Nio (NYSE:NIO) will soon open its first battery swapping station in Denmark on Feb. 15. This news has NIO stock gaining this morning, with shares up more than 1% as of this writing.
According to a post on Twitter, the station will be located in Slagelse, about an hour away from Copenhagen. The highway location is close to fast food shops, making it an easy pit stop.
Shares of NIO stock opened on Feb. 13 at $10.47 and a market capitalization of around $17 billion. The stock hit its all-time high of around $62 two years ago. Now, NIO trades closer to its 2018 initial public offering (IPO) price.
NIO Stock: Swap and Lease
The ability to quickly swap out batteries and maintain driving range is a big selling point for Nio — and a necessary one for the electric vehicle (EV) maker to gain traction in the European market against rivals like XPeng (NYSE:XPEV) and Li Auto (NASDAQ:LI). The amount of electric cars sold in Denmark has only increased over the last few years.
Nio launched in several new European markets in October 2022 through a lease it calls a “Nio Subscription.” The price translates to about $1,300 per month based on current exchange rates. The subscription model is relatively new to Nio but fits with a business built on swaps and close customer contact. The company also sells the cars in its home market of China.
NIO stock has been dropping lately, after January deliveries fell short of estimates. For 2023, shares hit a peak high of around $14 on Jan. 24. InvestorPlace contributor David Moadel has suggested that investors wait for NIO stock to hit $15 before pressing the buy button. The $15 figure may indicate that large buyers are coming into shares. That could potentially take the stock back toward its all-time high.
What Happens Next?
Looking forward, Nio plans to launch new models this year and bring its prices in-line with those of market leader Tesla (NASDAQ:TSLA) as it ramps up production.
Currently, NIO stock sells at a discount to Tesla’s valuation. If it can meet production targets — and if its subscription model takes off in Europe — shares could prove to be a bargain.
The key word here is if.
On the date of publication, Dana Blankenhorn 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.
