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Nio soars ahead of Nio Day and as Q4 deliveries beat estimates

Chinese electric vehicle maker Nio’s share price soared over 10% on Monday (04 January 2021), after it posted better-than-forecasted Q4 deliveries.

Source: Bloomberg
  • Nio’s (NYSE: NIO) share price shot up to as high as US$53.69 earlier this week
  • The rally came after the electric vehicle (EV) maker reported a 121% year-on-year increase in deliveries for December 2020
  • Bank of America analysts believe other potential stock catalysts include the company’s upcoming Nio Day and last month’s US$3 billion capital raise
  • Looking to trade Nio shares? Open an IG account today.

Nio share price: What’s the update?

Chinese EV manufacturer Nio’s share price has rallied over 10% since the year began, thanks to its stellar fourth quarter results.

The automobile stock soared as high as US$53.69 on Monday (04 January 2021) - its highest price in over a month.

Shares have since continued to trade around that price level, closing at US$53.20 on Tuesday (05 January 2021).

Nio’s share price burgeoned over 1,100% in 2020, outperforming other EV players like Tesla (+740%) and Li Auto (+105%).

New monthly record set in December 2020

Earlier this week (03 January 2021), the company reported that it delivered 7,007 vehicles in December 2020, a new monthly record that represented a 121% year-over-year growth.

Across the fourth quarter of 2020, NIO delivered 17,353 vehicles, representing an increase of 111% year-over-year. This surpassed the higher end of the company’s earlier quarterly guidance.

As of 31 December, 2020, cumulative deliveries of the ES8, ES6 and EC6 reached 75,641 vehicles, of which 43,728 were delivered in 2020.

Reflecting on the results, William Bin Li, founder, chairman, and chief executive officer of NIO, said:

‘These results are attributable to the growing recognition of our premium brand, the competitive and compelling products and services, the expanding sales network, and most importantly, the continuous support from our passionate and loyal user community.’

Separately, Nio also launched a new used car service in China called Nio Certified on the same day. Nio is planning to pump roughly US$460 million over the next five years into the service, which is dedicated to buyers of used Nio cars.

How do analysts rate Nio?

As of 06 January 2021, nine out of 15 analysts have rated Nio a ‘buy’, four called it a ‘hold’ and two gave a ‘sell’ recommendation, according to Wall Street Journal data.

Bank of America analyst Ming Hsun Lee maintained a ‘buy’ call on Nio last Thursday (31 December 2020) while raising his price target to US$59 from US$54.70.

In his note, Lee reduced his net loss estimates for Nio through 2022, citing the company’s recent US$3 billion capital raise as a key factor. He also pointed to the Nio Day, taking place on 09 January 2021, as another major share price catalyst.

Daiwa analyst Kelvin Lau initiated coverage on Nio with a ‘buy’ rating and target price of US$59 on 14 December 2020.

Lau predicts that Nio will be able to post a non-GAAP profit in 2023 alongside a sales volume of 140,000 vehicle units. He also referred to Nio as the ‘distinguished premium’ battery EV maker in China.

Meanwhile, Deutsche Bank analyst Edison Yu believes that Nio is part of a ‘Fab Four’ grouping of Chinese EV makers (including XPeng, Li Auto and WM Motor). He believes these four automakers are ‘increasingly destined to conquer’ the Chinese car market, and expects ‘multiple winners’ to emerge in the new electric vehicle ‘world order’.

How to trade Nio with IG

Are you feeling bullish or bearish on Nio’s stocks?

Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <Nio Limited> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

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