NIO, also known as Weilai in Chinese, is a motor company that produces electric cars as a part of their brighter future mission. It was during the passage of 2020 that it started being viewed as a revolutionary company much like Tesla. Many investors who were looking for a rising enterprise recognized NIO’s potential and bought its stocks. They all assumed it to be the next big thing and that it did seem to be.
NIO Stock – Are Electric or Hydrogen the cars of the future?
A research was conducted by Benzinga in which they asked stockholders why they invested their money in NIO, Tesla, and other leading companies.
A good percentage replied to this by saying that they did so as they believed there is massive scope for Chinese EVs in the US.
And if introduced there as they might be, the share prices were likely to skyrocket. The bottom line is that most of NIO’s stocks were purchased in the hopes of its expansion in the western part of the world.
Despite all the expectations that were associated with NIO, it led its journey of highs and lows that made its stockholders around the globe hold their breath.
Is NIO in Hot Water?
The business of NIO has been facing a lot of obstacles since early 2020. And many believe that these recurrent issues have originated after the American depository stock episode. NIO had traded in values even lower than $2.50, and this is what has given rise to instability in their stock prices.
Even today that is early March 2021, reports have noticed a drop in the value of their shares. It is estimated that NIO was forced to cope with an approximate 8% decrease. Leading stock market analysts have linked this constant fall with the shortage of microchips in recent times.
This scarcity has further facilitated the struggles of NIO as they were still working on fixing problems of the past and were not prepared for new ones. Experts said that this sparse supply of microchips would affect NIO and all its competitors in the Chinese EV market.
This deprivation of microchips has impacted the positive aspects of NIO that were established in the market, which has caused the stock prices to take a more significant hit. These circumstances had forced NIO to have a close call with bankruptcy which they were lucky enough to get out of and harness their attention to the matters that needed it.
The Chances of Revival
Many of the shareholders are still rest assured by the company that they will pull through.
The NIO team claims to have enough chips to continue production demand for even the second quarter of this year.
The funders are still optimistic that they can win this battle as they believe NIO has a bright future.
They have all the reasons to think so as the progress and numbers that the company has shown in year comparisons are truly impressive.
Although luck is not currently NIO’s best friend, it is an ally as the company reported a 352% increase in deliveries this January.
They have always come across as hustlers, which has given their shareholders the confidence not to lose hope.