Chinese EV Manufacturer Nio Races To All-Time High

Shares of Chinese electric vehicle startup Nio Inc – ADR NIO have been on a roll, with investors showing optimism over alternative energy vehicles as well as battery manufacturers.

The company has also benefited from intrinsic factors such as cost cutting, product focus and customer service.

Nio Scales New Highs: Nio, which went public in September 2018 by offering 160 million ADSs at $6.22 each, saw its shares settle at $6.60 in its debut session.

The stock hit an intra-day high of $13.80 on Sept. 14, 2018. Subsequently, it pulled back and was moving in a lackluster manner before the most recent uptrend, which began when the stock broke above the $5 level in early June 2020.

The upward momentum has been accelerating since Thursday, when the company reported strong monthly deliveries for June.

After jumping about 19% to $9.38 Thursday, the stock gained an incremental 22.7% Monday to $11.51. On Tuesday, the stock climbed about 15% before settling at $13.22.

Nio shares gap-opened Wednesday's session higher at $14.10 and were trading 10.74% higher at $14.64 at the time of publication. 

The stock has run up about 240% year-to-date, not counting Wednesday's advance.

The Sustainability Of Nio's Gains: The steep slope of the upward rally gives rise to some degree of caution among investors.

Larger rival and EV pioneer Tesla Inc TSLA is also on a record run. And so are other stocks with EV exposure, such as Blink Charging Co BLNK and Plug Power Inc PLUG.

Benziga's Take: Is the market is witnessing an EV bubble?

While valuations might seem lofty when weighed against the growth potential, these companies still appear to offer an attractive risk-reward opportunity — and Nio in particular has made spectacular progress.

The company has returned from the brink with planning, execution and support from government measures.

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Photo courtesy of Nio.