NIO shares belong to the securities of electric car manufacturers. This sector is quite promising right now, as electric cars are gaining popularity. NIO is a young company, but it is increasing its car production at a fast pace. The Chinese electric car manufacturer is gradually entering international markets and has announced deliveries of cars to Europe.
NIO is a Chinese automaker that specializes in the development of electric cars. The company was founded in 2014 and is based in Shanghai. Its founder is William Li, chairman of Bitauto and NextEV. As early as October 2016, the automaker announced that it had received permission from the California Department of Motor Vehicles to test autonomous vehicles. This allowed it to begin testing its vehicles on public roads.
NIO stock is listed on the New York Stock Exchange under the ticker symbol NYSE: NIO and on the Hong Kong Stock Exchange under the ticker symbol SEHK: 9866. The company filed for an IPO on the NYSE in September 2018. The automaker has attracted investments from major market players such as Tencent, Temasek, Sequia, Lenovo and TPG during its operations.
The first NIO electric car was unveiled in 2016. However, this EP9 supercar was not put into production. In late 2017, the company launched the ES8 full-size SUV. Over the past few years, the Chinese manufacturer's lineup of electric vehicles has expanded to include the ES6 and EC6 SUVs and the ET5 and ET7 sedans. In June 2022, the company announced the launch of the ES7 SUV. All of the automaker's vehicles come equipped with Nomi voice assistant, an autopilot system and other basic features.
NIO differs from its domestic and foreign competitors in the use of battery replacement stations. Thanks to this, drivers are able to quickly replace worn-out batteries with fully charged ones. Other electric car manufacturers usually use charging stations. This approach makes this company similar to electric scooter supplier Gogoro, which also builds battery replacement stations for passengers. Both companies charge a subscription fee for the use of such stations.
Nio's stock price fell more than 40 percent in September 2022. The drop in the electric car maker's stock price continued in October. This was due to the disappointing macroeconomic news. Thus, inflation data in the U.S. was worse than expected, forcing the Fed to continue raising interest rates. Though Nio is not doing business in the U.S. yet, the interest rate hike will have global implications anyway, including for the Chinese electric car maker.
On Oct. 17, 2022, Nio stock was up nearly 6 percent. This rise in quotations came after Chinese President Xi Jinping announced the country's development plans for the next five years. He stressed the need for China to focus on developing its own technology, which partly refers to the creation of electric cars. Following Xi Jinping's speech, the S&P 500 Index (up 2.7%) and the Nasdaq Composite (up 3.4%), which includes stocks of technology companies, also rose.
In the second quarter of 2022, the company's net loss rose to $412 million. Total revenue rose 22% year over year, exceeding $1.5 billion. Car margins were at 18% in the first quarter of 2022, but declined to 16.7% in the second quarter. On the other hand, the company has $8.1 billion in cash reserves, so the electric car maker will own enough capital to continue operations in the near term, despite a growing net loss.
Some investors see NIO's stock price decline as a good opportunity to buy the asset for the long term. However, analysts warn that this corporation's securities are considered a risky asset at this time because of global economic uncertainty.
While making out share price forecasts for NIO stock, analysts disagree. For 2023, experts set the maximum level of the company's quotes at $30. Some analysts see potential growth in the value of the Chinese carmaker's securities above this level. By 2025, analysts expect the NIO stock price to rise to $55. The growth of quotations may be promoted by the increase in demand for electric cars in the world. NIO's stock could rise to $70 by 2030, which is a good prospect for long-term investors.
In March 2020, NIO stock was trading at $3. After the pandemic began, the Chinese automaker's stock price rose significantly, but the company still faced problems related to component shortages and quarantine restrictions.
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From October 2021 to October 2022, NIO stock went from $35 to $10.
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