Nio (NYSE:NIO) stock has been a high-flyer in recent days, soaring more than 11% as investors priced in tail winds from excellent delivery growth in April. The Chinese EV company outperformed other EV manufacturers, with 15,620 deliveries. Delivery numbers increased by 134.6% YoY and 31.64% from March.
The EV company has again shown resilience, but is the stock worth investors’ attention and confidence? Let’s dive in.
Excellent Delivery Growth
Nio currently offers eight car models, including five SUVs and three sedans. The most recently announced ET9 sedan will start its deliveries in Q1 2025.
From January to April, Nio has delivered over 45,000 vehicles, showing a 21.15% increase year-over-year. Moreover, as of April, Nio reached 495,267 units delivered since its launch, nearing its goal of 500,000 units to be delivered.
NIO stock has continued to outperform in recent sessions, outpacing the moves seen in the S&P 500 and Nasdaq.
Compared to competitors, Nio is performing well, and its recent deliveries growth acceleration speaks to a potential bifurcation building among certain. Chinese EV names.
Ongoing Trials on Solid-State Batteries
Aside from strong deliveries numbers, Nio’s focus on semi-solid-state battery packs is worth considering. This is a high-growth potential sector for investors looking to own a slice of the future of battery technology.
Removing the liquid substrate from battery development could lead to much faster charging batteries that are safer and carry more range.
Nio appears to be a key player in the development of such batteries, which means the company could benefit from a broader trend in this space, rather than being viewed as a niche manufacturer.
The company recently announced it introduced its new battery technology to the Chinese market, with a full rollout planned after May. These semi-solid-state packs will be accessible to customers throughout May 2024 on Weibo.
This move will boost NIO stock as users test the new tech, potentially driving its climb. Nio’s innovative approach aims to prove resilience against larger automakers.
Be Careful with NIO Stock Right Now
Nio has seen an impressive surge recently, and this momentum may propel certain investors to step into this name.
I think NIO stock is one of the most difficult to assess right now. On the one hand, China’s EV market is impressive, and analyst expectations for Nio to produce 18% revenue growth to $9.1 billion over the next year makes the stock look like an interesting bet on a price-sales basis (investors are paying roughly 1-times forward sales).
That said, for those looking to build a position, I think dollar cost averaging in may be a better move than diving in with both feet. We’ve seen the sort of momentum that can build around Chinese stocks over long periods of time. It’s not clear to me that this downtrend is broken just yet.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
