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Nio Stock Looks Great on the Strength of This Norway SUV Push

It’s mind-blowing to think about how far Chinese electric vehicle (EV) maker Nio (NYSE:NIO) has progressed in just a couple of years. Once NIO stock was plunging towards $2, but today it’s easily in the double digits.

A Nio (NIO) sign and logo on a tan concrete building.
Source: Sundry Photography / Shutterstock.com

Not that it’s been a perfectly smooth ride. Indeed, the stock has pulled back recently, likely due to a broader drawdown in Chinese stocks and concerns about the supply chain for tech products.

These are legitimate concerns – no doubt about that. On the other hand, NIO stock has a tendency to bounce back after each and every dip.

Will this time be different? There’s no guarantee, but some impressive delivery stats – along with interesting news coming out of Scandinavia – should keep the investing community engaged.

A Closer Look at NIO Stock

This year started off strongly for NIO stock as it quickly hit $62 in January. However, that turned out to be a strong resistance level.

Interestingly, the stock touched $62 twice in January and once in February, before declining sharply. By early March, it was down to $35.

NIO stock chopped around for a while, but it was still at $35 at the end of September (it trades today at a little more than $33). So, I can fully understand the frustration that some investors must be feeling now.

Furthermore, Nio’s trailing 12-month earnings per share is -88 cents. That’s negative, I’ll grant, but it’s not too bad for a $33 stock.

The immediate goal, then, should be to get the company into a positive per-share earnings scenario. After that, the sky’s the limit.

One more quick point: Nio just announced an at-the-market offering of $2 billion worth of its American depositary shares.

The current stockholders might not like the idea of more shares circulating into the market. However, at least Nio should receive a hefty amount of capital from this transaction.

Delivering the Good News

One common way to measure an automaker’s growth is by keeping track of its vehicle deliveries, month by month.

Nio’s evolution has hinged on its delivery statistics. The company’s improvement in this area has kept investors optimistic, and the latest numbers shouldn’t disappoint anyone.

In August, Nio delivered 5,880 vehicles. That represents a 48.3% year-over-year increase.

Moreover, Nio achieved this result despite supply chain constraints resulting from the Covid-19 pandemic in areas of China and Malaysia, which disrupted the manufacturing of the ES6 and EC6 vehicle models.

With that, Nio’s running total is growing quickly. As of Aug. 31, the automaker’s cumulative deliveries of the ES8, ES6 and EC6 models reached 131,408 vehicles.

Achieving that number seemed unimaginable in March of last year, when the world was thrown into chaos and vehicle sales practically halted.

Big Launch in Norway

Sometimes it’s easy to forget that even though Nio is a Chinese automaker, the company’s vision for expansion is global.

We can see an example of this in a recent news development. Specifically, Nio is launching its ES8 electric sports utility vehicle in Oslo, Norway.

To celebrate this event, Nio tweeted a sneak peek of the showroom called Nio House in Oslo. This is, according to the company, the first Nio House outside of China.

In addition, Nio revealed that it’s following a global pricing strategy and, after adjusting for logistics and operating costs, the ES8 would go on sale at an entry price of around $59,575 for the standard-range battery, or $66,422 for the long-range battery.

On top of all that, Nio disclosed that it plans to add 20 Power battery swap stations in Norway by the end of 2022.

It won’t be long now, as the company’s first integrated station for battery charging and swapping in Norway is expected to be up and running by the end of October.

The Bottom Line

Clearly, Nio is making substantial progress in terms of its vehicle delivery growth.

Plus, the company is rapidly expanding its operations beyond Chinese borders.

So, don’t worry too much about the recent pullback in NIO stock. Given all of the encouraging news, a share-price breakout could be just around the corner.

On the date of publication, David Moadel 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.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


Article printed from InvestorPlace Media, https://investorplace.com/2021/10/nio-stock-looks-great-on-the-strength-of-this-norway-suv-push/.

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