Nio Will Dominate China's EV Market: Navellier

Tesla, Inc TSLA cancelled the Model S Plaid Plus, which was supposed to be equipped with Tesla’s innovative lower weight 4680 battery cells, which would provide longer range and more power, Louis Navellier, market strategist and founder of Navellier & Associates, said in a new note. 

Both Tesla’s Austin and Berlin manufacturing plants were supposed to also be making the 4680 batteries for new Tesla vehicles, he said, adding that he believes something happened to delay the batteries, which may lead to concerns about those two new manufacturing plants.

Tesla’s China Sales: On a more positive note, Tesla’s May China sales ticked up to 21,936 from April’s 11,671 — an end-of-quarter trend that Tesla has seen before, Navellier said.

Expectations for Tesla’s June China sales are high, especially since Tesla’s Model Y is now being manufactured in China and most Chinese Teslas are made with iron phosphate batteries, allowing for cheaper vehicles with lower ranges than their lithium cobalt battery counterparts, he said. 

Nio Vs. Tesla In China: Ultimately, Navellier said he sees Chinese EV maker Nio dominating the EV market in China and Hong Kong. Similar to Tesla, Nio's vehicle offerings incorporate the latest technologies in connectivity, autonomous driving and AI, he said. 

To achieve this, Navellier said Nio partners with cutting-edge chip companies like NVIDIA Corp. NVDA to provide autonomous driving capabilities.

Nio recently announced that the Nvidia DRIVE Orin-powered supercomputer will be launched in its ET7 sedan in China in 2022. Additionally, Nio offers two SUVs, the ES8 and ES6.

Nio was bailed out by the Chinese government last year through a $1-billion injection, giving China a 24% ownership in the company, Navellier said.

The Chinese government backing will make Wall Street firms more inclined to help Nio by issuing new debt or equity, in his view. 

About Louis Navellier: Navellier is the chairman and co-founder of Reno, Nevada-based Navellier & Associates which manages $2.5 billion in assets. He also writes four growth investment-focused newsletters and often provides market outlook and analysis on Bloomberg, Fox News and CNBC.

Photo: the Nio ES6.