With China easing its Covid lockdowns and the supply chain issues being in the rearview mirror, Nio Inc. (NYSE: NIO) is starting the year with slow Q1 deliveries. Despite that, NIO is still confident in its 250,000 delivery projection by the end of the year. With multiple product launches, updates of older models and expansions in the European market, the company is hoping to accelerate its growth and achieve breakeven by 2024. In light of this, the NIO stock forecast could be bullish for the long term.
NIO Stock News
Already a top EV manufacturer, NIO has been gaining more interest from investors recently after announcing its December deliveries. In this announcement, NIO delivered 15.8 thousand vehicles – new record high monthly delivery. In this way, NIO was able to deliver more than 40 thousand vehicles in Q4 2022 – a 60% YOY increase. Despite these promising numbers, NIO was significantly impacted by supply chain constraints resulting from the Covid outbreak in China after easing lockdowns and disruptions in delivery and registration procedures involving users. As a result, NIO had to slash its Q4 delivery expectations from 43-48 thousand to 38.5-39.5 thousand.
Considering that the restrictions and lockdowns enforced by China have affected NIO and other EV manufacturers substantially, NIO stock forecast for 2023 appears to be bullish since China has eased these lockdowns. In this way, NIO could be set for a significant increase in production, allowing NIO stock to appreciate in value with more deliveries. For this reason, NIO stock could be one of the best-performing EV stocks in 2023 thanks to its vehicles’ capabilities.
On that note, NIO is currently planning to deliver 5 new vehicles based on its NIO Technology 2.0 platform while commencing the R&D of the NT3 platform in the first half of 2023. With this in mind, NIO has only shared two new EVs – EC7 and ES8 – which are set to be delivered starting May and June 2023 respectively. Through these efforts, NIO believes it could reach its milestones for 2023 and accelerate its deliveries in services in Europe. In light of these plans, NIO stock forecast appears to be bullish in 2023 and beyond considering its current PPS.
Known for its innovative technologies, NIO’s most prominent technology is its unique battery swapping technology which takes only 3 minutes to swap a fully charged battery. Another advantage of this technology is its ability to maintain the value of NIO’s EVs since the battery price represents more than 30% of the whole vehicle. In this way, NIO has a competitive advantage as its EVs would not be devalued as the battery is worn out. Based on this, NIO could be well-positioned to secure a significant share of the EV market once it ramps up production.
With the company’s deliveries growing rapidly, NIO has been actively building swap stations around the world. In 2022, NIO built 538 new stations of which 346 are located on highways. NIO is also looking to enhance swap stations and is currently working to deploy the third-generation battery swap station and 500kW ultra-fast chargers in March. The third-generation swap stations are expected to achieve more efficient vehicle-station coordination and are capable of performing up to 408 swaps per day.
Meanwhile, the 500kW ultra-fast chargers are capable of charging 400V models in 20 minutes and 800V models in 12 minutes from 10% to 80%. With this in mind, NIO has built more than 13.3 thousand charging piles – making it the automobile brand with the most charging piles in China. Despite this, NIO has plans to build more than 1700 battery swap stations and more than 20 thousand power chargers in China which could allow the company to attract more customers for its EVs. In light of this, many investors are bullish NIO stock forecast could be the brightest it has ever been as the company continues developing its technologies.
With this in mind, NIO is working to make Power Swap Pilot for Highway available in the first half of 2023. When Navigate on Pilot is enabled, NIO’s EVs can automatically plan the route for battery swap, navigate to the power swap station, complete the battery swap and automatically drive out of the service area and back to the highway. Thanks to this technology, NIO could be well-positioned to witness an influx of new purchases which could propel the company to new records in deliveries and revenues in 2023.
Although NIO is a top EV manufacturer in China, the company is looking to grow its popularity throughout the world and is currently working to penetrate the European market. In 2021, NIO launched its EVs in Norway – marking its entry into the European market – where its vehicles were well-received. Based on this, NIO has been working to expand its presence in Europe and currently offers its vehicles in Germany, the Netherlands, Denmark and Sweden. Looking to grow demand for its EVs, NIO intends to open new houses and spaces in 10 major European cities like Berlin, Frankfurt, Rotterdam, Copenhagen, and Stockholm. In this way, NIO could be poised to receive a significant boost in its revenues in 2023 – making NIO stock one of the most attractive EV stocks to watch this year.
With an aim of securing a significant share in the European EV market, NIO has been working to introduce its battery charging network in Europe. These efforts started with NIO’s deal with oil giant Shell to expand charging and battery swap stations in Europe and China. According to this deal, both companies will work in tandem to build 100 sites in China and build pilot battery swap sites in Europe. On that note, NIO intends to build 120 swap stations in Europe by the end of 2023 of which the company has successfully built 17 or 18 in 2022. However, NIO expects to build 1000 swap stations outside of China by 2025 – most of which will be in Europe. As the company continues working to introduce its EVs around the world, NIO stock appears to be bullish for 2023 and beyond.
*Updated May 16th, 2023
The Chinese EV maker’s deliveries have been slow of late because over the past few months, it has been transitioning all of its models to a second-generation platform, NT 2.0, and preparing its manufacturing lines to produce its upgraded 2023 models. NIO delivered 31,000 vehicles in Q1 2023, which is within the 31,000 – 33,000 projected range of the quarter. That was followed by NIO delivering only 6 thousand vehicles in April, dropping below the 10,000 mark that NIO operated above for two months. That may raise some questions about NIO’s ability to achieve the projected 250,000 deliveries target for 2023, Especially since NIO already missed on its projected deliveries in the latter half of last year.
Tesla (NASDAQ: TSLA) may pose a problem for NIO, as a price war is happening in the Chinese EV market. The American giant and NIO’s Chinese competitors are aggressively cutting prices while NIO is still selling its vehicles at a premium and refusing to cut its prices. This may affect NIO’s sales, which will make it harder for NIO to achieve its 250,000 delivery target.
With the upcoming Q1 2023 earnings release on Friday, June 9th, NIO is expected to achieve its estimated revenue of $1.58 billion to 1.67 billion, as it already achieved its delivery estimate for Q1. That being said, NIO is expected to achieve lower gross margins as it was burdened with the transition to NT 2.0 and the launch of new products. Last month NIO started deliveries of its coupe SUV EC7, which was launched in December, ahead of its scheduled delivery date of mid-May, and is expected to start deliveries of the 2023 ET7 in May. NIO’s new model 2023 ES6 SUV is also available for pre-orders and is expected to launch in May with deliveries to start later this year. Because of the new product launches, NIO is expected to achieve slightly better Q2 deliveries with stronger Q3 and Q4 deliveries driven by its new and its updated products.
NIO Stock Financials
Q3 Financials
Looking into NIO’s Q3 earnings, the company reported $13.6 billion in assets, including $2.5 billion in cash. At the same time, NIO has $8.9 billion in liabilities – of which only $1.7 billion are long-term debt. As for its revenues, NIO reported $1.8 billion in Q3 and had a gross profit of $243.9 million. Meanwhile, operating costs were $787.9 million – leading the company to operate at a net loss of $577.8 million. As the company’s supply chain situation could be significantly improved in 2023, NIO could be on track to deliver better results in the future.
2022 Annual Financials
In the 2022 annual report, NIO reported $8.5 billion in assets, including $2.8 billion in cash and cash equivalents. At the same time, NIO has $9.9 billion in liabilities – of which only $1.5 billion are long-term debt. As for its revenues, NIO reported $7.1 billion in 2022, a 33% growth YoY, and had a gross profit of $745 million. Meanwhile, operating costs were $3 billion, an almost 90% increase YoY – leading the company to operate at a net loss of $2.09 billion.
Media Sentiment
@NIOSanFrancisco is watching NIO in anticipation of a short squeeze.
@NIONenad believes NIO stock might soar to $100.
Technical Analysis
NIO stock is in a neutral trend with the stock trading in a sideways channel. Currently, NIO is trading above the 21 and 50 MAs, which are bullish indications, while it is trading under the 200 MA which is a bearish indication. Meanwhile, the RSI is approaching oversold at 64, and the MACD is neutral.
Fundamentally, NIO has two major catalysts approaching, which might move the stock significantly. The first catalyst is NIO’s May delivery numbers which would show whether the company is on the right track to reach its delivery target of 250 thousand sales. In addition, NIO’s upcoming Q1 earnings is a major catalyst as investors want to see whether the company is on the right track to reach profitability.
NIO may suffer a drop after its Q1 release due to the lower delivery numbers and the lower margins. If that happens, the stock might drop near the $7.35 support, which could be an intriguing entry point. In light of this, bullish investors could wait for NIO stock to retest its $7.35 support to enter their positions and take profits on the retest of the $8.38 resistance with a stop loss at $7 in case the stock breaks its support.
NIO Stock Forecast
NIO is one of the most exciting EV companies on the market right now. NIO is facing fierce competition in the EV market from other Chinese brands and a behemoth like Tesla. The Chinese EV maker is still confident in its ability to achieve steady growth, slowly expand outside of the Chinese market, and explore new markets in Europe. That and the ever-expanding EV market are all positive signs that NIO could be a big EV player in the future.
If you have questions about NIO stock and where it could be heading next, feel free to reach out to us in our free alerts room!
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