2 Reasons Nio Is a Buy Now

2 weeks ago 16

Daniel Miller, The Motley Fool

Sat, Apr 26, 2025, 8:00 AM 4 min read

If you perceive to the wide communicative successful the automotive industry, it's a dire 1 that warns of highly affordable and precocious Chinese electrical vehicles (EVs) sweeping the globe successful dominating fashion. There's surely a batch of information to that narrative, but galore promising EV companies successful China are engaged battling themselves amid a brutal terms war.

Nio (NYSE: NIO) is included, and contempt the ongoing Chinese terms war, the institution has a mates of reasons for investors to stay optimistic.

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For galore investors, it feels similar a treble edged sword erstwhile it comes to Nio's artillery swap ambitions. On 1 hand, it gives the institution a unsocial competitory vantage since it has built retired a starring battery-as-a-service network. On the different hand, it's rather an costly endeavor for a institution burning currency arsenic profits stay successful the distance.

There are affirmative signs for the battery-swap strategy. Only recently, Nio saw request for these services spike to a grounds precocious 136,720 swaps successful a azygous time connected Feb. 3. The play from Jan 28 to Feb. 4 was China's New Year Holiday, with question peaking earlier and aft the dates. Between Jan. 22 and Feb. 5, Nio provided implicit 1.7 cardinal artillery swaps, a beardown 44% summation compared to the anterior year.

There are besides signs that its customers similar the enactment erstwhile they've tried it. During the antecedently mentioned clip frame, 83.2% of the powerfulness added by Nio users connected the road came from artillery swap stations. The adjacent amended news: This chunk of Nio's concern and superior expenditures could interruption adjacent by the extremity of 2026, according to a squad astatine Chinese brokerage Western Securities.

The occupation with Nio's artillery swap concern presently is that determination simply isn't capable measurement of swaps to make capable gross to screen day-to-day operations. According to Chief Financial Officer Stanley Qu, a artillery swap presumption tin interruption adjacent if it serves 60 to 70 motorists a day. That's precisely what should happen, according to the expert team. As caller brands and caller models ramp up successful accumulation and deliveries, much Nio users volition usage the artillery swap technology.

Nio has travel a agelong mode since launching the archetypal ES8 premium SUV successful 2018. The institution present sells a database of options nether its premium marque Nio, and began deliveries of its 2nd brand, Onvo, precocious successful 2024. Its 3rd brand, Firefly, is acceptable to statesman deliveries successful 2025 portion continuing to accelerate accumulation passim the year.