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If you are a NIO stock holder and a patient investor than you are in for a massive ride of your life time to 500 dollars plus…. Not saying it would be a straight line upward journey but we will reach there….
Wonder how? Than listen carefully, NIO founder William Li predicted that the smart electric cars would grab 90% of market share in Chinese market by 2030. This prediction intrigued me to do some math to find out the real value of NIO stock. I further wanted to cross check these claims before starting my calculations…. To avoid biasness in my claims let me quote others view. BYD’s founder Wang Chuanfu spoke in a conference in mid-June 2021 that the new energy vehicles, which include electric cars, will account for 70% of China’s new car sales by 2030. Now listen carefully, despite the pandemic last year 25.31 million vehicles were sold in China. Now lets assume very conservative growth number of just 2 percent annually through 2030 than total sales would be around 31 million vehicles per year in China…..
Even if we assume the middle ground of the prediction that is 80% of the total vehicles sold in 2030 would be electric than EV sales estimates comes at 24.8 million vehicles per year in 2030. Now as per JP Morgan Chase NIO would be able to grab 7% of the market share b 2025 and if we assume conservative multiple of no further growth and just 7% stagnant market share in 2030 than its annual sales would be 1.736 million vehicles resulting in approximately 70 billion dollar in annual revenue from just China sales….
Now To put things in perspective last year tesla full year 2020 revenue was 31 billion dollar and this year projection is around 44 to 49 billion dollars. Tesla for a very brief moment reached 900 billion market cap this year and now trading near 650 billion market cap….
NIO’s closest peer is Tesla and with 70 billion in revenue NIO would be valued around 800 to 1 trillion in market cap that translates to 500 to 600…. I am not saying NIO would cross tesla by any means, by the time NIO would reach this market cap Tesla would be miles ahead of NIO. But in term of percentages NIO offers better returns…. NIO would be valued at higher multiples due o tesla…
Keep in mind all of these calculations are based on just China numbers for NIO…. overseas sales, robotaxi sales etc will be an upside trigger for NIO.
DISCLAIMER: Note that I am not a financial adviser and you should do your own due diligence before making any decision. I just share my views. I do not recommend basing any investment decisions on my videos. My videos are only made for educational and entertainment purposes.