Why Nio Is Flying

For the last year, whenever Nio (NYSE:NIO) shares fell, buyers would step in and bid the stock higher. The stock reached a new 52-week high, helped by the continued rise in Tesla (NASDAQ:TSLA).

News that Apple (NASDAQ:AAPL) and Hyundai are in talks to build an electric vehicle also lifted Nio stock. The easing of political headwinds is also a positive development. When the Democrats won the Georgia runoff, markets anticipated higher spending for clean energy initiatives. This will bode well for China-based EV stocks including Nio, XPeng, and Li Auto.

Before the U.S. election, the State Department and Department of Defense officials reportedly considered expanding the list of China-based stocks to ban. Even if the U.S. government continued on a protectionist path, Nio shares are unlikely to get de-listed. The company would still attract investors if it traded on the pink sheets. Still, the chances of this happening are remote.

Strong Deliveries

On Jan. 3, Nio posted incredibly strong monthly and quarterly deliveries. It delivered 7,007 units in 12/2020, up 121% Y/Y. For Q4, it delivered 17,353 vehicles, up 111%. And for 2020, deliveries grew by 112.6% Y/Y. When it reports quarterly results, markets will probably look past operating losses. Instead, it will examine the growth in deliveries and the expected sales ahead.