Consistently strong deliveries of electric vehicles underline the electric vehicle boom. For Nine (NYSE:NINE), the outlook looks brighter than ever. The nine-share has both an upward future and a great future.
Nine had strong delivery figures and is ready to build its market share in China. Plus, companies like General Motors (NYSE:GM) increases its investments in EV.
This further confirms Nio’s competitive dominance as traditional carmakers catch up.
Investors have even more reasons to expect Nio’s growth to continue in 2021. Nio can also expand its lead in GM by considering global expansion plans in the past.
Strong EV demand lifts Nine stocks
Speculators are offering shares in mining companies in anticipation of declining battery supplies that will increase commodity prices. This is a potential indicator for the continued ones increased EV sales.
“The basic limit for electric vehicles right now is generally the total availability of cells, what is the production of factory cells in gigawatt hours,” said Tesla (NASDAQ:TSLA) CEO Elon Musk. “And you can not grow faster than that.”
So as Tesla’s production steadily increases, competitors will benefit from increased production.
Last month, China’s car sales increased by 25.7%. EV sales almost tripled by 281.4% compared to the previous year to 158,000 units. As a dominant brand in the region, Nio is likely to report continued sales strength for units during the quarter and the year ahead.
IN THE U.S, forecasts for record sales this year is good news for the Nio share. Edmund’s CEO for insights expects more EV models in the country. This is in addition to the massive growth in the supply of electricity units on the market.
Nio’s strength excludes the almost certain improved outlook as it moves into US markets. Because these plans are still one far down the roadInvestors can only imagine the total global revenue potential over the next few years.
To finance its expansion, Nine sold shares to raise cash several times. This raises their money at hand. In the short term, the company can reduce development costs while getting higher word of mouth sales in China.
Once profitable, Nio can invest its positive free cash by entering the US market.
Relieve tensions in the US and China
With a new democratic administration, trade tensions between the United States and China could be reduced. Relaxed policies, such as freer trade and lower tariffs, can encourage Nine and Chinese electricity producers to enter the US market.
Li Auto (NASDAQ:LI) and XPeng (NYSE:XPEV) is also flush with cash. If any of the companies are considering the US market, Nio must follow suit. Nine face geographical risks by limiting themselves to the Chinese market. For example, the government may issue stricter rules. It can also change their incentives. Last year, China cut its new electricity vehicle support with 10%.
On Wall Street, Nio’s latest rating comes from Deutsche Bank. The $ 70 price target is above the $ 65 average (per Tipranks). Sharp readers can now crack a real value model for Nine stocks. In a five-year discounted cash flow model, Nio must book revenue that grows by at least 55% by the year 2024. In this scenario, Nine shares are worth almost $ 60.00.
A look at the charts and your takeaway
In the diagram, Nio gets better quality than XPEV or LI. Currently, the market sets a higher market capitalization for Nine than the other two.
Investors still need to watch out for Xpeng and Li Auto which offer better design or better technology. Nine will need to protect their moat in the future.
At present, its battery replacement program provides its customers with convenience. They do not have to wait for charging stations.
The leasing service also lowers the unit prices of Nio EVs and increases its affordable prices.
Nine traded as low as $ 2.11 just as the pandemic developed in China. Bears then speculated that it would file for bankruptcy. Now that China is the only country that has full control over preventing the pandemic, customers are ready to spend.
EVs are a hot “must-have” item that will only gain in popularity. The rest of the world will follow to embrace the EV revolution.
Disclosure: At the date of publication, Chris Lau had (neither directly nor indirectly) any positions in the securities mentioned in this article.
Article printed from InvestorPlace Media, https://investorplace.com/2021/02/nio-stock-prospects-keep-looking-better/.
© 2021 InvestorPlace Media, LLC
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