It’s definitely risky to invest in China-based electric vehicle (EV) manufacturer Nio (NYSE:NIO). However, Nio is an intriguing automaker that’s boldly trying out battery-swapping stations even though Tesla (NASDAQ:TSLA) evidently has no interest in them. So, Nio’s audacious strategy could result in multi-bagger returns with NIO stock.
The idea here isn’t to let your entire account ride on Nio’s future success. Maintaining a reasonable position size — say, $1,000 — is crucial as Nio has hero-or-zero potential amid a highly competitive EV market.
That said, it’s worth betting $1,000 on Nio, because the company is willing to branch out and try new approaches. After all, Tesla’s bold strategies are what made the automaker a winner during the past 20 years. So, prepare for a wild ride as Nio goes all-in on EV technologies that might or might not succeed but definitely shouldn’t be ignored.
Nio Seeks to Enhance the EV Charging Experience
We’ll talk about battery swapping technology in a moment, but there’s another interesting development with Nio that should be addressed. Specifically, Nio announced a partnership with energy technology company Tibber.
This collaboration could greatly enhance the EV charging experience for Nio’s customers. Tibber, a Norwegian company, provides an energy usage tracking app that will be more familiar to European drivers than American ones.
With the Tibber app, Nio’s drivers can easily keep track of their energy usage. Plus, they can find energy prices in real time. Additionally, Tibber’s “Smart Charging” feature can help drivers take control of the charging of their EVs, with the goal of powering up at the lowest possible energy prices. It’s a brilliant concept that will hopefully gain traction, not only in Europe but in America and elsewhere.
Battery Swapping Stations Could Catalyze NIO Stock
Yet, an enhanced EV charging experience isn’t the only bright idea that Nio is road-testing. The automaker is also venturing into an EV concept that Tesla seemingly rejected but probably shouldn’t.
Reportedly, a spokesperson with Tesla stated, “the company believes electric vehicle charging is the best way to power its vehicles.” Furthermore, the spokesperson said Tesla believes “that battery swapping is riddled with problems and not suitable for widescale use.”
Tesla’s management may come to regret that stance someday. Compared to conventional EV charging, battery swapping could offer greater speed, convenience and possible cost savings.
Unlike Tesla, Nio is going all-in on battery swapping technology. Nio asserted unequivocally that it “will speed up the expansion of the battery swapping network” this year. Moreover, Nio already commenced a “trial operation” of “faster, more efficient battery swapping stations in China.”
Go Ahead and Bet $1,000 on NIO Stock
If Nio continues to pursue an ambitious strategy with battery swapping stations, the automaker may actually threaten Tesla’s dominance in the EV market. Also, Nio’s collaboration with Tibber is a savvy move that should increase customer satisfaction and loyalty.
Nio might succeed in these endeavors, or it might not. Still, it will certainly be exciting to see how the company’s bold ventures pan out. Thus, investors should consider taking a reasonably sized $1,000 position NIO stock. You could end up taking a loss, but 2x, 3x or greater returns are entirely possible during the coming years.
On the date of publication, David Moadel 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.
