Is Nio Stock the Buy Opportunity of a Lifetime?

 | Apr 17, 2024 03:04AM ET

Is Nio Inc Class A ADR (NYSE:NIO) the opportunity of a lifetime?

Although NIO's recent performance may seem disappointing, it is important to evaluate the company's performance in relation to the entire electric vehicle sector.

For example, the S&P Kensho Electric Vehicles index has declined 7.2 percent over the past year. In addition, major electric vehicle companies by market capitalization have suffered significant declines in value, thus showing that NIO is not the only one affected.

And in fact, NIO's decline is not even the worst, with Rivian (NASDAQ:RIVN) suffering an even more drastic drop.

Although the outlook may seem bleak, I have confidence for the future of NIO. One example is the fourth-quarter figures for 2023, in which the company's actual revenues increased by 7.2 percent, exceeding the forecast of $2204-2289 million.

If this trend were to be repeated in the first quarter of 2024, NIO would see a 4.8 percent increase in revenues instead of a contraction.

There is good news on the way for NIO, in addition to the success of the quarter just ended. CEO William Li recently unveiled their innovative new long-life battery pack with a special 14-hour event.

Now, mass production of this pack has officially begun and should become available for purchase as early as next quarter.

To make the purchase of their ET5 sedan more affordable, NIO has decided to offer the battery pack only in rental mode. However, customers also have the option of buying the car without the battery pack, making it a cheaper option and increasing the company's competitiveness.