Could NIO Stock Be A Better Buy Than Tesla?
The stock market started in 2021 with a bang, with electric vehicle (EV) stocks climbing to new heights. With legendary household names like Tesla (NASDAQ: TSLA) climbing to new heights, it’s understandable that most attention will be on the largest EV manufacturer. After a 695% run in 2020, it’s easy to think that Tesla is the best performing EV stock you can find in the stock market today. Last week, we saw Elon Musk overtaking Jeff Bezos as the world’s richest person. Besides, Tesla also surpassed Facebook (NASDAQ: FB) in terms of market capitalization. Therefore, all attention is on the world’s largest EV maker. But there’s something happening over the weekend that could be equally exciting.
If you are an EV stock enthusiast, it’s almost impossible for you not to have heard of Nio (NYSE: NIO). Dubbed the ‘Tesla of China’, the company revealed its first-ever EV sedan model that could very much prove its competitiveness with its long-range battery. Some of you may have watched the live presentation on NIO Day. Perhaps you found it rather long-winded. Or even rather amusing as there were many irrelevant performances. But let’s not let those dances distract you from the real deal. As of 8.13 a.m. ET, NIO stock is up 10.2% during its pre-market trade. And that’s while the broad market seems to be going in the opposite direction.
Nio’s latest EV model, ET7 claims a driving range of 1,000 kilometers. If the claim holds up, that would truly be a game-changer. We will have to see when the vehicle comes on the road next year. In comparison, XPeng’s (NYSE: XPEV) P7 has a range of 706 km while Tesla’s Model S can do 652 km. The reason Nio stands out from the pack has to do with the company reaching a milestone in its growth. If you are keen on learning more about what the company has to offer, read on.
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Solid Deliveries Growth Make A Bullish Case For NIO Stock
As we finish a year like no other, Nio heads into 2021 with EV sales soaring. Recall Nio manufactured more than 5,000 vehicles in October 2020 for the first time in any month. And that came with upgraded protection line capabilities. Nio started the year on a strong note by reporting monthly record deliveries of 7,007 units in December 2020, ending the year with a total delivery of 43,728 units.
Since then, the company saw its stock make further gains in the run-up to NIO Day. Now that the company has delivered its first sedan model, it could potentially pull in an entirely new audience. If you really believe that Nio is the ‘Tesla of China’, would you say that the ET7 would benefit NIO stock as much as the Model S has benefitted Tesla? With the new battery pack and its notable ‘Battery-as-a-Service’ program, the idea of it challenging Tesla is not too far-fetched, isn’t it? Would a new sedan from Nio bring great value to NIO stock shareholders?
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Nio Partners With NVIDIA On Next Gen EV Tech
Apart from flexing its new battery pack, Nio announced that it will be partnering with Nvidia (NASDAQ: NVDA) for its autonomous driving technology. Nio said it will use Nvidia’s DRIVE Orin system-on-a-chip for its new generation of electric and autonomous vehicles. Nio’s Adam supercomputer will use four Orin SoCs for advanced automated driving. The Orin is the world’s highest performance autonomous driving and robotics processor. By using four of these, the system will be able to deliver the redundancy and diversity necessary for safe autonomous operation. The system is a major milestone by Nio. What’s more, these AI-driven capabilities will be upgradeable overtime after purchase. That’s just like your phone’s operating system.
“Autonomy and electrification are the key forces transforming the automotive industry,” said Jensen Huang, NVIDIA founder, and CEO. “We are delighted to partner with NIO, a leader in the new energy vehicle revolution—leveraging the power of AI to create the software-defined EV fleets of the future.”
“The cooperation of NIO and NVIDIA will accelerate the development of autonomous driving on smart vehicles. NIO’s in-house developed autonomous driving algorithms will be running on four industry-leading NVIDIA Orin processors, delivering an unprecedented 1000+ TOPS in production cars,” said William Li, Founder, Chairman, and CEO of Nio.
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Bottom Line For NIO Stock
Nio has had a successful year in 2020. And you could expect the company to continue its strong momentum into 2021 and beyond. With China being the largest consumer market for EVs in the world, huge financial support from the government is only one part of the equation. Now, with the company’s new sedan, a bigger battery, and a new driving technology, there are so many reasons to be excited with NIO stock.
Despite the monstrous run-up and stretched valuations, there’s a great chance NIO stock could continue its remarkable performance in the week ahead. With so many resources under its belt, it has all the reasons to expand its lineup. Also, the company plans to introduce a new model each year going forward. This will no doubt boost Nio’s sales in the years to come as the demand for EVs increases. With the company’s long growth runway going forward, will you consider having NIO stock in your portfolio?