Please ensure Javascript is enabled for purposes of website accessibility

Why Nio Shares Are Starting the Year Moving Higher

By Howard Smith – Jan 3, 2022 at 11:13AM

Key Points

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Nio had a strong finish to the year in terms of vehicle shipments, but there's another sign of better things to come.

What happened

The American depositary shares of Chinese electric vehicle (EV) maker Nio (NIO 2.46%) started off 2022 with a pop. The shares gained nearly 7% on the heels of the release of December delivery numbers by the company as well as its competitors. That early rise settled back to a gain of 3.6% as of 10:32 a.m. ET. 

So what

Nio reported 10,489 vehicle deliveries in December 2021, representing a jump of 50% compared to the prior-year period. For the full year 2021, Nio delivered more than 90,000 electric vehicles, which was 109% more than the company shipped in 2020. And its peers also reported strong numbers, showing that demand continues to grow. 

Gold colored ET5 electric sedan.

Nio plans to begin shipping its new ET5 sedan in September. Image source: Nio.

Now what

Chinese competitors XPeng and Li Auto also reported a strong end to 2021. Both, in fact, delivered more vehicles in December than Nio. 

Year-over-year December delivery volumes for XPeng and Li increased 181% and 130%, respectively. But that growth also indicates market demand is growing, which should benefit all the suppliers. Nio currently only offers SUV models, but that is about to change. 

The company will begin shipping its first sedan, the luxury ET7, this March. And that will be followed up by the smaller, and less expensive, ET5 in September. The fact that market demand appears to be strong and growing bodes well for Nio as it expands both its offerings and its geographic market. 

Nio moved into Europe by establishing its business in Norway in 2021, and plans to be selling vehicles in Germany and other European countries during 2022. Investors liked what they saw out of Nio as well as its peers moving into the new year. If it executes its expansion plans successfully, Nio appears to have a solid runway for continued growth. 

Howard Smith owns NIO Inc. The Motley Fool owns and recommends NIO Inc. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.