Dear NIO Stock Fans, Get Ready for a Big European Catalyst

  • Nio (NIO) stock is in the spotlight as the company gets ready for an important step forward.
  • The Chinese firm is about to enter Germany’s electric vehicle (EV) market.
  • Oct. 7 marks the scheduled launch date for the new venture.
NIO booth showroom in Shanghai Pudong International Auto Show. Car exhibition and vehicle promotion. Auto business and economy staff with mask coronavirus period
Source: Andy Feng / Shutterstock.com

Nio (NYSE:NIO) finally has some good news after a highly turbulent quarter. Today, EV reported that an internal memo confirms the Chinese electric vehicle (EV) producer will launch in Germany on Oct. 7. After weeks of market volatility amid delisting concerns, this is welcome news for investors. NIO stock is still falling 4% today, but this new European expansion could be the catalyst it needs to pull back into the green.

August 2022 has been a rough month for NIO stock. Shares surged multiple times, only to fall just as quickly again. While its declines of around 5% for the month could be much worse, the stock has still shed more than 40% year-to-date (YTD).

That said, NIO stock has also remained a favorite among some Wall Street analysts. Despite consistently poor performance, MarketWatch indicates that 29 analysts rate shares as a “buy.” That number has increased over the quarter. Currently, no analysts tracked on either MarketWatch or TipRanks rate Nio as a “sell.”

Now, this Germany expansion promises to boost NIO stock. Here’s what investors can expect.

What the Germany Launch Means for NIO Stock

This isn’t Nio’s first foray into Europe. Back in September 2021, the company launched the NIO ES8 in Norway. The company promised that, by the end of 2022, it will have constructed 20 Power Swap stations throughout the country. That’s a goal it appears to be on track to meet. However, now expanding into Germany offers Nio a chance to gain share of a booming, much larger EV market. Germany is Europe’s biggest auto market.

In Germany, EV demand is rising steadily. Data from Statista shows that its market share for both battery-powered EVs and plug-in hybrids is increasing. Further, the Bloomberg Electric Vehicle Index Country Breakdown indicates that the country is the world’s third-largest EV market, with a global market share of 11%. Germany trails behind just China (34%) and the United States (28%).

All of this points to an excellent opportunity for Nio in a fast-growing market. Now is an opportune time for the company to explore international expansions. As InvestorPlace contributor Dana Blankenhorn reports, EV sales in China may be slowing. Plus, Chinese EV firms like Nio are forced to compete in a home market dominated by Tesla (NASDAQ:TSLA).

Blankenhorn advises bullish investors to pay close attention to Nio’s operations in European markets. Because Chinese companies have made U.S. investors nervous this year — due to government pressure and delisting concerns — that would be a wise course of action.

The Road Ahead for Nio

Even before news of the company’s German expansion, experts were highly bullish on NIO stock. Baillie Gifford recently purchased 7.98 million shares of Nio. The stock is now the firm’s eighth-largest holding.

More recently, another large-scale investor took a hefty position in the company. EV reports:

“According to a 13F/A-1 form filed earlier today, Goldman Sachs added a total of 5,056,875 shares in the EV manufacturer NIO increasing its position by 20.54% during the second quarter of the year.”

Moving forward, investors should watch Nio closely as it gears up to launch in Germany. If the company can successfully gain market share, it may be able to rival Tesla in terms of EV market dominance. NIO stock will also likely rise as the launch draws closer, making now a potentially ideal time to load up on shares.

On the date of publication, Samuel O’Brient did not hold (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.

Samuel O’Brient has been covering financial markets and analyzing economic policy for three-plus years. His areas of expertise involve electric vehicle (EV) stocks, green energy and NFTs. O’Brient loves helping everyone understand the complexities of economics. He is ranked in the top 15% of stock pickers on TipRanks.


Article printed from InvestorPlace Media, https://investorplace.com/2022/08/dear-nio-stock-fans-get-ready-for-a-big-european-catalyst/.

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