Among one of the key factors that will affect its trajectory is the production capacity of NIO.
One of the key metrics is the production and delivery of vehicles, which is expected to reach 20k deliveries per month by 2023 and there should be further growth to 30k deliveries per month by the second half of 2023.
The reopening in China will help to address some of the shortages of raw materials in the industry.
Given China is one of the key markets for the EV supply chain, NIO is in a good position to tap into the recovery of the reopening of the Chinese market.
As NIO is targeting the premium segment, the company is also less affected by rising costs.
Rising nationalism in China could also benefit local brands such as NIO as compared to US rivals like Tesla Inc (NASDAQ: TSLA).
More Chinese companies to benefit from China reopening
The market is moving ahead in anticipation of the shift away from the COVID-Zero policy in China.
However, I believe that investors should be more cautious in the current volatile market and uncertain macroenvironment.
In my view, Apple and NIO, which are leaders in their respective industry, could offer substantial upside and are less exposed to the downside risks.
Apple continues to dominate in the smartphone industry and its growing services revenue will help to cushion the slowing demand for new smartphones.
Meanwhile, NIO is the leading premium EV player in China and will benefit from China’s ambition for EVs to make up 40% of new cars sold by 2030.
Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.
Billy is passionate about the capital market and believes in investing for the long haul. Prior to this, he was an economist at RHB Investment Bank, covering Thailand and Philippines market. He also worked as a financial journalist at The Edge Malaysia and has experience working with an asset management firm. Aside from the capital market, Billy loves a good conversation over a cup of coffee, is a fitness enthusiast and a tech geek.