Tesla (NASDAQ:TSLA) is the poster-child of the EV revolution. Nio (NYSE:NIO), on the other hand, has always been the little brother stuck living in Tesla’s shadow. But now, the little brother is taking the reigns and driving leading the EV charge, and Nio stock is beginning to reflect this shift in dynamics.
Tesla Stalls While Nio Speeds Up
Over the past month Nio stock is up 33%. TSLA stock over that same period is down 3%. This huge of a delta in performance has never happened before, where Nio is sustainably and significantly outperforming Tesla.
Something’s happening under the surface.
Specifically, the fundamentals underlying Nio are dramatically improving, while they are simply flatlining over at Tesla.
With Nio, the company has basically said the chip shortage crisis is in the rearview mirror with its implied guide for June deliveries.
Long story short, Nio reported May delivery numbers, and they weren’t good. There were continued month over month declines.
But they maintained their overall Q2 delivery target, which implies a huge upswing in June deliveries by 15%.
In other words, Nio is saying they are in the process of going from struggling to grow, to growing very quickly again.
This is very good news.
A New License Deal
In other news, Nio recently won a very important license in Europe.
This license enables Nio to start selling its cars in Europe very soon.
The first deliveries are expected to happen as soon as September in Norway. Nio is already embracing its audience in Norway, and from there, the floodgates will soon open to the rest of Europe.
A big part of the bull thesis for Nio is that this isn’t just a Chinese EV company — it’s a global EV company.
The Bottom Line on Nio Stock
Early success in the next six to 12 months will validate that thesis and push Nio’s stock significantly higher.
Overall, the sentiment underlying Nio is dramatically improving.
And meanwhile, the sentiment underlying Tesla is flatlining.
That’s why you’re seeing the delta in performance.
This delta will persist. Buy Nio stock for big gains over the next six to 12 months.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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