![]() The company’s net loss for Q3 was narrower than expected, with its vehicle gross margins standing at 18%, compared with 14.5% in Q3 2020. The economics of Nio’s business is also getting better. The company is also expanding its product line, with its first sedan, the ET7, likely to begin deliveries as soon as the first quarter of next year, with two other models also in the pipeline for a 2022 launch. The company has indicated that it was looking to double the capacity of its plant in Hefei, China to 240,000 vehicles a year, with production likely rising to over 300,000 units with additional shifts. The production issues Nio faces are also likely to be transitory. ![]() Demand for EVs in China remains robust, with Nio indicating that it saw record levels of bookings in October. The longer-term outlook for Nio stock is also looking better. See our analysis on Nio Chance Of Rise for more details. So is the stock likely to decline further in the near term or are gains looking more likely? Based on our machine learning analysis of trends in the stock price over the last three years, there is a 61% chance of a rise in NIO stock over the next month (twenty-one trading days). So is the stock likely to decline further in the near term or are gains looking more likely? Based on our machine learning analysis of trends in the stock price over the last three years, there is a 59% chance of a rise in NIO stock over the next month (twenty-one trading days). Nio also said that its new ET7 sedan will start shipping in March 2022. The vehicle, which will start at about $40,000, is expected to go on sale sometime in 2022. ![]() The company unveiled a new mid-size luxury sedan called the ET5 at its Nio Day event held last weekend. ![]() That said, there have been a couple of positive developments for Nio over the last week, as well. Separately, the stock has also been weighed down for some time now by broader selling pressure in Chinese American Depositary Receipts after ride-hailing firm Didi Chuxing said that it would delist from the NYSE less than six months after going public, amid regulatory pressures. So what’s driving the recent sell-off? EV stocks, in general, were hit by the stalling of negotiations relating to the Build Back Better Act which had legislation that includes purchase-tax credits. listed Chinese premium electric vehicle maker Nio stock (NYSE: NIO) has declined by about 7% over the last week, considerably underperforming the S&P 500 which remained roughly flat over the same period. Check out our analysis on Nio, Xpeng & Li Auto: How Do Chinese EV Stocks Compare? for more details on how NIO stock stacks up versus its peers. Nio’s margins are also likely to pick up further with economies of scale improving. Nio is also expected to double production capacity at its plant in Hefei, China to 240,000 vehicles a year by mid-2022, and this could also help volume growth in the longer term. Last year, the company entered Norway and it plans to enter a further five European countries over 2022. Nio is likely to make more headway with its international expansion. Nio is expected to expand its model lineup this year, with the launch of the ET7 full-size sedan, followed by the ET5 compact sedan, and there is a possibility that we could see more new vehicles unveiled this year. The longer-term outlook is also looking good. Nio is likely to grow revenues by a strong 75% per consensus estimates, a bit below Xpeng but well ahead of Tesla, meaning that the lower multiple isn’t really warranted. The stock trades at under 5x projected 2022 revenues, well below the likes of Tesla which trades at around 15x projected revenue, and Xpeng which trades at almost 7x. Firstly, Nio’s valuation looks very attractive. That being said, there are multiple factors that could help Nio stock outperform this year.
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