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Is Nio Stock a Solid Long Term Investment?

Nio Stock

Electric vehicles are the future, and companies like NIO are forging the way forward. This company is invested in innovation and working hard to create intelligent and connected premium electric vehicles. While some companies are only focused on batteries, NIO is looking at the whole picture. If the entire IoT were a car company, it would look a lot like NIO. However, dreams and goals are not necessarily the same thing as accomplishments and market offerings. Is NIO stock a solid long-term investment? We'll take a deep dive into the company, so you know what to research if you plan to buy stock.

What Is Nio

NIO is a Chinese auto manufacturer whose focus is on figuring out the best way to make a fully connected electric car. Beyond battery power and smartphone plugins, NIO want's to add all the tech possible into these clever machines. Self-driving, artificial intelligence, lightweight frames and bodies, and next-generation technologies in connectivity are all part of what NIO is developing in its premium cars. According to, "NIO Inc. is a premium electric vehicle market. The company designs jointly manufactures, and sells smart and connected premium electric vehicles. It offers electric cars under EP9, EVE, and ES8 brand names." If you live in China, you can get Nio's entry-level sedan, the ET7, for a starting price of $58,500. A newer ET7 model should be available in late 2022. The current model year offers a three hundred ten-mile range with its seventy-kilowatt-hour battery. Regrettably, the NIO isn't available in the US or Australia, and there are no direct plans to ship them here at this point. Moreover, it's unlikely that they will have a US factory anytime in the foreseeable future. Intriguingly, NIO doesn't have manufacturing plants of its own. Instead, it contracts the work out to other businesses.

Historical Nio Value Trends

NIO stock's IPO was in September of 2018. While it's certainly not the oldest stock on the market, it has had some time to gain traction and develop trends. Had you purchased stock on the first day, you'd have paid less than ten dollars a share. Initially, the stock spent most of its time going downhill from there over the next two years. There was a brief high point where NIO went over ten dollars a share in March of 2019. However, that was as good as it got for some time. Yet, by July 10th of 2020, the stock was again worth more than any investor had yet paid for it, hovering around fourteen dollars a share. From that time until now, the stock has rarely dipped below forty dollars per share and never gone lower than roughly thirty-three. As of this writing, the value is sitting at thirty-nine per share. In short, it has more than tripled in three years, and it seems likely to continue to climb. However, there have been some significant dips and peaks in the relative price of shares.

Current Nio News

We hear a lot about TESLA here in the US, but NIO is making some rather impressive waves right now in the EV world. The ET7 sedan has impressed not only consumers but other EV makers. A recent surge in stock value made the news thanks to promising technology. Howard Smith of Motley Fool said, "What's good for the EV sector is likely good for Nio. And with XPeng releasing updates for its semi-autonomous driving technology, investors likely look forward to seeing what's next from Nio."

Should You Buy or Sell Nio Now

Mid-May and early October were the best times so far this year to buy NIO. However, it's always easy to see what might have been better in hindsight—doubtless, a lot of shareholders sold when NIO neared bankruptcy last year. Yet, the company bounced back. NIO has a lot of high-quality competition. Not only are there Chinese companies giving it a run for its money, but US-based TESLA is still the dominating EV company. Luckily, overall market performance is influenced by, but not based on, competition within the field. CNN Money offers the following aggregate data on the probable future of NIO stock, "...22 analysts offering 12-month price forecasts for NIO Inc have a median target of 58.65, with a high estimate of 91.89 and a low estimate of 17.19." Most forecasters seem to agree that this company is going to increase significantly in value. At the current price, investors could stand to lose more than half their money if the price dips down around seventeen dollars. However, the median is still an increase of around +48.77%, making this a more than likely 'win' over the next year. That is based on buying at today's price. You may want to buy it now.

Is Nio Stock A Solid Long Term Investment

The average forecast for NIO puts it over a hundred a share in the next few years. While there's never a guarantee, that's a pretty solid indicator that this is a reasonable risk. Assuming it works out as predicted and you buy soon, you'll make a substantial profit off a forty dollar a share investment if you are prepared to hold on to the asset for up to nine years.

Final Thoughts

NIO certainly looks like a solid long-term investment. Regardless of US sales, which may never be significant, this is one automaker setting achievable yet impressive goals and meeting them regularly. Every business has ups and downs, and any industry can suffer setbacks, but EV is here to stay, and NIO appears to be one of the industry innovation leaders. It is crucial to understand the risks of investing in the stock market and always do your own due diligence before investing. That said, NIO appears to be a solid long-term investment. In fact, it may be a good idea to get in before the stock prices go up much further since they look poised to do so.

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Allen Lee

Written by Allen Lee

Allen Lee is a Toronto-based freelance writer who studied business in school but has since turned to other pursuits. He spends more time than is perhaps wise with his eyes fixed on a screen either reading history books, keeping up with international news, or playing the latest releases on the Steam platform, which serve as the subject matter for much of his writing output. Currently, Lee is practicing the smidgen of Chinese that he picked up while visiting the Chinese mainland in hopes of someday being able to read certain historical texts in their original language.

Read more posts by Allen Lee

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