Once the carnage is over, investors may want to consider a position in Nio Inc. (NYSE:NIO). At the moment, the electric vehicle (EV) stock is oversold on relative strength, moving average convergence divergence, and Williams %R. It is also sitting at double bottom support. From a current price around $13, I’d like to see shares of NIO run back to $22.50 with several catalysts. For one, President Biden wants at least 50% of all new vehicles to be electric by 2030. In fact, to help with that, the Biden Administration is investing $3 billion to spur domestic production of EV batteries.
EV Sales Have Been Explosive
My second reason to consider Nio is that EV sales have been explosive. In the U.S. alone, 200,000 EVs were sold in the first quarter of the year. Plus, as noted by Elektrek contributor Frederic Lambert, “We are starting to see a significant increase in EV adoption over the last year, and this last quarter was particularly important for EV adoption in the United States.” Better, companies like Volkswagen (OTC:VWAGY) are selling out of EVs in the U.S. and in Europe. According to the company, this is all because demand is higher than expected. Volkswagon has a backlog of 300,000 EV orders just in Western Europe.
Nio Delisting Fears are Overblown
Third, while delisting fears are popping up again, I’m not too concerned. Deutsche Bank (NYSE:DB) analyst Edison Yu believes the pullback on delisting news is overblown. He added that, “‘nearly all Chinese ADRs will be included’ on the list after filing their 2021 annual reports and that Chinese and U.S. regulators are negotiating on a resolution,” as quoted by Investor’s Business Daily. “We continue to expect some sort of formal agreement this summer and would be buyers of NIO and XPEV on any pronounced weakness from delisting headlines.” Plus, we have to consider Nio is working to comply with the rules of the Public Company Accounting Oversight Board.
Four, Nio just started delivering its new smart electric sedan, the ET7. Additionally, the company is also expected to start deliveries of its ET5 in September. Even better, it has plans to be in more than 25 countries worldwide by 2025. Plus, according to Chairman and Chief Executive Officer William Li, “We are confident about the road ahead.” Again, once market carnage cools down a bit, I’d use weakness in NIO as opportunity.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
