Mizuho Bullish On Tesla, Nio Stock: What EV Investors Need To Know

Electric vehicles are expected to grow from 3%-4% of global light vehicle production arena to 25% by 2025, according to Mizuho Securities.

The EV Analyst: Vijay Rakesh initiated coverage of Tesla Inc TSLA with a Buy rating and $775 price target.

In a separate note, the analyst started coverage of Nio Inc NIO with a Buy rating and $60 price target.

The EV Thesis: Tesla is the only original equipment manufacturer with “its own in-house battery supply and also an industry-leading 4680 battery cell technology with 5x battery capacity and a ~49% cost reduction versus any battery available today,” Rakesh said in the initiation note.

“With batteries ~30% of the cost of the EV, lower cost with scale is key to sustainable leadership and lowering the average MSRP toward $25k, driving EV affordability and disrupting the 100M-unit LVP market,” he said.

Referring to Nio, Rakesh noted that the company is a leader in the “premium automotive EV segment” and is in China, which is “the largest and most prolific EV market globally.”

See also: How to Buy Electric Vehicle (EV) Stocks

Nio’s key differentiation from competitors is its “premium EV offering with a lower cost of ownership through its novel Battery-as-a-Service ("BaaS") battery swap module,” he added.

“With a small 0.1% share of overall global light vehicle production, we believe NIO has significant upside as it expands in China, into Europe in 2H21E, and potentially into other markets,” the analyst wrote.

NIO, TSLA Price Action: Tesla shares were up 2.98% at $687.99 at last check, while Nio shares were gaining 5.64% to $43.65.