Nio (NYSE:NIO), the Chinese electric vehicle (EV) company that has become a barometer for EVs and China’s economy in general, is rising again. Recent concerns about China’s economy have caused NIO stock to suffer, but delivery news is boosting the stock this morning.
Shares rose 3% overnight after the company reported delivering 10,055 vehicles in January, up 18% from a year ago. That topped XPeng’s (NASDAQ:XPEV) 8,250 but trailed hybrid maker Li Auto’s (NASDAQ:LI) 31,165.
The market leaders remain BYD (OTCMKTS:BYDDF), Huawei’s Aito, and Tesla (NASDAQ:TSLA), which all showed strong growth.
To EV or Not to EV
American and European automakers are still awaiting Chinese EV imports, with Nio the tip of the spear. CEO William Li has been loudly condemning American protectionism, which could lead to a broader trade war.
Nio needs to succeed in EV exports because it has already invested heavily in them. Its battery swap technology costs a lot of money to set up. The company still has just 30 centers for it across Europe. KPMG expects Chinese brands to capture 15% of Europe’s EV market by the end of this year.
American automakers, meanwhile, are seeing encouragement in Li’s growth. Its battery-first hybrids deliver the combination of size, luxury, and range American buyers expect. General Motors (NYSE:GM) is moving to hybrids instead of going straight to EVs.
Ford (NYSE:F) is trying to stem losses on its big EVs. Nio suffers losses on the same scale as Ford but is moving ahead. It has delivered a total of 459,649 EVs and has the capital to get into the $25,000/car market.
But Nio investors are suffering for its exuberance. The stock is down 31% just this year, thanks to worries about China’s economy. Shares are down 53% over the last year and peaked at nearly $15.50 each last August.
NIO Stock: What Happens Next?
The industry is still bracing for a flood of Chinese EV exports this year. That wave will only grow in 2025 as Nio and other brands start selling EVs that cost just $25,000.
As of this writing, 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.
