Chinese EV disruptor Nio (NIO) has made significant inroads into the notoriously challenging EV market, which is currently dominated by established giants such as Tesla (TSLA) and BYD (BYDDF). To drive home the point, NIO recently posted fresh sales figures, showing that its broader up-trend is only intensifying rather than petering out. NIO shares closed at $6.38 last Friday with expectations for an intense trading session when traders get back to their desks tomorrow, after today’s Labor Day holiday.
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With 10,575 deliveries in its first whole month, the ONVO L90 set a new record as the company’s fastest model to exceed 10,000 units, the company said.
According to Nio, it delivered 31,305 vehicles in August this year, comprising 10,525 cars from its premium, innovative electric vehicle brand and 16,434 vehicles from its family-oriented ONVO brand. Furthermore, Nio said it had delivered 4,346 FIREFLY vehicles, representing the company’s most high-end product offering currently in operation.
In total, Nio reported that its cumulative deliveries reached 838,036 in August, thereby setting a new company record, according to the company.
With vehicle deliveries climbing, all eyes are now focused on Nio’s earnings report, set to be published before market open. Analysts expect Nio to report a reduced loss of $0.31 per share, compared to a $0.36 loss in June. Notably, NIO’s stock price has risen 81% since its last earnings announcement.
Nio’s recent streak of solid results—driven by rising vehicle sales—is beginning to challenge territory long dominated by Tesla and BYD. According to the latest data, Tesla delivered about 384,000 vehicles in the April–June quarter, while BYD sold roughly 380,000 in June alone. While both companies currently produce nearly ten times as many cars as Nio, scale alone doesn’t necessarily make them more compelling investments.
New Products Set to Attract More Buyers
Nio isn’t resting on its laurels and has launched an entire fleet of cars aimed at attracting new buyers. The EV giant launched new models, including the ES6, EC6, ET5, and ET5P, with expectations of increased deliveries later this year. To sweeten the deal for potential investors, vehicle margins have increased to 10.2% from 9.2% in the previous year, while overall gross margin improved to 7.6% from 4.9% year-over-year.
Whether a broad array of new vehicles can sustain Nio’s success so far is still unclear. However, judging by the EV maker’s previous track record of delivering what consumers want, its new models should be value-accretive for shareholders rather than serving as an anchor (in the form of poor feedback and reputational damage) that drags down the company’s success stories, like ONVO.
Is NIO Stock a Buy, Hold, or Sell?
According to a consensus of Wall Street analysts, NIO stock carries a Moderate Buy consensus rating based on four Buys, five Holds, and one Sell assigned in the past three months, as shown below. After a 53% rally over the past year, the average NIO price target of $5.01 per share implies 21% downside potential.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
