Nio (NYSE: NIO) has been a wildly unstable inventory since its IPO in 2018. The Chinese language maker of electrical autos went public at $6.26 per share, and it skyrocketed tenfold to a report excessive of $62.84 through the shopping for frenzy in meme shares in February 2021.
Nevertheless, as of this writing, Nio’s inventory trades at about $5 per share. The bulls retreated as its deliveries cooled off, its margins shrank, and it racked up steep losses. May scooping up some shares of this unloved inventory beneath its IPO worth assist set you up for all times?
Nio produces a variety of electrical sedans and SUVs. It differentiates itself from its opponents with its swappable batteries, which might be shortly changed at its personal battery swapping stations as a sooner different to conventional chargers.
Nio delivered its first autos in 2018, and its annual deliveries surged practically 11-fold from 2019 to 2024. However after greater than doubling its annual deliveries in 2020 and 2021, its deliveries decelerated considerably in 2022 and 2023 because it struggled with provide chain constraints, more durable competitors, and China’s financial slowdown.
Metric |
2019 |
2020 |
2021 |
2022 |
2023 |
2024 |
---|---|---|---|---|---|---|
Deliveries |
20,565 |
43,728 |
91,429 |
122,486 |
160,038 |
221,970 |
Development (YOY) |
81% |
113% |
109% |
34% |
31% |
39% |
Information supply: Nio. YOY = 12 months over 12 months.
Nio’s annual car margin, which had reached a report excessive of 20.2% in 2021, additionally shrank to 13.7% in 2022 and 9.5% in 2023 as its pricing energy waned. Its annual web loss greater than quadrupled from 2021 to 2023. All of these challenges — together with commerce tensions and rising rates of interest — drove away bulls.
After two years of slowing progress, Nio’s progress in deliveries accelerated once more in 2024. Its enterprise stabilized because it grew its market share in China and expanded in Europe.
That restoration was pushed by its secure gross sales of its ET sedans, ES SUVs, and EC crossovers, in addition to the launch of its lower-end Onvo L60, which resembles Tesla‘s (NASDAQ: TSLA) Mannequin Y however begins at simply 149,900 yuan ($20,646). It additionally continues to increase throughout Europe even because it faces greater tariffs on Chinese language-made EVs throughout the area.
However regardless of that strain, Nio’s quarterly car margins stabilized in 2024, rising from 9.2% within the first quarter to 12.2% within the second quarter and 13.1% within the third quarter. It expects that determine to rise once more to fifteen% when it posts its fourth-quarter earnings report on March 21. It attributes that restoration to its decrease materials prices and its rising gross sales of premium autos (together with its ET7 Govt Version sedan) in China, which largely offset its decrease common promoting costs.