News that Chinese electric car maker Nio (NYSE:NIO) plans to make a play for European market share this year has NIO stock up nearly 5% on Monday morning. The firm is due to report fourth-quarter earnings today after markets close.
Europe could be a precursor to the EV firm’s entry into other international markets in 2022, according to a report by Bitauto.com, an automotive industry media outlet founded by NIO Chairman William Li. The moves would mark the firm’s first foray outside of its native China.
According to CnEVPost, Li in January said that the center screen navigation map shown at the launch of its first sedan, the ET7, revealed information about its entry into overseas markets. That month, job postings seem to indicate that Nio was preparing to finally break into Europe.
The reports coincide with Beijing’s introduction of a development plan for China’s new energy vehicle industry on Monday. China has ranked first in the world in new energy vehicle production and sales for six consecutive years, with cumulative sales of 5.5 million units, government officials said.
NIO Stock Has Seen Boost From Beijing Support
NIO stock has received support to keep it competitive in the EV space from a number of programs undertaken by China’s bureaucrats. A 2020 government bailout gave Nio some 7 billion yuan ($1 billion) as the company’s coffers ran low on cash. Other programs, including EV purchase rebates and tax exemptions, have stoked domestic sales.
None of this is lost on InvestorPlace analyst Luke Lango, who wrote in November that “it has become increasingly obvious that NIO has the ability and technical prowess to distribute its top-selling premium e-SUVs all across the world, including in the U.S. and Europe.”
“NIO will dominate China’s luxury EV market at scale because the company makes the best electric cars in China, with the most exclusive and desirable branding in the market, and sells those cars at great prices thanks to a unique business model,” he wrote.
Today’s earnings report is expected to reveal a loss of 7 cents per share, according to consensus analyst estimates. Revenue should be up 148% from a year ago, to around $1 billion. Management has scheduled an earning conference call for 8 p.m. Eastern tonight.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.