Nio (NIO)
NIO Stock Soars on Rumors of Potential Billion-Dollar Cash Infusion Source: Carrie Fereday / Shutterstock.com The Short: At the forefront of China?s luxury EV market, which will rapidly grow over the next decade.
The Long: At the risk of sounding like a broken record, the bull thesis on NIO stock also breaks down into three parts.
First, EVs are the future of global auto transportation. This is mostly due to a shift in consumer preference for socially and environmentally positive products and services. But it?s also supported by government incentives, improved EV technology, expanded EV charging infrastructure, and lower EV price points.
Second, the China EV luxury market will be huge at scale. That?s because Chinese consumers have a propensity for luxury items (they are expected to account for nearly 50% of global luxury good spending within the next few years). EVs will be no different. Just as Chinese consumers are the fuel behind the market for $1,000 handbags, they will also be the fuel behind the market for $100,000 EVs.
Third, in China?s huge EV luxury market, there will be some favor for the home-grown product, both by consumer choice and government force. Nio is the undisputed, home-grown leader in China?s luxury EV market.
Net net, Nio could follow a Tesla-like growth trajectory over the next decade to rise by several hundred percent.
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