Elon Musk Takes A Potshot At Nio's Rally: '420 Is Ten Times Better Than 42'
Nio Inc – ADR (NYSE: NIO) has gained about 39% this week, taking the year-to-date gains to over 950%. After going past the psychological barrier of $30 late last week, the stock moved above the $40 level Wednesday.
$420 Vs. $42: Tesla Inc (NASDAQ: TSLA) CEO Elon Musk shrugged off the astronomical gains in his own inimitable way in a tweet by suggesting the $400+ level at which Tesla is trading is far more than Nio's $42+.
420 is ten times better than 42
— Elon Musk (@elonmusk) November 6, 2020
At end of Wednesday's session, Tesla shares were up 4.06% at $438.09, while Nio ended 12.30% higher at $42.35. By virtue of the recent gains, the Chinese EV maker has achieved the distinction of being the seventh most valued automaker, pushing behind it the likes of General Motors Company (NYSE: GM) and Bayerische Motoren Werke ADR (OTC: BMWYY).
Related Link: Which EV Stock Will Grow The Most By 2025?
Why It's Important: Nio and Tesla are rivals in the Chinese EV market, with the latter taking the fight to the camp of homebred companies by setting up the Giga Shanghai, which manufactures the Model 3 vehicles locally.
EV penetration in China is set to ramp significantly over the next 12 to 18 months, and if Tesla continues its upward trajectory in China, it will be a "game changer" for its EV penetration story over the next decade, Wedbush analyst Daniel Ives said in a July note.
Nio Loyalists Hit Back: Pro-Nio Twitterati were quick to respond by suggesting Musk's comment was in bad taste.
"We'll get there. Don't worry," one suggested. Another suggested the tweet was out of jealousy:
He is talking about $NIO, getting jealous. Anyway, his tweet is a good indicator for us traders. He showed us where to invest.
— Koffi Boris Ayi (@BKA1202) November 6, 2020
Benzinga's Take: Nio has emerged as a contender in the EV race. The company is constantly improving and innovating – a dynamic that is very essential to stay relevant in the auto industry. If Musk and Tesla choose to ignore the up-and-coming rival, then it should be at their own peril.
Photo Courtesy: Steve Jurvetson on Flickr.
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