China is an attractive market for EV investors. The global EV sales are expected to reach 6 million units in 2021. China alone is expected to account for over 2 million units.
Some investors are skeptical about investing in Chinese stocks. Considering some developments in China in the next few years, it looks reasonable. If you've already considered that risk in your portfolio, it's a good idea to buy Nio stock.
Nio is in a competitive market.
China is a leading market for EV's. Nio competes with established players, as well as newer entrants, including Li Auto and XPeng. Nio faces competition from legacy automakers, including Volkswagen and General GM, which are looking to capture a portion of the fast-growing Chinese EV market.
BYD sold 90,546 electric vehicles in China in November, compared to 10,700 by Nio. In November, the company sold over 50,000 EV in China.
There is a lot to like about Nio.
Nio has delivered more than 156,000 electric vehicles so far, with 80,940 delivered in the next two years. The company's recent sales growth shows a strong demand for its vehicles.
The revenue from the NIO was quarterly. Data by YCharts.
Nio is a top player in terms of revenue and growth. BYD only derives half of its revenue from vehicle sales. Nio has some key factors that differentiate it from its competitors.
Nio's innovative battery-as-service model allows users to swap batteries of their EV with new ones at any of the company's 700 battery swapping stations. If they are short of time to replenish their batteries, users can swap them quickly. They can swap a battery for a bigger or smaller one. More than 5 million battery swaps have been done by Nio so far.
Nio is launching two new models: the luxury sedan and the mid-size sedan. The company will launch a third model in 2022, but it hasn't been revealed yet. Not many of its competitors are planning to launch many new models. The upcoming models are expected to be among the best in their segment.
Renminbi is a monthly subscription for driving updates. Both have different battery options, from a 75 kWh standard range battery to a 150 kWh battery which can go over 600 miles on a single charge. In March and September, the deliveries of the seven are expected to begin.
The image is from Nio.
The price of the ET5 model is around $51,500 while the price of the ET7 is around $70,300. The two new models are expected to get a positive response from customers. The stock's price could go up in the new year.
Is Nio a good investment?
Nio is trading at a forward price-to-sales ratio. That's similar to its peers. Nio's ratio improved from 10 in January to 11 in January.
The PS ratio isForward 1y. Data by YCharts.
BYD stock has a price-to-sales ratio of around 3. The price-to-sales ratio is useful for comparing Nio's valuation to that of its peers. A lower ratio is better.
Nio stock looks better valued than the stocks of U.S. EV companies, such as Rivian or Lucid, which have only delivered a few hundred vehicles so far.
European markets are being targeted for expansion by Nio. It started deliveries in Norway in September. Nio can meet global quality standards if this expansion succeeds.
Nio has been growing its sales. Its upcoming models, international growth plans, and innovative offerings position it well for long-term growth. Nio stock is appealing right now because of growth prospects and a relatively attractive valuation.
