Nio, the electric vehicle maker, is set to unveil its first battery-swapping station in Denmark on February 15th, a development that has caused Nio’s stock to rise by more than 1% as of this writing. The location of the station is near the highway and fast food shops, making it a convenient pit stop for drivers. Despite its initial public offering (IPO) price of 2018, Nio is now trading closer to that price point, but it has a big selling point in the ability to swap out batteries and maintain driving range. This feature is essential for Nio to gain traction in the European market against its rivals, such as XPeng and Li Auto. Nio launched in several new European markets in October 2022 through a ”Nio Subscription” lease, which translates to about $1,300 per month based on current exchange rates. We continue to be optimistic about Nio and believe that it is well-positioned to surpass its deliveries from last year, especially as China’s economy reopens and the company expands its operations overseas. Despite a decline of around 13% since our note in December, we think Nio is a favorable rebound investment opportunity as it expands to Europe with its Battery-as-a-Service (BaaS) program. We believe that Nio’s current valuation is attractive, and we recommend investors interested in entering the EV market to buy into Nio. The stock has a sell-side median price target of $17 and a mean of $18, which represents a potential upside of 65-77%. Wall Street shares our optimistic view, with 26 of the 31 analysts covering the stock rating it as ”buy,” and the remaining five rating it as ”hold.” While Nio’s fans hope for a massive breakout in the stock price, it’s important to note that the company’s vehicle deliveries in January 2023 were lower than in the same month last year and December 2022, and it’s also branching out into the highly competitive smartphone market, with mixed reactions to its upcoming NIO Phone. Therefore, it remains to be seen if Nio will make a splash in this market or if its stock price will experience a significant breakthrough anytime soon.
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