Maybe the sector has been beaten too much, or that’s the role oil (now up to $100 a barrel) is playing in current geopolitical events, but EV stocks rose sharply over the month. last. While a number of traditional automakers like Ford and General Motors are down about 10%, many electric vehicle manufacturers are up about the same percentage or more.
Their race is not over, and the industry still has a long run to go as technology, production and capabilities begin to align for a sector that has grown in spurts over the years. While there are plenty of speed bumps ahead, as no industry revolution ever goes smoothly, the following EV duo still looks poised for a bull run.
Manufacturer of electric vehicles and fuel cell vehicles Nicholas ( NKLA -3.46% ) has taken its share of abuse, and it’s not all unjustified. But investors need to look beyond the past — even its recent history — and focus on what it can do in the future, and it still looks promising.
Or You’re here focuses on sedans and Rivian on pickups, SUVs and commercial vans, Nikola is now focusing on the semi-trailer market. It reached a milestone in December when it delivered four of its Tre semi-trailers to a customer. Trucks were evenly split between battery electric vehicles and fuel cell vehicles. The customer intends to buy another 100 from Nikola this year, and the electric vehicle maker says it will deliver between 300 and 500 in total.
That hasn’t stopped Nikola’s stock from falling 20% in 2022, even with its 13% gain in February. Still, with a multi-year supply deal with Proterra to power Nikola’s semis starting in the fourth quarter, the electric battery Tre qualifying for California’s incentive program, and multiple test orders from commercial trucking companies, Now it’s showtime for the electric vehicle maker.
Wall Street expects its revenue to skyrocket in the coming years, reaching nearly $5 billion by 2026, when it is also expected to become profitable. Given its still depressed stock market, investors might want to grab this bull by the horns now.
I’m still wary of investing in Chinese stocks, but you have to like the prospect of Nio ( NI -2.84% ) realize the new energy vehicle promise that Beijing wants to keep. Granted, production has slowed in recent months as global supply chain issues and computer chip shortages persist, but shipments continue to top year-ago numbers across a wide range of styles.
Nio just announced February deliveries were up 10% year-over-year to 6,131 vehicles, but that’s down from 9,650 EVs delivered in January and 10,500 vehicles in December. Most deliveries (54%) were of its ES6 premium smart SUV, followed by its EC6 premium coupe SUV and ES8. In total, Nio has cumulatively delivered over 182,800 vehicles by the end of February.
Nio should be ready to take off, especially once the industry-wide hurdles are cleared. It has upgraded its existing manufacturing plant, plans to bring a second plant online later this year and intends to be in five additional countries. Most promising of all is the launch of its battery-as-a-service (BaaS) subscription program where customers can upgrade or trade in their EV batteries. It is an innovative service that promises long-term revenue streams.
Nio’s stock is down 28% this year and nearly 60% from its 52-week high hit last summer, but analysts expect shares to at least double over the next the coming year, or even triple or even quadruple in value.
The stock has risen 8% in the past month, mainly on news this week of an upcoming secondary listing for the Hong Kong exchange, giving it a fallback option in the event of a US delisting. While this should give investors pause (note my reluctance to invest in Chinese stocks), I still view Nio as an EV stock poised for further upside.
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