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Hype Asset of the Day | March 29, 2022

Updated: Mar 31, 2022



Nio Inc (NIO)


In recent years, few sectors have grown as rapidly as the electric vehicle (EV) industry. This is due in large part to a blend of innovation and the necessity of lessening our fossil fuel dependence. NIO is a China-based EV company that’s been drawing a lot of attention from investors due to impressive specs for its vehicles and new revenue models. Clearly, lots of eyes have been on NIO recently as mentions of this trending stock have increased by a massive 230%, showing buyer sentiment could be shifting bullish. The current share price of NIO is $21.20, down a massive 36.6% from 2022 highs.


Positives

  • Demand for NIO vehicles has been skyrocketing with the company enjoying a massive 109% increase in deliveries over 2021, rising to 91,429 across the year

  • Further evidencing the demand for NIO, the company’s 2021 revenue rose to$ 5.7 billion, an increase of 122% against 2022.

  • One unique part of NIO’s model is its ‘battery-as-a-service’ program that allows users to pay a monthly subscription for easily replaceable batteries and discounts rather than charging once they’re depleted. This provides NIO with dependable, high-margin monthly income.

  • In an innovative move from NIO, vehicle owners are able to switch out their batteries for a version with a different capacity based on their needs; a huge contrast to Tesla’s anti-self-service approach. Additionally, NIO is working to get charging stations outfitted across China in order to make the switch to electric easier for new customers.

  • Tesla is the largest EV company in the world and as such, its vehicles are the gold standard. However, NIO has recently announced two new cars, the ET7 and ET5, both of which offer a 621 mile range (when upgraded), beating out the Tesla’s Model 3 & Model S.

  • In part due to its battery-as-a-service program gaining traction, NIO’s gross margins for 2021 rose to 19%, a solid increase from the 11.5% it boasted in 2020.

Negatives

  • Despite an increase in demand for its vehicles, NIO’s deliveries failed to beat out the previous quarter, likely due to difficulty in attaining the required materials.

  • The EV industry is highly competitive and companies are fighting over parts. This leads to supply shortages, particularly for companies needing to conserve cash. Additionally, worries surrounding Chinese companies getting delisted from major exchanges has caused a lot of uncertainty around NIO’s future.

Hype Asset of the Day - Conclusion


Overall, NIO is an interesting stock with a lot of potential. The demand for its vehicles is high and only seems to be growing. Furthermore, the EV company’s ‘battery-as-a-service’ model provides consistent revenue and could shake up the sector somewhat. With the uncertainty around delisting being somewhat nullified the last hurdle for NIO seems to be material shortages. Once that’s resolved NIO seems primed to for its delivery numbers to go through the roof. If you’d like to hear about more trending stocks you can sign up for a premium plan or to find out more about the services offered by HypeIndex, check out our FAQ page.



HypeIndex is an AI platform that detects Hype in stocks and cryptos before it moves the market, providing reliable early detection for profitable investment opportunities.

The algorithm for our proprietary HypeIndex score is based on sentiment analysis, data science and machine learning.





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