Nio (NYSE:NIO) stock entered 2021 close to $50 and is nowhere close to it today, trading closer to $30. This is a little unexpected.
Despite the pandemic, the global electric vehicle industry has undergone a massive change. The demand for EVs is consistently growing and it has become difficult for automakers to keep up with the same.
On top of that, there is a shortage of chip supply and concerns about the Chinese government regulations, which was one of the things that put Nio in a fix.
The EV maker has grabbed a large market share and is expanding globally but the chip shortage and regulatory fears led to a dip in delivery numbers.
The stock went as high as $61 in January 2021 and started the downward journey at the end of February. It is trading close to $30 today and is much lower than the all-time high.
However, I continue to believe that NIO stock is the one for the long term and it will reward patient investors. If you are looking for EV stocks to add to your portfolio, do not miss NIO stock. Let’s dig deeper into what’s working for the company.
Strong Delivery Numbers
Not a lot of people could believe that Nio could manufacture close to 100,000 EVs annually but this was at the beginning of 2021. As the year comes to a close, we have seen the company prove itself time and again.
In terms of production, Nio has impressed with strong delivery numbers. It delivered 10,489 cars in December 2021 which is a 49% rise year over year. For this quarter, the company has delivered 25,304 EVs representing a 44% rise year over year.
The company delivered a total of 91,429 vehicles in the year. According to the guidance, Nio expected fourth-quarter deliveries between 23,500 and 25,500 vehicles. It managed to achieve the numbers which will reflect on the bottom line.
Although the delivery numbers are lower than that of rival Xpeng (NYSE:XPEV) they are proof that the company can bounce back and make the most of the growing demand, even in a pandemic.
It is important to note that Nio targets a different market as compared to XPeng and there is also a price difference. Nio caters to the luxury car market and has higher-priced models while XPeng is working to attract the younger demographic.
At the recent NIO Day event, the company gave investors a lot to look forward to. It unveiled a mid-sized sedan, the ET5, and has already opened reservations for it. The company will begin deliveries in September this year.
Further, to meet the global expansion goals, Nio plans to enter Sweden, the Netherlands and Denmark in 2022. This will allow the company to attract a wider customer base and cater to their needs.
The new model and competitive price point can boost Nio’s position in China. As sales continue to grow in the EV market, Nio will have a stronghold in the industry.
It will also benefit from the increased manufacturing capacity and high customer loyalty. Despite the competition and the chip shortage, Nio is making strong moves and has a lot to look forward to.
The Bottom Line on NIO Stock
I believe NIO stock is a great EV play. It is trading at a discount currently and may not be this cheap in the coming months. The company is doing everything right, from launching a new model to working toward expansion of production capacity. Nio will have a strong run in 2022 and the annual numbers will set the stage for it.
Place your bet on NIO stock while it is trading close to a 52-week low. This is the stock to own and hold for the long term.
On the date of publication, Vandita Jadeja 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.
Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long-term gains. Her knowledge of words and numbers helps her write clear stock analysis.
