After an amazing 2020, many electric vehicle stocks took a nosedive recently. NIO (NYSE:NIO) stock is no different, with the stock shedding 22.9% of value in the last three months.

However, now that shares are down substantially from their 52-week high, I believe they are trading at an attractive price point.

Shanghai-based NIO is a solid performer in the EV space. It has managed to carve out a niche for itself that is quite impressive.

The Chinese electric car company has plans to expand in the U.S. and Europe. Outside of China, these are the two most lucrative EV markets in the world. Understandably, NIO stockholders are looking forward to these developments.

Readers of this space know that I am very bullish on NIO stock. My only concern has been valuation. Now that shares have cooled off, it is ideal for loading up on NIO stock before the eventual rally.

NIO Stock: All the Makings of a Multibagger

Several businesses suffered massive blows last year. However, some business segments actually thrived in the tough environment, chief among them, EV stocks.

Let me be clear. I am not suggesting you should actively short frothy EV firms, nor do I think the rally is over. Far from it, I believe we are at the cusp of the EV revolution. Governments are spending aggressively on EV infrastructure and introducing legislation to curb the sale of new combustion-engine vehicles.

And we have not even talked about China, the world’s biggest EV market. The China Society of Automotive Engineers expects sales of new energy vehicles (NEV) in China to increase to 20% of overall new car sales by 2025 and 50% by 2035, from just 5% at the moment.

According to Carbon Tracker, China’s aggressive push towards electric vehicles is expected to slash global oil demand growth by 70% by 2030.

All of this is great news for a local EV maker like NIO. Not only is the company generating excellent top-line growth, but it also enjoys a strategic relationship with a local Chinese government.

At the height of the pandemic, the Chinese EV maker inked a $1 billion bailout with the city of Hefei, the capital of the Anhui province. In exchange, it agreed to establish a new subsidiary, Nio China, of which the Hefei investor group now owns a 24% stake.

On the one hand, the Chinese government will definitely exert a lot of control in the company’s day-to-day operations, but is a close relationship with a Chinese administration really that bad?

Some might even argue that it is just the kind of tonic any major EV enterprise needs, considering the size of the Chinese EV market.

Fundamentals Are Sound

Although NIO is a relatively young company, it is progressing at a decent clip. At this point, every time the company releases a report on their deliveries, you expect a new record. It will take up a lot of space to go through each of the delivery numbers individually.

But the trend is upward. In the first quarter of 2021, vehicle deliveries came in at 20,060, representing an increase of 422.7% from the year-ago period and 15.6% on a sequential basis.

The vehicle margin was 21.2%, compared with negative 7.4% one year ago and 17.2% in the fourth quarter of 2020. The other operating metrics are also great, part of a larger uptrend for the EV maker.

Now you may be concerned with the EPS figure of $-3.140, which is a ‘negative’ surprise of 210.9% compared to the consensus earnings estimates of $-1.010.

However, this unusually bad result is because NIO decided to spend 5.5 billion yuan to acquire 3.305% of its subsidiary entity NIO China from two investors in the first quarter. This is an example of one-off items that are not expected to recur and which therefore do not constitute part of a trend for the leading Chinese electric vehicle manufacturer.

Finally, even though the stock is expensive when you compare, it is still enormously cheaper than TSLA stock, making it the better option if you want exposure to this high growth space.

Broadening the Horizon

We have talked extensively about NIO and China. But the growth story for the company is beyond its home country.

In September, the Chinese electric car upstart will take its first step outside its home market, delivering the latest version of its ES8 all-electric six- or seven-seat sports utility vehicle and opening a 2,150-square-meter showroom in central Oslo.

The move makes sense.

Last year, Norway became the first nation to see electric cars take a majority of annual vehicle sales. Aside from China, Europe is the main market for EV cars, while the U.S. has a lot of catching up to do.

Nio founder William Li said the company chose Norway as its first foray into the European market because of its commitment to sustainability.

The Chinese EV company will launch sales in five more European countries in 2021 following its launch in Norway.

Li also said Nio one day hopes to access the U.S. market but did not give a definitive date for a debut.

“Under the current international relations situation, it’s tougher for Chinese-background companies to enter overseas markets compared with years ago,” he said.

My Final Word

After a blockbuster in 2020, EV stocks have cooled down a bit.

Investors are returning to traditional investment ideas after a hyperbolic year. They are now focusing on the stocks that are consistent performers, which pay high dividends and have strong tailwinds. However, the sharp correction allows you to buy EV stocks at an attractive price point.

But by all merits, NIO stock looks like a winner with stellar management and excellent expansion plans. You will not have sleepless nights with this one in your portfolio. And at current rates, shares are pretty much a steal.

On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.