NIO Stock Has Some Strong Catalysts Going For It in 2022

Chinese premium electric vehicle (EV) maker Nio (NYSE:NIO) hasn’t had a smooth 2021. NIO stock was once trading at the highs of $60 and is down to $30 today. Nothing has gone wrong with the company but the overall investor sentiment has led to the sell-off. There are also several concerns associated with Chinese regulations and this has had an impact on NIO stock.

It was trading at $14 in July 2020 and doubled in October 2020. The stock then hit $54 in November 2020 and saw the best days in the early months of 2021. However, the highs didn’t last long and the stock started falling since March 2021. It hit $33 in May and soared to $53 in June 2021 and fell back to the lows of $30 since then.

Nio has consistently impressed investors with the solid quarterly delivery numbers. Despite rising competition, Nio is walking with pride and is on the way to leading the EV industry. I have always been a fan of NIO stock and I am of the opinion that it could hit the all-time high again in 2022.

The company has already started the year on a strong note. With that in mind, let’s consider two reasons to invest in NIO stock.

The Future of the EV Industry Is Bright

The global electric vehicle market is expected to reach $802.81 billion by 2027, at a growth rate of 22.6%. The highest contributor to the industry in the Asia-Pacific region, followed by Europe and North America. The Asia-Pacific market is expected to reach $357.81 billion by 2027 at a compound annual growth rate (CAGR) of 20.1% and North America is estimated to reach $194.2 billion by 2027.

As countries continue to move towards fuel-efficient and low-emission vehicles, the demand for EVs is only going to rise. Meanwhile, in tandem with the rise in market demand, technological advancements and government initiatives will boost the growth of EV makers in the coming years.

Nio’s battery as a service model holds an advantage here and it could attract users who are looking for low-cost EVs that promise high performance.

Exciting Model Lineup

Nio is launching the ET7 sedan this year which will be followed by the ET5 compact sedan. There is also speculation that we will see even more new vehicle models this year. There is a lot of excitement surrounding the ET7 and the car will enter the German market soon.

My InvestorPlace colleague David Moadel believes that the ET5 will spark Nio’s recovery.

The ET7 will be Nio’s first model that will be sold in Germany. The company’s ES8 SUV is already sold in neighboring Norway and might make its way to Germany soon as well.

Nio has seen high interest from several potential users, particularly in the European markets.

If the company introduces new models in the coming year, it will be able to attract a larger customer base and increase revenues. Nio has already entered the Norwegian market and it will soon plan to enter other European countries this year. The company has already doubled the production capacity at their plant in China to 240,000 vehicles a year. This will allow the company to reach its full potential and the margins are expected to pick up soon after.

The Bottom Line On NIO Stock

Besides the strong operating numbers and impressive deliveries, Nio is working towards the expansion of its market and this will push NIO stock higher. I believe Nio has the potential to beat the rivals with its product line and the battery as a service.

An HSBC analyst Yuqian Ding has raised their price target of NIO stock to $54 with a Buy rating after the company reported strong delivery numbers for December and announced new models at the NIO Day event. The analyst thinks that new models in this year could boost the volume growth.

Nio has already set the stage for 2022 and I believe it will report strong revenue numbers in the quarterly results. This will help NIO stock recover in the coming two months.

On the date of publication, Vandita Jadeja 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.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long-term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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