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Nio is optimistic over the new year

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It is nothing new that Tesla’s stock has been very volatile lately due to the controversy generated by Elon Musk and the acquisition of Twitter.

The high levels of controversy and turmoil, and the low confidence of specialists in Musk to take over two companies at the same time caused several investors to sell Tesla shares. However, this situation not only affected the company itself, but also its market.

As the U.S. company’s shares fell sharply, the electric vehicle market was dragged down in the same way. Despite the fact that Elon Musk has nothing to do with the rest of the electric vehicle manufacturing industry, companies like Nio have had to pay the price.

Nio’s challenges

Nio Inc is a multinational company based in China, which is dedicated to the manufacture of electric vehicles.

During 2022, the company had to go through very complicated times. In addition to being affected by the behavior of Elon Musk and Tesla, the global context of the economy and the increase of the Covid-19 Omicron variant in China, have been critical factors for Nio’s downturn.

Over several weeks of the year, the company was forced to suspend car production due to the zero-COVID policy in the Asian country. For the fourth quarter, Nio drastically cut its delivery forecasts; through a press release they admitted that the company has “faced challenges in deliveries and productions, along with certain supply chain constraints.”

They were estimating deliveries between 43,000 and 48,000 vehicles, but they had to drop to a figure between 38,500 and 39,500.

It is true that the Chinese electric vehicle manufacturer suffered losses in the value of its shares; however, the company could have an “epic resurgence” in 2023.

Nio’s optimistic forecast

Against such a discouraging backdrop in Nio’s environment, the upcoming data release could be better than expected. The company was quite cautious and honest about its latest release. It presented its actuality clearly, without trying to make up a little to convince potential investors.

It is clear that Nio has not reached its “full capacity”, but everything can change for the year that has just started.

Nio announced and has the expectation that the electric vehicle models, EC7 and the new ES8, will “begin deliveries in May and June 2023, respectively.” Several of the planned 2023 launches could be solid competitors for Tesla models.

Despite the fact that in the short term Nio’s sales growth could slow down due to the current context, if everything goes according to plan, the Chinese company could even start offering a mainstream brand in 2024.

Should you bio NIO stock?

It seemed that this good news might encourage investors to buy Nio shares, but the opposite happened. 

With such positive announcements, the electric vehicle maker’s shares would have risen on a normal day. However, the giant wave of Covid-19 contagions in China caused Nio shares to fall. The good news is that the more Nio shares fall due to panic selling, the more attractive they begin to look to investors who want to get into the electric vehicle market because of the long-term potential.

In fact, Wall Street specialists rate NIO stock with a “Moderate Buy” rating. The average target price is $16.29, which implies a 63% upside potential.

With all these possibilities on the horizon, would you invest in NIO stocks? What do you think will be the effect of Musk and Tesla on the electric vehicle market?

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(Information in this post is for general informational purposes only. It cannot and should not be considered as suggestions or recommendations regarding investing or financial decisions.)

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