Is NIO Stock a Buy or Sell? Here’s My Call.
Did a rough 2022 make you afraid to invest in China-based electric vehicle (EV) manufacturer Nio (NYSE:NIO)? Don’t be fearful, as NIO stock could turn a corner this year. As we’ll discover, Nio is making smart and bold moves — not only with the company’s vehicles but also in EV battery technology and beyond.
Last year wasn’t as bad for China’s EV industry as many people probably think it was. The China Association of Automobile Manufacturers reported that EV sales nearly doubled in China last year and reached a record high.
Without a doubt, Nio contributed to China’s EV boom of 2022. The company’s momentum should persist in 2023, and you can still get exposure to Nio’s continued growth while the share price is low.
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What’s Happening With NIO Stock?
When I called the NIO stock price “low,” I wasn’t exaggerating. Nio shares once traded at $60 apiece, but they’ve fallen to $11 recently.
That’s quite a discount, but is it justified? Bear in mind, Nio’s December 2022 EV deliveries increased 50.8% year-over-year (YOY). For the full year of 2022, Nio’s vehicle deliveries grew 34% YOY.
Already, we’re starting to develop an idea that NIO stock is undervalued. Next, we can factor in Nio’s forward-thinking foray into next-gen EV battery technology. Specifically, the company has forged a five-year agreement with battery maker Contemporary Amperex Technology.
Together, Nio and Contemporary Amperex Technology will work to create a battery supply system “with efficiency and synergy and improve innovation capabilities and efficiency based on advanced battery technology.” It will be exciting to see what the two companies come up with and how their new battery technology might change the game for the global EV industry.
Nio Is Moving Beyond EVs and Batteries and into Smartphones
It’s a bold move, to put it mildly. According to a report from GizmoChina, Nio applied for a trademark for a smartphone, to be called the Nio Phone.
Thus, the Nio Phone is past the rumor phase and well into the likely-to-happen phase. That’s not all, though. Reportedly, CEO Li Bin stated that his company plans to release “a new smartphone every year.”
The very first iteration of the Nio Phone might actually be released later this year, and it’s expected to cost under $1,000. Only time will tell, however, whether these details turn out to be accurate.
Nio already has strong brand-name recognition in China and elsewhere. Could the Nio Phone be a big hit and a major revenue generator? I’m optimistic, at least for now, and I’m eagerly awaiting more details from Nio.
So, Is NIO Stock a Buy or Sell?
Nio definitely looks like an undervalued company as its EV delivery growth is undeniable. Also, it’s encouraging to see Nio being proactive in helping to advance leading-edge EV battery technology.
Granted, the Nio Phone could be hit or miss. Still, it adds interest and anticipation to an already ambitious automaker and battery-tech developer. Therefore, NIO stock is a buy in my book, and investors should consider the potential for 2x or greater returns in 2023.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
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