Is it a good time to make a small investment in China-based electric vehicle (EV) manufacturer Nio (NYSE:NIO)? Skepticism abounds, but at least one expert on Wall Street has a positive outlook. Listen to what he has to say — and check out Nio’s revamped version of its popular SUV model — and you just might be convinced to take a $100 stake in NIO stock.
Don’t get me wrong — I’m not suggesting that anyone should over-invest in Nio. There are a number of headwinds to contend with, including the on-again, off-again Covid-19 lockdowns in China. Plus, there may be a global recession next year.
So, don’t go overboard even if you like Nio’s future prospects. That said, there are reasons to lean bullish on Nio, and perhaps to bet a C-note that the automaker will stage a recovery in 2023.
What’s Happening With NIO Stock?
It’s hard to admit this, but NIO stock has lost more than half of its value year-to-date. Clearly, 2022 hasn’t been favorable to China-based automakers. Yet, maybe there’s a deep-discount buying opportunity here.
Nio shares at $12 or less definitely look ripe for the picking. As Dana Blankenhorn explained, Nio is installing more battery swap stations in Europe. Impressively, Nio’s battery swaps can take place in approximately three minutes.
Let’s not get hung up on battery-swap capabilities, though. Nio’s bread and butter is vehicle sales. On that topic, it’s easy to imagine that Nio will sell a lot of its ES8 Electric SUVs, as these vehicles just got an awesome new look.
CarScoops revealed some photos of the revamped ES8 SUV, and they look sleek and ultra-modern but also quite compact. Apparently, this model will be equipped with lidar (laser technology for self-driving capability) and up to 631 horsepower.
Deutsche Bank Analyst Provides Reasons to Invest in Nio
Still not convinced? That’s fine, as Deutsche Bank analyst Edison Yu just gave the skeptics several reasons to lean bullish on Nio.
To begin, Yu forecasts Nio’s “delivery volume will ramp up considerably over the remainder” of December. Yu further assures that Nio’s guidance for fourth-quarter 2022 vehicle deliveries of 43,000 to 48,000 units is “very much achievable.”
Next, the Deutsche Bank analyst expects Nio to unveil revamped ES8 and EC7 SUV models (we just discussed the ES8 SUV) during the automaker’s upcoming Nio Day event, which is scheduled for Dec. 24. Yu predicts that these new vehicle models will “be well received by consumers.”
Finally, Yu is preparing to see “further encouraging news related to” China’s easing of Covid-19 travel restrictions. The analyst also anticipates “potentially a final resolution from the US PCAOB on the audit standards for China-based companies listed in the US.” These events, if they occur in the near future, would certainly benefit Nio and its stakeholders.
So, Here’s Why You Should Invest $100 in NIO Stock Now
Yu’s points are duly noted, and Nio’s new ES8 Electric SUV model looks great. What could possibly go wrong, then?
Actually, a lot can go wrong, because the global economy remains uncertain. Therefore, while it makes sense to invest in Nio, there’s no need to over-invest in the company.
So, feel free to buy $100 worth of NIO stock, sit back and see if Yu’s forecasts hit the mark. If so, then you might double your money or better — and if not, at least you haven’t lost a fortune.
On the date of publication, David Moadel 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.