Nio Accelerates as China EV Market Gains and Government Stimulates Economy
Electric Vehicles Are Here To Spend and A Sucker4617319
However, electric vehicles (EVs) appear to be the future in that sector, albeit evolving at a slower pace than expected. One of the more intriguing opportunities is among Chinese players that seeks to gather low-cost funding underpinned by generous government subsidies for vehicles and technology that are cutting edge as well as met with positive responses from consumers.
In a first, electric cars were over half the new passenger vehicle market in China last month (July) Nio (NYSE:NIO) is a premium Chinese EV maker that sits apart in the fast-growing market. Nio investors were recently hit by a piece of good news that might also accelerate the company’s growth story.
Meanwhile, What is Being Offered in the Name of International Economic Support by China?
The economy of China has been trying to recover from the pandemic, also a slump in property and investment activity amidst climate issues, while consumer spending shrank. China’s central bank has acted to ease worries over a weakening economy.
People’s Bank of China cuts rates, lowers bank reserve requirements, launches $70 bil stimulus package. In other words, money for the stock market and corporate cash to increase share buy-backs.
Hargreaves Lansdown analyst Matt Britzman said: “This isn’t the central bank going all-in on stimulus, but it’s a clear signal that it is not going to wait idly by if growth fails to live up to expectations.
What It Means for Nio, and EV Investors
Good news for Nio investors. The reduction in interest rate is good for Nio as it would make its premium electric vehicles more affordable to potential consumers, who will take out auto loans to finance their purchases. Though this gives a short-term boost, long-term Nio sees through expansion to two additional and cheaper brands.
Nio’s New Brands: The Wide World Of Nio
I reckon this should also be what’s planned for Nio’s second brand, Onvo, with the looming arrival of its new L60 SUV. Deliveries of this $21,210 subcompact are due to start in the next few days. Nio is challenging a larger segment of the EV market by giving them something more affordable.
But that’s not all — Nio also currently has a third brand in development under the code-name “Firefly”. The new brand is being established to offer pint-sized, more compact EV SUV versions to bolster Nio’s presence in the market. Having multiple brands ranging from low to high price, Nio plans on capturing a significant amount of market share in the growing EV sector.
Closing: A Tailwind For Nio, But The Real Growth Is Yet To Come.
Nio:: Nio shifts into higher gear on China economic stimulus, rate cuts Seeking Alpha Still, the real headline at Ford remains the company’s longer-term efforts to steal additional share with its new crop of brand-fee models. With Nio planning to launch a series of new models to expand its product portfolio, the company is better positioned as an investment now than in 2020.
So, stay with us as these come along and breathe new life into Nio to convert shop in global EV market in style.