Electric vehicle (EV) stocks have been getting battered for the last several months following a massive rally in late 2020. While there is little doubt that EVs represent the future of the auto industry, that revolution will take decades to play out due to long upgrade cycles and the relatively slow pace of technological innovation in areas such as battery development or charging speeds.

Cathie Wood's ARK Invest has rose to prominence thanks in part to being a longtime Tesla bull and EV advocate. Several of ARK's actively managed ETFs have been investing in various EV stocks, and ARK Autonomous Technology & Robotics (ARKQ -2.34%) just bought more of booming Chinese EV company Niu Technologies (NIU -7.95%).

Niu E-scooters

Image source: Niu Technologies.

Here's why Niu should be on your radar. (I have no personal relationship with the company despite my last name, which is the same Chinese character that the company uses.)

A modest addition

ARK sends out a daily email notification disclosing its trades, which is a unique practice for funds since institutional investors typically prefer to keep that type of information close to the chest. The company's daily disclosures from Monday and Tuesday shows that ARK Autonomous Technology & Robotics scooped up an additional 90,964 shares of Niu so far this week.

That was the first time in many weeks  that the ETF bought more Niu stock. The purchases appear to be a minor reweighting than any major shift in portfolio strategy. As of Tuesday evening, the fund was holding just under 2 million Niu shares.

Riding the e-scooter wave in China

Primarily targeting the Chinese market, Niu develops a range of electric scooters that are ideal for urban micromobility. China has become the biggest  EV market, including both passenger vehicles as well as scooters, thanks to a range of supportive government policies designed to promote EV adoption. Niu is capitalizing on the boom, posting strong growth in unit volumes as consumers snap up e-scooters.

Market

2019 Volume

2020 Volume

YOY Growth

China

392,459

572,154

46%

International

28,867

28,738

0%

Total

421,326

600,892

43%

Data source: Niu Technologies.

Revenue jumped 18% in 2020  to reach $374.6 million, and Niu is already profitable with $31.9 million in adjusted profits last year. Total volumes in the first quarter  skyrocketed by 273% to reach nearly 150,000, driven by retail network expansion in China as well as increased marketing. Earlier this month, Niu introduced  a handful of new models, including its first electric kick scooter that the company also hopes to sell in the U.S. and Europe.

Niu expects total unit volumes to jump by another 50% to 83% in 2021 to reach a range of 900,000 to 1.1 million units.