Nio (NYSE:NIO) has been executing fairly better than some of its peers. This is all the more evident when we go over the hiccups some of the U.S. startups face when they transition from pre-revenue to commercialization stage.

Rivian (NASDAQ:RIVN), for one, launched its R1T electric pickup truck well ahead of market leader Tesla (NASDAQ:TSLA), which is still working on its own version of the same. Rivian started off well but had to experience the pangs of going through mass production. It came back to notably slash its production forecasts for 2022.

On the other hand, Nio has a track record of decent volume performance. The company’s premium electric vehicles have won significant mind share among Chinese customers. The Shanghai-headquartered company has been innovative with its services offerings and has managed to shore up enough cash reserves to keep operations ticking.

Granted the company trailed some of its smaller peers in 2021. Analysts were rooting for an inflection higher in 2022. But that was not to be, as macroeconomic uncertainties and geopolitical tensions have served as spoilsports.

Is Nio still a buy at current levels?

Nio Recuperating From Covid-19

At the start of the year, Nio investors were hopeful that a turnaround is in the cards, thanks to the strong launch slate planned for 2022. This is a fair expectation because the company had blamed some of the softness seen in 2021 on the disruptions stemming from preparing the production line for new product introduction.

Nio started 2022 with a fairly decent deliveries performance in January. Seasonal softness in February that encompasses the weeklong Spring festival holiday dragged deliveries for the month. At least this was excepted.

Then something unexpected unraveled. The Russian-Ukraine war on February 24, threatening the global order. Raw material prices soared and components were in short supply. Nio reacted with more than one round of retail price hikes for its vehicles.

A grave threat emerged in late March, as Covid-19 resurgence in China prompted the government to impose stricter lockdowns. EV makers and their suppliers had to shut down factories, severely impairing production.

China began lifting the curbs only last week. Reports suggest operations at Nio’s Shanghai are back to pre-Covid-19 levels. Nio said in its May deliveries report that it is “gradually recovering” from the Covid-19 impact. The company also outlined efforts underway to return production to pre-Covid-19 levels.

NIO plans to further ramp up the production capacity to a higher level by working closely with supply chain partners and to accelerate the delivery recovery starting from June, in light of the recent supportive developments in the COVID-19 situation and the strong order inflow.

Nio Stock Has Credible Plan In Place

The EV maker kept up with its late-March timeline for the launch of its first-ever sedan model, named ET7. Sales of this model increased from 693 units in April to 1,707 units in May. The second new model — a new SUV named ES7 — could be released any time soon. The company has apparently received clearance from Chinese regulators to sell the model in China.

A budget sedan model, named ET5, that was unveiled at the Nio Day 2022 held in January could drive in during the second half.

All these point toward a big pickup in volume. Nio’s vehicles are currently manufactured by its partner JAC at a plant in Hefei. The company has a new plant coming up at NeoPark, also situated in Hefei. This is supposed to have an annual production capacity of 1 million EVs and 100 Giga-watt hour of battery capacity.

With raw materials evolving as a major issue for EV makers, Nio has taken baby steps toward vertically integrating. The company is reportedly planning for lithium-ion battery labs and battery pilot production line in Shanghai.

The company is also likely to receive support from regulatory tailwinds, as China is contemplating extending EV subsidies beyond 2022.

On the flipside, as of now, the demand outlook isn’t very promising, as consumers tighten their purse strings amid the uncertainties. All this could change with the abatement of the pandemic. Pent-up demand is likely to set in motion a flurry of buying. Nio’s European foray presents an optionality for investors to partake in the opportunity overseas markets present.

Macroeconomy and geopolitics now remain overhangs. When things improve on these fronts, there could be no looking back for Nio.

Nio Stock Valuation Is Too Attractive To Ignore

Outlining the strategic direction of the company, Nio’s chief executive officer William Li said the company can break-even or reach profitability by the full-year 2024. Until such time, Nio can be valued only based on its revenue.

Nio stock is currently trading at a multiple of 5.08 times its 2021 sales. This compares to 12.9 for Tesla and a ridiculous 170.54 for Rivian.

The underperformance is partly attributable to the general negative sentiment toward U.S.-listed Chinese stocks amid delisting fears. Nio has mitigated the risk by pursuing secondary listings both in Hong Kong and Singapore.

BofA Securities analyst Ming Hsun Lee recently upgraded Nio stock from “neutral” to “buy.” The analyst premised his positive view on expectations of margin and volume improvement in the second half of the year and also the valuation that appears to have priced in all the negatives.

The average analysts’ price target for Nio stock, according to TipRanks, is $41.09, suggesting over 100% upside from current levels.

On the date of publication, Shanthi Rexaline 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.