With governments around the globe implementing strict emission regulations and consumers growing increasingly environmentally conscious, the demand for electric vehicles (EVs) is soaring. Among the trailblazers is NIO, a Chinese automaker whose innovative approach and commitment to advancing the EV market have captured the attention of investors worldwide.
So if you too want to be part of this electrifying revolution, read on as we analyze the most important facts about the EV manufacturer, explain how to buy NIO stock, and provide an overview of the most reliable brokers to use.
Intermediate Traders and Investors
What is Nio?
Nio stock IPO
Nio became a publicly-traded company through an initial public offering (IPO) when the stock was listed on the New York Stock Exchange (NYSE) on September 12, 2018, selling 160 million shares at an initial share price of $6.2, raising approximately $1 billion and valuing the company at $6.41 billion.
Notably, Nio’s market value lost 246 billion yuan between November 2021 and November 2022, as seen in the chart below. This decline can be attributed to the buying frenzy of meme and growth stocks in early 2021, which ultimately subsided as increasing interest rates steered investors towards more secure investment alternatives, such as value stocks.
Nio Singapore Stock Exchange (SGX) listing
Besides being listed on the NYSE, the Chinese electric car maker Nio also trades on the Hong Kong Stock Exchange (SEHK) under the stock symbol 9866 and on the Singapore Exchange (SGX) under the stock ticker NIO.
In March 2022, Nio joined other US-traded Chinese companies to be listed on the Hong Kong Stock Exchange (SEHK) amid US-China political tensions. Nio stock Hong Kong IPO took place in March 2022, when it was listed without raising new funds, closing at around $20 on its first day trading its New York-listed US depositary shares.
A few months later, on Friday, the 20th of May 2022, Nio Singapore Stock Exchange IPO was announced, with stock opening at $16.90 and rising as high as $20.28 – the secondary shares on SGX are fungible with the shares listed on the NYSE. You can acquire Nio stock via multiple brokers, which we will overview later in this guide.
How to buy Nio stock? Step-by-step
As a publicly-traded company, you can buy NIO stock through a regular retail broker. The following section will provide a detailed summary of the steps involved in purchasing shares of Nio.
Step 1: Choose a broker
To buy Nio stock online, you’ll need a brokerage account. Your ideal platform should align with your investment style (long-term buy-and-hold strategy or active day trading) and needs (e.g., whether you want to trade more advanced financial products like options). Here are some key features to consider when evaluating brokers:
- Fees: Brokerage fees are a type of fee collected by brokers to execute your transactions or provide specialized services. Fortunately, today, the vast majority of online brokers offer commission-free stock and exchange-traded funds (ETF) trading;
- Security: Choose a trustworthy broker by ensuring it is fully licensed by state regulatory authorities as well as FINRA and registered with the Securities and Exchange Commission (SEC);
- Trading tools: Active traders may prefer brokerage accounts with all the bells and whistles. Some brokers offer fully customizable platforms with comprehensive analysis tools or access to additional data for an extra cost. If such additions are unnecessary for your purposes, avoid paying extra for them. It’s typically a good idea to look for a user-friendly platform with a competitive fee structure if you are new to stock trading. A dedicated section with investing tips and tricks is a bonus;
- Access to market data: Look for a platform that offers solid market research and reporting tools to help you trade confidently with updated data;
- Fractional stock trading: Fractional shares enable investors to buy stocks or ETFs by the dollar amount, which is particularly valuable for investors with limited capital and the desire to build a diversified portfolio or investors looking to set up a dollar-cost averaging (DCA) strategy.
Where can I buy Nio stock?
Thanks to the abundance of online brokers, access to the stock market has never been more convenient and affordable. However, choosing the right broker tailored to your specific needs, including investing goals, educational resources, and trading style, is crucial for a seamless trading experience.
To securely invest in Nio and buy NIO stock, consider these brokers:
- Commission-free stock trading;
- 2,000+ stocks from 17 exchanges;
- Fractional shares available;
- User-friendly platform.
Intermediate Traders and Investors
- Commission-free stock trading;
- Global stock-trading on 90+ market centers;
- Fractional shares available;
- Extra income on fully paid shares;
- Lowest financing rates for margin accounts in the industry;
- No account minimum.
Low cost investing
Step 2: Fund your account
Once you have decided on a broker, it’s time to fund your account. Remember, it can sometimes take up to three days for the money to reach your account.
Step 3: Research the company
Before investing in Nio or any other stock, thorough research that involves analyzing the company’s strategy and performance is essential.
A key source of information is the company’s filings with the SEC, particularly its quarterly (form 10-Q) and annual (form 10-K) earning reports, which can be found in Nio’s investor relations section. These documents will provide crucial insights into Nio’s financial performance, future plans, and challenges the company or industry may face, such as battery and semiconductor shortages or regulatory obstacles.
For further insights and updates on company performance, consider looking into analyst reports from sources like Morningstar, which cover Nio and other companies in the sector.
Step 4: Decide how much you want to invest
For investors aiming to ride the wave of the surging EV market, at about $10, Nio stock is a steal, particularly juxtaposed against Tesla (NASDAQ: TSLA), trading at around $170 per share in April 2023.
Even so, allocating all your resources to a single stock or sector is not recommended. As such, significant attention should be devoted to ensuring your portfolio is well-rounded and diversified.
Furthermore, remember that investing is inherently uncertain, and a favorable outcome is never guaranteed. That’s why it’s crucial to only invest what you can afford to lose and carefully consider how much risk you’re willing to take on. Keep those things in mind, and you’ll set yourself up for success!
Step 5: Place your order and buy Nio stock
Once you settle on the number of shares or the dollar amount you’d like to invest, you can place your order. If you’re working with an advisor, tell them you’d like to buy Nio stock, and they’ll take care of it. Alternatively, if you have a brokerage account, simply log in and enter the ticker NIO in the search bar.
There are a few different execution options to choose from, including:
- Market order: A market order is an order to buy the stock at the current market price that is generally executed immediately (subject to availability);
- Limit order: A limit order is processed once the stock reaches your specified price. For example, imagine you want to buy NIO stock at $9 or lower. You would then set the limit price at $9, and the order will only execute when the stock reaches the set price or lower;
- Options contract: Options speculation allows for leveraged positions in a security at a fraction of the cost of the underlying asset. A call option allows the trader to profit if the price of the stock increases, and a put option enables them to profit if the stock price declines. Remember, derivative instruments can only be traded on a margin account, which typically has higher minimum balance requirements than standard brokerage accounts.
Consider investing in Nio with index funds
Step 6: Monitor your investment
While a passive strategy may suffice for a diversified portfolio of ETFs, when investing in individual stocks like Nio, it’s crucial to actively track the company’s performance and review its allocation in your portfolio.
You can stay informed by keeping a close eye on press releases, company health indicators such as debt and revenue, industry performance (by comparing it to industry benchmarks like the S&P US & China Electric Vehicle Index), consumer trends, and overall market conditions.
Track the performance of key EV market players
Nio stock price
Nio’s IPO took place on September 12, 2018, priced at $6.2 a share, raising $1 billion and valuing the company at $6.41 billion.
Nio stock price reached an all-time high of $61.95 per share on January 22, 2021, and as of April 2023, the stock price was around $9.52 per share, about 35% higher than its IPO price but approximately 85% lower than its all-time high. Ultimately, as mentioned earlier, as a relatively new company with a relatively recent IPO, Nio stock is subject to considerable fluctuations in price.
Should I buy Nio stock?
In addition to examining Nio’s fundamentals, technical analysis can also be employed to evaluate the company and detect trading opportunities by analyzing price trends and patterns seen on charts.
This gauge displays a real-time technical analysis overview for your specified timeframe. It can be a valuable technical analysis tool for many traders by simplifying trading decisions by demonstrating the real-time recommendations of popular technical indicators such as moving averages and oscillators.
Disclaimer: TradingView does not recommend trading financial instruments based exclusively on the advice of the Technical Rating indicator. These recommendations cannot predict future movements and are meant as assistance for spotting potentially favorable buy/sell conditions if this is consistent with their strategy.
Common mistakes to avoid when investing in stocks
Making mistakes is par for the course when it comes to investing in stocks, but there are ways to recognize and avoid them. For an in-depth guide on investing mistakes, we have compiled a list of 17 common mistakes and tips for preventing them. But, for now, here are some of the most typical ones to watch out for:
- Not conducting your due diligence on the stock;
- Lacking clear financial goals;
- Attempting to time the market;
- Not diversifying;
- Allowing emotions to govern your investment decision-making process.
How to sell Nio stock?
You can sell Nio stock if you see the company performing differently than expected or after reaching your desired financial goal.
If you’re working with an advisor, they can create a sale order for you. However, if you have your own broker account, simply log on, navigate to the stock’s detail page, input the number of shares or dollar amount you want to offload, and tap sell.
Keep in mind that selling for a profit will result in capital gains taxes. The applicable tax rate will depend on how long you hold the shares, so it’s advisable to consult a tax professional before altering your investment portfolio.
Pros and cons of buying Nio stock
Before you buy Nio stock, take into account both the pros and cons of Nio’s business:
- A growing EV market: As the global focus shifts towards sustainable alternatives, the auto industry is set to undergo a substantial transformation towards electrification. For instance, according to Fortune Business Insights, the global EV market is expected to expand from $287.4 billion in 2021 to $1.3 trillion by 2028 at a compound annual growth rate (CAGR) of 24.3%;
- Tesla is losing momentum: In the fourth quarter of 2022, Tesla’s market capitalization declined by $436.32 billion, exceeding the combined value of the top ten EV competitors, presenting an opportunity for emerging players such as Nio to potentially take center stage;
- Undervalued: The stock price may be undervalued at this point, providing a potential opportunity for investors to buy in at a lower price;
- Subscription revenue from battery-swapping: Nio aims to build 1,000 battery-swapping stations in China, as well as 100 across Europe, bringing the total figure to over 2,000. As Nio’s battery-swapping network achieves critical mass, the investment will begin to yield returns, enabling NIO to potentially charge higher fees;
- On top of deliveries: NIO reported an all-time high in monthly deliveries in November 2022, with 14,178 vehicles delivered, representing a 30.3% year-over-year growth, driving its share price to jump by several percentage points;
- China is the world’s largest automotive market: As a Chinese company, Nio is benefiting from China being the world’s largest automotive market, with the country also boasting one of the highest rates of EV adoption worldwide.
- Macroeconomic headwinds: To capture a larger market share, similar to its counterparts in the EV industry, Nio has begun to lower its prices despite facing higher production expenses due to rising commodity prices and labor costs;
- The stock price has plummeted since its peak in 2021: Nio is among the many EV stocks that the sell-off in growth stocks has significantly impacted. In fact, Nio’s stock price now (April 2023) trades at over 85% below its all-time highs;
- No dividends: Nio does not pay dividends to its stockholders;
- Fierce competition: The EV market is highly competitive, with many established players and new entrants;
- Cut-throat competition: The electric vehicle market remains highly competitive, resulting in an increasingly crowded marketplace.
Nio has emerged as an influential player in the expanding EV industry, boasting a solid foothold in the Chinese market and aspiring to extend its reach globally. With its innovative battery-swap technology, emphasis on premium vehicles, and growing sales figures, the company has demonstrated its potential for long-term growth.
However, as with any investment, there are inherent risks involved in buying Nio stock – the competitive landscape of the EV market, potential regulatory challenges, and global economic uncertainties may all impact the company’s performance. As a result, investors must conduct thorough research and seek professional advice, if necessary, to ensure they make a well-informed decision that aligns with their financial objectives.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about Nio
What is Nio stock?
Nio is an electric car manufacturer, one of the leading EV companies in the premium electric vehicle market, and a competitor to Tesla, Rivian, and Lucid Motors. Nio stock was listed on the New York Stock Exchange on September 12, 2018.
How to buy Nio stock?
Nio is a publicly traded company, and its stock is available on the New York Stock Exchange under the stock symbol NIO, which means you can buy shares of Nio through your brokerage account.
Where to buy Nio stock?
You can buy Nio stock from various online brokers such as eToro and Interactive Brokers (IBKR).
Is Nio a good stock to buy?
Whether Nio is a good stock to buy should be based on your risk tolerance, portfolio size, financial goals, and market experience. So always conduct your due diligence before trading. Also, note that past performance doesn’t guarantee future returns.
What will Nio stock be worth in 10 years?
The value of Nio stock in 10 years will hinge on various factors, such as overall market conditions, company performance, technological advancements, consumer sentiment, and the competitive environment within the EV industry.
How much is Nio stock?
The current (as of April 12, 2023) Nio stock price is hovering around $9, a 35% increase from the stock’s IPO price of $6.2.