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Nio Poised to Grow, Despite Supply Constraints
Stock Analysis & Ideas

Nio Poised to Grow, Despite Supply Constraints

Nio (NIO) is ideally positioned to establish a solid long-term footing in China’s electric vehicle (EV) industry.

Increased use of electric vehicles, favorable government regulations, growing demand for Nio’s models, and plans to expand into new markets should all help Nio’s stock rise.

On the other hand, the company’s stock has remained relatively flat for the majority of 2021. The stock has been dragged down by macro issues like as continuing chip supply concerns, as well as pandemic and regulatory challenges.

As a result, the company has lost almost 34% of its value on a year-to-date basis. (See Nio stock charts on TipRanks)

Nonetheless, Nio’s recent delivery statistics show that the firm is addressing the supply issues successfully and is on track for healthy future development.

Delivery Numbers Indicate Healthy Growth

In September 2021, Nio set new records for monthly and quarterly deliveries.

The company supplied 10,628 automobiles in September, marking a year-over-year jump of 125.7%. For the third quarter, the company delivered a total of 24,439 vehicles, an increase of 100.2% year-over-year.

To add to the above, Nio finally joined the European market on September 30, with the debut of its ES8 model in Norway. Nio’s prospects of becoming one of the best EV stocks in the making should only grow if that model is welcomed there.

Nio intends to progressively expand to additional European destinations in the future.

Analysts Weigh In

Spelling out his bullish argument on the matter is Ming Hsun Lee of BofA Securities, who said that despite the supply chain challenges, Nio was able to post record statistics for September and the quarter.

He believes that the company’s focus on autonomous driving, powertrain, and charging solutions keeps it well-positioned for future growth. Further, Lee is positive about the company’s recent expansion in Norway, with its first batch of vehicle deliveries in the country.

Lee reiterated a Buy rating on Nio stock, with a price target of $64 (75.2% upside potential).

Lee is not the only analyst with a bullish outlook on Nio. On TipRanks, NIO has received six positive analyst reviews, for a unanimous Strong Buy consensus rating. The average NIO price target of $63.85 implies 80.5% upside potential to current levels.

Disclosure: On the date of publication, Shalu Saraf had no position in any of the companies discussed in this article.

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