NIO Stock Forecast 2021 – NIO Stock Price Prediction 2021, 2022, 2025 & 2030

Fact Checked by Gary McFarlane

NIO stock has been on a downtrend since the beginning of the year right after the stock price of the Chinese electric vehicle maker reached an intraday peak of $67/stock. Since then, the stock has dived nearly 47% while it remains under water for the year, currently delivering a 21.5% loss to investors since 2021 started.

NIO ytd performance vs tesla and indexes
NIO (NIO) YTD Performance vs. Tesla (TSLA) and Top US Indexes

The hostile attitude the Chinese government has adopted against domestic corporations in multiple sectors has ended up affecting the price of NIO stock, as investors from across the world fear that the regulators could eventually turn their crosshair toward the electric vehicle manufacturer.

However, despite these seemingly temporary headwinds, NIO has continued to deliver outstanding results as reflected by its latest quarterly report in which the company managed to surpass Wall Street’s estimates by posting a narrower-than-expected loss per stock along with above-expected revenues for the period.

Could this latest weakness in the stock price of one of Tesla’s toughest competitors be opening a window of opportunity for investors to buy some stocks at an attractive price or is NIO poised to underperform amid the Chinese government’s ongoing pressure on corporations?

In the following NIO stock price forecast, I’ll take a closer look at the factors that are influencing the price of the stock while also assessing the company’s fundamentals to draft plausible scenarios for NIO (NIO) as we move forward into the second semester of 2021.

67% of all retail investor accounts lose money when trading CFDs with this provider.

Key Drivers – NIO Stock Price Forecast 2021 and 2022

The electric vehicle market is relatively young and companies within it still have to overcome multiple hurdles to reach a higher degree of maturity. For NIO, there are multiple variables that could affect the performance of the business in the following two to three years and here is a summary of the most important ones.

  • Subsidies from the Chinese government: customers who buy NIO’s vehicles are entitled to receive a subsidy from the Chinese government. This subsidy has been progressively reduced in the past few years and further reductions could affect the affordability of NIO’s products for Chinese clients.
  • Changes in tariffs in the United States and China: the 2008-2009 trade war between the United States and China highlighted the risks that companies like NIO could face if the two countries decide to adopt policies that affect the imports and exports made between them. In this regard, a reduction in tariffs in China for imported foreign electric vehicles or an increase in the tariffs imposed by the US government on imported electric vehicles from China could dramatically affect NIO’s sales.
  • Auto sales in China have been declining: in 2020, NIO highlighted that China’s total car sales dropped by 6.8% and this could affect the demand for the company’s vehicles moving forward despite the positive momentum that the premium segment of the market has experienced lately.
  • Rising raw material costs: the cost of many of the materials and components required to manufacture NIO’s vehicles has been going up including that of aluminum, steel, lithium, and nickel. If the price of these critical supplies remains elevated, the profitability of NIO will likely suffer.
  • Political and regulatory risks: the latest hostile measures taken by the Chinese government toward companies within the education and technology sector could be a sign of the times as they may be signaling a shift in the government’s attitude toward big corporations in the nation. In this regard, NIO is exposed and could be dramatically affected by changes in the country’s regulations that may affect its ability to raise capital from foreign investors or expand its operations to other countries.

These are only some of the risk factors that investors should take into account when investing in NIO. Further information about other key drivers that may affect the company’s financial results and performance can be found on its annual reports in the ‘Risk Factors’ section.

67% of all retail investor accounts lose money when trading CFDs with this provider.

NIO Stock Price History – What’s Going On in 2021

NIO share price forecast 1
NIO (NIO) price chart – 1-day candles with multiple indicators – Source: TradingView

The price of NIO stock has been steadily going down in 2021 as reflected by the downtrend shown in the chart above. This downtrend has been formed as a result of the stock price progressively posting a series of consecutive lower highs and lower lows.

At some point in the year, NIO stocks came close to losing 36% of their value on a year-to-date basis but they have bounced slightly to trim that figure to the current 21.5% YTD loss.

As the chart shows, the stock price has bounced two times already off the $31.5 horizontal support area highlighted in the chart while the price action is currently posting a series of lower lows that could be signaling weakness in the market’s sentiment toward the stock.

This weakness is a bit counterintuitive upon considering the upbeat tone of the company’s latest quarterly report and it highlights the extent of the negative momentum that Chinese stocks as a whole are experiencing, which is sweeping all equity instruments issued by corporations within the country regardless of whether they have been affected by the government’s latest measures or not.

67% of all retail investor accounts lose money when trading CFDs with this provider.

NIO Stock Price Forecast – Short Term Outlook

NIO share price forecast 2
NIO (NIO) price chart – 1-day candles with multiple indicators – Source: TradingView

In 16 August, the price of NIO stocks went down nearly 6% and left behind a bearish price gap that is currently acting as resistance for the stock. Meanwhile, the stock remains on a downtrend as indicated by the daily chart above and within this overall downtrend there is another smaller downtrend that may lead to a tag of the $31.5 level soon.

Momentum oscillators are reinforcing this bearish outlook for NIO stock as the Relative Strength Index (RSI) has posted multiple lower lows and has sent no signals of a potential bottom while the MACD is neck-deep into negative territory.

Moving forward, a break of the $31.5 level could signal an acceleration in this minor downtrend that could lead to a tag of the lower trend line of the macro downtrend. All in all, the total downside risk for NIO stock stands at around 18% in the short-term and could possibly expand to 54% if the price breaks the $31.5 support.

NIO analysts ratings
NIO (NIO) Analysts Ratings – Source: Seeking Alpha

At the moment, 17 out of the 22 analysts currently covering NIO are bullish on the stock while the remaining 5 are rating the stock a hold. The consensus 12-month price target for the stock is currently standing at $61.5 with the highest estimate sitting at $80 and the lowest at $30 per stock according to data compiled by Seeking Alpha.

The most recent analyst action came from Citigroup, with the investment bank unit reiterating its Hold rating for the stock. It seems that despite the latest headwinds that have affected the stock price, Wall Street remains confident that the stock may surge in the future once the political and regulatory pressure ceases

67% of all retail investor accounts lose money when trading CFDs with this provider.

NIO Stock Price Forecast – Long-Term Outlook

NIO’s revenues have been growing steadily in the past three years moving from $720 million back in 2017 to $2.5 billion in 2020 at an 86% compounded annual growth rate (CAGR) while the firm’s sales for the last twelve months are currently standing at $4.27 billion – a figure that is three times higher than the firm’s LTM revenues from a year ago.

NIO vehicle deliveries
NIO (NIO) Delivered Vehicles 2018 – 2021 – Source: Inside EVs

Meanwhile, the firm’s gross margins have been progressively improving and just jumped to positive territory at 11.5% in 2020 while they have experienced an increase in the last twelve months as they currently stand at 17.6% according to data from Koyfin.

Moreover, the company has managed to trim its EBITDA from a negative figure of $1.33 billion back in 2018 to minus $294 million in the past twelve months – a signal that the company may soon swing to positive EBITDA on the back of higher delivery volumes.

Differently from Tesla, NIO does not receive any income from the sale of carbon credits and this has put the company headed by Elon Musk at an advantageous position as it has swung to profits on the back of that extraordinary income.

At its current market capitalization of $62.7 billion, NIO is trading at 14.7 times its sales for the last 12 months and at 8.8 times its forecasted sales for the next 12 months. Comparatively, Tesla (TSLA), its most important competitor, is currently trading at 11.9 times its sales for the next twelve months.

This gap between the valuation multiple assigned to the two electric vehicle makers is quite interesting as it reflects the extent of the negative momentum that Chinese stock as a whole are experiencing.

It is important to note that NIO’s sales are growing twice as fast as those of Tesla and analysts’ are expecting that they may continue to climb at a rate of around 80% per year in the next two to three years while Tesla is exhibiting an average annual revenue growth rate of 45%.

In this regard, NIO should be granted at least twice the multiple assigned to Tesla. However, if we were to be conservative and say that NIO should be trading at a similar multiple of its NTM sales than Tesla, the valuation of the Chinese electric vehicle maker should start somewhere around $86 to $90 billion or 43% above its current market cap.

Based on this analysis, it becomes clear why Wall Street analysts remain bullish on NIO stock as the company appears to be heavily undervalued based on a closer look at one of its most relevant peers.

Moreover, if concerns about the Chinese’s government hostile attitude toward the country’s corporations turn out to be unfounded or exaggerated, chances are that NIO’s valuation multiples will experience a significant jump that would result in sizable gains for long-term investors.

How to Buy NIO Stock?

Now that we have outlined the short-term and long-term outlook for NIO stock, are you ready to invest in this promising electric vehicle manufacturer?

In case you are, you can buy NIO stocks through one of our preferred stock brokers: eToro.

NIO page etoro

eToro is a global broker that offers the possibility of buying stocks from multiple exchanges across the world including the United States.

This provider offers zero-commission trading on US-listed stocks and ETFs, which means that you can buy and sell NIO stocks without paying a dime in trading fees.

Once you have signed up with eToro, you can easily buy NIO stocks by using the search box located at the top of the trading interface using the ticker symbol “NIO”. Once you get to the stock’s individual page, you can click on the “Trade” button to complete your purchase.

67% of all retail investor accounts lose money when trading CFDs with this provider.

NIO Stock Price Forecast – Final Word

NIO has progressively become a strong rival of Tesla in China and could emerge as one of its toughest competitors across the world if the company continues to expand its operations at the current pace in the future.

Meanwhile, the firm recently announced that it will be developing more affordable electric vehicles for its customers and that could help the firm in further growing its sales in the future while the continuous support of government’s around the world for a greener automotive market should results in higher sales volumes for the firm as well.

With NIO stock currently trading almost 39% below its 52-week high, this could be an opportunity to buy some stocks of this potentially undervalued electric vehicle manufacturer if you believe these latest headwinds should not materially affect the firm’s growth prospects or future financial performance.

Buy NIO Stocks at eToro from just $50 now!

1
$50Exclusive promotion
Our score10
  • Buy over 800 stocks with 0% commission
  • Social trading network
  • Copy over 12 million traders and investors
0% Commissionstart TradingOur score 10

 

What is NIO?

How much is NIO worth?

Is NIO a good investment?

How can I buy NIO stocks?

About Alejandro Arrieche PRO INVESTOR

Alejandro is a freelance financial analyst with 7 years of experience in the industry. He writes technical content about economics, finance, investments, and real estate and have also assisted financial businesses in building their digital marketing strategy. His favorite topics are value investing, macro analysis, and technical analysis. Other publications Alejandro has written for include The Modest Wallet, and Capital.com.