Nio (NYSE:NIO) is closing in on an eventful 2021, with 80,940 Electric Vehicles sold this year. However, Nio Stock has fallen to new lows not seen since October 2020. So why is Nio Stock dropping despite strong delivery numbers and multiple catalysts in 2022?
Nio Stock has fallen alongside majority of the Electric Vehicle and Tech Sector. This has been due to systematic risks arising including the spread of Omicron, US China conflicts and inflation concerns. These developments are deterring investors away from riskier investments.
Here’s everything investors need to know about Nio Stock in 2022, as we breakdown the catalysts exciting investors and key forecasts on Wallstreet.
Nio Stock: The ET5 and ET7 expected to disrupt the market in 2022
The big catalyst for Nio Stock next year is the release of the smart ET5 and ET7 Sedan. Both models are expected to shake up and disrupt the Electric Vehicle market share in China.
The ET5 & ET7 have enhanced battery technology while boasting elegant and high tech interior designs. Both models have long range edition that can stretch 1000km or 621 Miles in one charge according to the company. Lets breakdown each model individually and discuss why investors are hyped about their release.
When will the ET7 start deliveries?
The ET7 will be brought to the market on March 28, and is expected to dominate Nio’s EV sales in 2022. The China International Capital Corporation (CICC) reportedly sees NIO selling up to 70,000 ET7 models in 2022 alone according to a research report. However, Nio is yet to confirm any official delivery targets for 2022, understandably so with such high investor expectation both in the US and China.
The ET7 will be priced at $69,200 USD, suggesting Nio could generate over $4.8 Billion from the ET7 in 2022 if the reported CICC target comes to fruition. The ET7 will aim to directly compete with Tesla’s Model S, opening up a lucrative opportunity to steal vital Chinese market share. The high end price tag will make the ET7 compete in the luxury EV sub-market.
Nio opens up ET5 pre-orders ahead of 2022
The ET5 sedan model is expected to begin deliveries in September 2022. The mid-size sedan will be cheaper than the ET7, priced at USD$51,450 before Government subsidies and $40,470 for Nio customers with a battery subscription plan (BAAS).
The ET5 is more affordable than its previous models, and aims to challenge marketshare that the Tesla Model 3 currently dominates. The Model 3 currently has a base cost of $43,990, less than $10,000 cheaper than the ET5.
As Nio expands its product offering throughout Europe and boosts production capacity, we may see the ET5 margins improve and the price decrease. The sheer scale of Tesla’s production capacity and online sales has allowed their Model 3 to become one of the most price competitive Electric Vehicles on the market.
Morgan Stanley Reiterate Nio Stock Forecast for 2022
On December 21, Morgan Stanley analyst Tim Hsiao commented on NIO day and 2022 catalysts including the ET7 and ET5. Hsiao has been very active in the Chinese Electric Vehicle field, covering the likes of Nio, Xpeng and Li Auto.
The analyst noted that Nio Day was a “successful event”, highlighting important catalysts including the ET7 which begins deliveries on March 28, 2022. Nio also announced the pricing and delivery details surrounding the ET5 launch. Tim Hsiao has been a Bull on the Nio Stock Forecast for some time now, currently holding a price target of $66 a share.
However, with the current market conditions, the analyst noted Nio may need more catalysts in 2022 to see a resurgence in the Nio stock price. Potential catalysts include a resurgence of monthly sales or potentially “an operational breakthrough in the next few months”.
The analyst makes a good point because currently investors have exponetially high expectations for Nio, due to its popularity amongst investors and instituions. Overall, the Nio Stock Forecast for 2022 from Morgan Stanley analyst Tim Hsiao implies a 100%+ upside from the current trading price.
Nio Stock: Revenue Forecasts For 2022
One attractive aspect of high growth companies such as Nio, is the realisation of immense revenue growth. Between 2020 and 2021, analysts expect Nio’s revenue to grow by 120%. With one more quarter remaining in 2021, analysts expect Nio to generate $5.62 Billion.
Similarly, looking ahead into the 2022 forecast analysts expect Nio to generate $9.81 Billion, a 74% jump from the 2021 forecast. The most bullish forecast for revenues in 2022 expects NIO to generate $12.14 Billion based on Yahoo Finance Data.
What’s driving this sharp increase in revenues? Simply put, analysts forecast increasing demand for the ET7 and the ET5 alongside its flagship models already on the market. The EV industry is still in its infancy growth stage, and potential customers will continue to grow as we move towards an alternate energy future.
Across 15 Wallstreet analysts, 12 analysts have listed Nio Stock with a Buy Rating while 3 analysts have covered Nio with a Hold rating. The average price target from analysts currently stands at $65 a share according to MarketBeat data.
In 2021, Nio Stock is currently trading 40% lower after reaching all time highs in January. With the emergence of the Omicron variant, China US tensions and inflation concerns, the wider tech market is experiencing a down trend after a strong bounce back in 2020.
Summary: What to expect in 2022?
Overall, with the ET7 and ET5 arriving to the market in 2022 in the midst of a bolstering Chinese EV demand is a key catalyst investors are focusing on in 2022.
Furthermore, NIO is showing no signs of slowing on their delivery front with both models expected to challenge Chinese and potentially European market share with Tesla in 2022.
However, as highlighted by Tim Hsiao from Morgan Stanley, the high expectations from Nio investors may need more catalysts to recharge the stock. Furthermore, with high expectations it is essential for NIO to capitalise on Chinese market share and meet market arrival deadlines next year.
The content above is strictly for informational purposes only and is not financial advice nor does it constitute a recommendation. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.