Could Buying Nio Stock Today Set You Up for Life?

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New (Nyse: nio) It has been a volatile stock since the public subscription in 2018. Chinese car maker for electric cars on the basis of $ 6.26 per share, and it rose ten times to a record level of $ 62.84 during the purchase madness in MEME shares in February 2021.

However, to write these lines, NIO shares are traded by about $ 5 per share. The Bulls retreated while its delivery operations were calm, its margins decreased, and very slope losses fell. Can you get some stocks from this unpleasant stock without the public subscription price in preparing it for life?

NIO's EVE ConCEpt. — NIO’s EVE ConCEpt. Photo source: NIO.

NIO produces a wide range of electric sedans and SUVs. It distinguishes itself from its competitors with its switching batteries, which can be quickly replaced in its battery exchange stations as a faster alternative to the traditional hewings.

NIO delivered its first cars in 2018, and the annual delivery operations increased by 11 times from 2019 to 2024. But after more than doubling the annual delivery operations in 2020 and 2021, the delivery operations slowed in 2022 and 2023 where it was struggling with the supply chain restrictions, the most stringent competition, and Chinese economic slow.

metric	2019	2020	2021	2022	2023	2024
Delivery	20,565	43,728	91,429	122,486	160,038	221,970
Growth (Yue)	81 %	113 %	109 %	34 %	31 %	39 %

Data source: NIO. Yue = year on an annual basis.

NIO’s annual vehicle margin, which reached a standard level of 20.2 % in 2021, also reduced to 13.7 % in 2022 and 9.5 % in 2023 with pricing force declined. Its annual loss is more than four years from 2021 to 2023. All these challenges – along with commercial tensions and high interest rates – led to the removal of bulls.

Two years after slowing growth, NIO growth accelerated in delivery operations again in 2024. Its business stabilized with the growth of its share in the market and expanded in Europe.

This recovery was driven by its stable sales from ET Sedans, ES Suvs, and EC Rubsoves, as well Timing‘s (Nasdaq: tsla) The Y, but it starts from only 149,900 yuan ($ 20,646). It also continues to expand throughout Europe even as it faces a higher tariff on Chinese EVS throughout the region.

But despite this pressure, the margins of the quarterly vehicles in NIO settled in 2024, increasing 9.2 % in the first quarter to 12.2 % in the second quarter and 13.1 % in the third quarter. It is expected that this number will rise again to 15 % when his profit report is published in the fourth quarter on March 21. It attributes that the recovery to the costs of low materials and its increasing sales of premium vehicles (including Et7 Extrication Sedan) in China, which greatly compensates for the average selling prices.

Last December, Nio Firefly, a built -in electric hatchback targeting smaller car buyers like BMW‘s (OTC: BAMXF) Mini, with a start price of only 148,800 yuan ($ 20,495). It also intends to launch the bridal in Europe this year, and it can localize some of its production to the European Union in the future to meet the definitions.

Assuming that the delivery processes and vehicle margins in NIO continue to rise, analysts expect their revenues to grow at an annual CAGR growth rate by 30 % from 2023 to 2026, as it approximately with approximately a clear annual loss. NIO will not make a profit anytime, but it is still supported by the Chinese and had $ 6 billion in cash and its equivalent at the end of the last quarter.

With the value of an institution of 76.9 billion yuan ($ 10.9 billion), NIO is still trading less than 1 times its expected sales of 97.6 billion yuan ($ 13.5 billion) for 2025. By comparison, Tesla trades at 6 times its expected sales for 2025.

NIO reviews are likely to be pressed through continuous tensions between the United States and China, high tariff threats, and concerns about the EV cooling market. But if these pressures reduce NIO increasing its business, it can be re -evaluated. Series of growth again and offering multiple adult gains from their current prices.

So, although it is too early to know whether NIO can “prepare you for life” in the long run-which is not likely for any one share-a highly dangerous and highly used play for Bold investors may be. NIO has not proven that its business model is sustainable or that it could generate consistent profits, but it is an attractive arrow if you expect commercial tensions and the EV market.

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Liu Sun is not a position in any of the mentioned shares. Motley is a lie that has positions in and recommends Tesla. Motley Fool Bayerische Motaren Werke Aktiegesellschaft. Motley Fool has a disclosure .

Can NIO shares today prepare for life? It was originally published by Motley Fool

2025-03-16 22:54:00

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