The average analyst price target for NIO is $49.01, with a 14% upside from Friday's closing price, while the average for Tesla is $403.24, a third below the current price.
The upcoming inclusion of Tesla in the S&P 500 index and the surprising sales results of the three Chinese new energy star stocks – NIO, XPeng, and Li Auto, have drawn attention to the new energy vehicle sector in the US market.
After days of gains for the industry leader Tesla, some Wall Street investors are turning their attention to its Chinese counterpart, NIO.
In a recent report, Goldman Sachs predicted that electric vehicles will account for 18% of new light-vehicle sales worldwide by 2030, accelerating to 29% by 2035.
Goldman's rationale for this bold prediction is that EV penetration is accelerating due to faster-than-expected declines in battery prices, which is improving the economics of buying an EV.
In addition, a number of economies have recently proposed complete restrictions or bans on the sale of new fuel-efficient vehicles within the next 10-20 years, which will be an important factor in driving EV sales.
The stock analysis platform TIPRanks has done some comparisons of the current EV leaders in the world's top two economies, the US and China - Tesla and NIO.
According to the article, while NIO is still not profitable, analysts rate NIO as a "moderate-buy" and Tesla as a "hold".
The average analyst target for NIO is $49.01, with a 14% upside from Friday's closing price, while the average for Tesla is $403.24, a third below the current price.
NIO: More room for imagination
NIO has risen 10.6 times this year, but analysts remain bullish on the stock for three reasons: strong new-vehicle delivery figures in the third quarter, optimism about the Chinese new-energy vehicle market, and the launch of two new models next year, as well as its entry into the European market.
NIO recently announced that it delivered 5,291 vehicles in November, up 109.3% from the same month last year and exceeding 5,000 units after October, the fourth consecutive monthly high for the brand.
The company has doubled year-over-year deliveries for the eighth consecutive month since April this year, and has delivered a total of 36,721 units in the first 11 months of the year, up 111% year-over-year.
Along with strong sales, NIO is aggressively expanding its production capacity to meet the growing demand.
Last month, NIO founder and CEO William Li Bin said, "Given the growing market demand for our competitive products, we are motivated to continue to increase our production capacity to even higher levels.
Wall Street analysts expect the NIO to deliver 16,500-17,000 vehicles in the fourth quarter.
Goldman Sachs has upgraded its rating on NIO to 'hold' from 'sell' and raised its price target to $59 from $7.70. The company's price target has been raised to $59.
An important factor in the shift is NIO's new battery rental service, which was launched in August, making NIO vehicles more competitively priced without the battery price, while providing customers with more flexible options.
In addition, with China's current charging infrastructure still incomplete, a faster battery exchange process will give users a better experience, according to Gao Sheng.
On Wednesday, UBS analyst Paul Gong also raised his price target on NIO from $16.30 to $55, while maintaining a "hold" rating.
Of the analysts who currently rate NIO, seven rate it a buy, and four rate it a hold.
Tesla: Up nearly 50% in three weeks
Of course, Tesla is not without merit. The continued growth in deliveries, the pace of production expansion over the next year, and the recent announcement by the Nasdaq that Tesla will be added to the S&P 500 in December have all contributed to Tesla's continued upward momentum.
Since the after-hours announcement of its inclusion on November 16, Tesla has gained 47% to close Friday at $599.04, up 0.95%.
Tesla's technology, innovation, leadership in electric vehicles, and increasing profitability make it an attractive sector for the long term.
However, Wall Street is largely on the sidelines on the stock due to Tesla's sky-high valuation.
However, Goldman Sachs on Wednesday changed its rating on Tesla from Neutral to Outperform and raised its price target from $455 to $780, the highest price target on Wall Street.
The shift to all-electric vehicles is accelerating and will be faster than we previously expected, Goldman Sachs analyst Mark Delaney wrote in a report.
Tesla also sells batteries to homeowners, commercial customers, and utility companies, as well as a "solar roof" business for homeowners. Goldman Sachs is bullish on the business's prospects, saying it could be more valuable than previously thought.