Nio stock: Chinese electric car maker shares gain 1,000% in seven months
Since March, the stock has soared by more than 1,000% to $26.50. It gained more than 22% on Wednesday alone. And Wall Street analysts are again advising investors to buy into the company.
An injection of 7 billion yuan ($1 billion) in April by state-backed investors in the Chinese city of Hefei, where Nio recently set up a new headquarters, was critical in restoring investor confidence, said Tu Le, founder of Beijing-based consulting firm Sino Auto Insights. An uptick in vehicle sales and upgrades to its technology, including a smarter autopilot feature, also helped put the company on a steadier footing, he added.
Le described the investment as a “bailout,” a characterization Nio disputes.
“[Hefei was] not going to let Nio fail,” he said. “[Now] they don’t have that pressure of, ‘Where’s my next paycheck coming from?'”
But he said Nio’s rally may have been overdone, as “there haven’t been that many wins to point to that level of valuation.” (Nio is now worth more than $36 billion.)
“Some of it is, there’s just not a lot of good news in other sectors, so a lot of money is coming into EVs,” Le added.