look back at the historical price action shows that Nio stock has been above $10 not just onec, but twice. The shares first broke above that level in 2018. Then, the buyers pushed Nio shares above $10 again in 2019.
The stock could easily have breached that level again in the first half of 2020, but the novel coronavirus crash delayed any prospects of a sustained breakout. What the buyers needed to see was a sign of hope that the electric-vehicle market would recover.
Thankfully, there was data to provide encouragement to struggling Nio stockholders, which we’ll talk about in just a moment. And now the trend is clearly to the upside, with a real possibility of Nio shares attaining all-time high prices before the year is over.
Marking an Inflection Point
While the global pandemic dented the electric-vehicle market, and the automotive market generally, this shouldn’t dissuade anyone considering an investment today. We can’t expect the transition from gasoline- and diesel-powered cars to electric vehicles to be perfectly smooth.
Despite the bumps in the road, the outlook for the electric-vehicle industry looks bright. Bernstein analyst Mark Newman estimates that the production of electric vehicles will achieve a range between 1.3 million and 1.5 million, depending on this year’s market conditions.
Moreover, research conducted by Cairn Energy Research Advisors suggests that electric-vehicle sales will surge in 2021. This pickup in sales will likely be driven, at least in part, by various nations’ initiatives encouraging people to buy battery-powered automobiles.
According to Cairn’s estimates, the global sales of electric vehicles next year will increase by 36%. Not only that, but for the very first time, electric-vehicle sales in 2021 will exceed 3 million vehicles.
Sam Jaffe, the managing director of Cairn Energy Research Advisors, even seemed to suggest that next year will be a watershed year for the electric-vehicle market: “There’s pent-up demand for electric vehicles … We will see a combination of factors make 2021 an inflection point for the sale of electric vehicles.”
An Outstanding Month for Nio
All of the foregoing should benefit Nio’s business, of course. But there’s also company-specific data that should boost the spirits of any current or prospective Nio shareholder.
In the month of May, Nio delivered 3,436 vehicles. That represents astounding year-over-year growth of 215.5%. It’s also a record for Nio in terms of monthly vehicle deliveries.
In addition, Nio projects an “all-time high in quarterly deliveries” for the second quarter. The company expects up to 158% quarter-on-quarter growth, which would translate to roughly 10,000 cars.
In other words, as far as Nio’s vehicle sales are concerned, the speed bumps are in the rearview mirror now.
The Final Word on Nio Stock
The coronavirus slowed down the electric-vehicle industry, but couldn’t stop it permanently. Nio is part of this fast-emerging industry, and Nio stockholders can hold their shares in anticipation of a steadily improving market.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.