what happened
Shares of NIO (NYSE: NIO) increased by 1,110% in 2020, according to data from S&P Global Market Intelligence. The Chinese electric vehicle (EV) business has skyrocketed thanks to signs of incredible momentum and long-term growth potential for the industry.
NIO data by YCharts
Momentum was built for NIO shares amid signs that the Chinese government would make a powerful impact to switch the country to electric vehicles. The company also showed strong delivery numbers for vehicles, and its monthly delivery updates last year showed impressive growth for the business.
Image source: NIO.
Approximately
NIO delivered 7,007 vehicles in December (121% higher than year-on-year), bringing the company’s total delivery to 43,728. Its delivery equipment for 2020 represents an annual increase of approximately 112.6%.
Government subsidies for EV buyers helped accelerate the growth of the industry in China, and contributed to a significant momentum for NIO. Purchasing subsidies were also linked to performance measures consistent with reduced pollution, and NIO vehicles generally performed well in the relevant categories. However, the Chinese Ministry of Finance recently reduced subsidies for 2021 by 20% in response to signs of improved organic acceptance for EVs, and it remains to be seen how this could affect momentum in the short term.
Now what
The NIO share continued to rise in early 2021. The company’s share price has risen about 12% so far in January.
NIO data by YCharts
China has a population of about 1.4 billion people, providing only a responsible market for NIO on its domestic market. The EV market has expanded even faster in China than in the US, and there is still a large runway for growth. However, investors should also keep valuations in mind – as well as the likelihood that an influx of competition could limit growth opportunities for industry leaders who make explosive equity gains.
NIO has a market capitalization of approximately $ 84.6 billion and is valued approximately 18 times this year’s expected sales.