search instagram arrow-down

Does Nio Have a Future?

Nobody really knows, but how much of a future will ultimately depend on Chinese consumers. The possibilities will come down to price and quality. If Tesla’s expansion into China is successful, Nio will have serious competition. All that could change, of course, if Nio can scale and continue to deliver a good product.

Tesla ushered the era of electric automobiles and Nio represents China’s latest attempt to be a serious player in the sector. I bought the stock last month on the premise that Nio was the cheaper alternative to Tesla in China. Tariffs or no tariffs the company was already selling cars to Chinese consumers. People got spooked after the IPO because the trade war was dominating the news, but those fears are starting to dissipate.

At the end of the day, the Chinese can’t help feeling a sense of urgency when it comes to dominating their domestic market. That’s why I buy these high risk stocks. You never know who is going to be the next Alibaba. When I saw Nio’s CEO, William Li, on 60 Minutes, the guy looked like a Silicon Valley entrepreneur, lean and mean, and eager to pitch his latest creation. This seems to explain the recent move in the stock. It does not, unfortunately, guarantee anything.

Disclosure: Long NIO

Leave a Reply
Your email address will not be published. Required fields are marked *

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: